Ford will lay off thousands of its workforce in Europe in an attempt to bring profitability to its business. This new restructuring by the American automaker might also include the shutting down of major production facilities across the continent.
Ford has struggled with a dated model lineup and shrinking demand in the UK, which is the company’s biggest market in Europe. The UK operations of the company are not clear of the storm yet, with further disruption inbound due to Brexit.
In an official statement released on Thursday, Ford said it will seek to exit the multivan segment, renew its operations in Russia, merge the head offices of Ford UK and Ford Credit to a site in Dunton, Essex.
The workforce at Ford's European facilities face an uncertain future with the automaker hit by a wave of unprofitability.
Steven Armstrong, Ford’s head of Europe, said: “We are looking to make a step-change in the performance of the business. There will be significant impact across the region. We will be looking at all options.” Ford also said it will cut thousands of jobs, exit unprofitable markets, and cease production of loss-making vehicles. These decisions are in a bid to turn the company’s ailing business around and achieve at least a six-percent operating margin in Europe.
The Blue Oval had announced in December that it was working on a restructuring plan for Europe called Sprint 6 Reset and Redesign. The name refers to Ford’s six-percent profit margin target in Europe. The firm did not release a timeframe for the target. The plan involves concentrating on profit-making SUVs and commercial vehicles while eliminating unprofitable model lines.
Ford's UK operations appear to be hit the worst following the nation-wide Brexit ordeal.
The company said on Thursday that it has plans to leverage relationships, “including a potential alliance with Volkswagen, to support commercial vehicle growth.” Ford currently employs 53,000 people in Europe and posted a loss of $282.5 million (AED 1.03 billion) in the third quarter.
Armstrong declined to divulge the exact number of job lay-offs pending negotiations with labour leaders, but did say staff reduction would run into the thousands. “Ford aims to achieve the labour cost reductions as far as possible through voluntary employee separations in Europe,” the company said.