By on January 10, 2019

Ford Escape Titanium badge logo, Image: Ford Motor Company

On Thursday, Ford announced preliminary details of a plan that will ultimately erase thousands of European jobs in an attempt to return the business to profitability. The decision comes after several reports indicated the automaker’s restructuring program will be particularly hard on the region.

The plan now officially includes a slimmer product lineup, which is likely to result in the shuttering of several facilities. The manufacturer also announced a “leveraging” of existing relationships — specifically referencing a potential alliance with Volkswagen Group that would help support Ford in that market.

“We are taking decisive action to transform the Ford business in Europe,” explained Steven Armstrong, group vice president and president of Europe, Middle East and Africa. “We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”

What does Ford think it needs to do to achieve a 6 percent operating margin in Europe? Read on. 

Layoffs will be inevitable. However, before those job cuts come, the company says it needs to conduct a comprehensive analysis of the existing business. Ford wants to focus on more profitable vehicles and appears poised to axe passenger vans like the Galaxy and S-Max, concentrating instead on crossover and SUV production.

Formal discussions have already begun between Ford and its European Works Council to end production of the C-Max and Grand C-Max at the Saarlouis Body and Assembly Plant in Germany. But the manufacturer also plans to launch a “strategic review” of Ford Sollers, its joint venture in Russia. Several significant restructuring options for Ford Sollers are being considered by Ford and its partner, Sollers PJSC.

Fortunately, the automaker said its commercial vehicles business has remained “solidly profitable” in Europe, so there’s no immediate danger to the Ford Transit or Transit Connect. But don’t expect either to replace the swath of MPVs that are probably destined for the grave.

Ford also promised widespread electrification across the brand for its European customers. This includes all new nameplates and new versions of existing vehicles. The automaker wants to deliver either a mild-hybrid, full-hybrid, plug-in hybrid or full battery electric option on every model sold in Europe.

The automaker will eventually establish three separate groups in Europe — Commercial Vehicles, Passenger Vehicles, and Imports. Each segment will be refined to maximize profitability. As previously stated, the commercial side of things will focus on growth and strategic partnerships while the passenger segment will probably shrink and eventually mimic Ford’s North American no-car strategy.

And for imports? Ford wants to create “a niche portfolio of imported iconic nameplates for Europe that builds on the heritage of the Ford brand will include Mustang, Edge, and another SUV to be revealed in April, along with an all-new Mustang-inspired full-electric performance utility in 2020.”

As for who will lose their jobs and when, we only have a tiny bit of concrete information at present. The Ford Aquitaine Industries plant in Bordeaux, France, which manufactures small automatic transmissions, is already scheduled to end production in August of 2019. Nothing else is confirmed, but we imagine anyone working at a Ford plant specializing in passenger vans or small diesel engines probably isn’t feeling great about the future.

“We are looking to make a step-change in the performance of the business,” Armstrong told Automotive News in a bit of candidness we can appreciate. “There will be significant impact across the region. We will be looking at all options,” which could include plant closures, he said.

“A review of the manufacturing footprint is part of this process,” Armstrong explained.

Ford also plans to consolidate its UK and headquarters and Ford Credit Europe’s headquarters at the Ford Dunton Technical Center in South East Essex to “improve business fitness” and create a customer-centric technical hub. The automaker said any final decisions will be “subject to union consultation and local approvals.”

[Images: Ford Motor Co.]

Get the latest TTAC e-Newsletter!

Recommended

14 Comments on “Here Come Ford’s Layoffs: Automaker Outlines Its Euro Restructuring Plan...”


  • avatar
    TrailerTrash

    if only government was as quick to change

  • avatar
    sportyaccordy

    No autonomy?

    Thoughts are with all the folks losing their jobs. Sucks. Impulse is to blame Ford, but profit matters, and the whole industry is due for a contraction.

    • 0 avatar
      ect

      The whole industry may be due for a contraction, but in Europe Ford has led the way. In 2010, their market share in Europe was around 8%. By 2017, it was down to 6.5%, and the decline was pretty steady, so management can’t say it was due to some unforeseeable event.

      When market share drops by that much, staff reductions are inevitable. Your impulse to blame Ford is probably justified.

  • avatar
    ToddAtlasF1

    As much contempt as I have for VAG, and as laughable as their engineering is to any mechanic; you have to admire that they sell products that keep factories humming world-wide.

  • avatar
    Robbie

    It seems this is an admission that Ford is not only incapable of producing profitable passenger cars in the US, but also incapable of competing in Europe. There apparently isn’t even the hope of being able to use some of its giant F-150 profits towards engineering a decent passenger vehicle.

    Does anyone have good insights as to whether in the long run Ford can survive as a low-tech, F-150/large SUV/commercial vehicles maker?

  • avatar
    conundrum

    Other reports today on this announcement talk about Ford Europe saying it lost money on every car, but made money on all its Transit vans. Net loss. C- Max and derivative production and minivan production to stop immediately. Only 50,000 Mondeo/Fusion sales per year from the Spanish plant, so that’s a goner. In the UK Fiesta is number one seller and Focus not far behind. There’s your two surviving cars.

    It was also suggested VW wanted to make money on vans, at which Ford is Europe market leader. Perhaps why VW is greedily eying a tie-up with Ford. Certainly not because of the car side of things.

  • avatar
    thejohnnycanuck

    Sounds like a great plan. Until VW steps in and tells them what’s really going to happen.

  • avatar
    Art Vandelay

    What I’d like to see I’d VW get access to Ford’s commercial stuff and Ford transition to the MQB platform for cars but keep their own engines. A GTI, but a little more rowdy with the Ford turbos and the chassis tuned by the ST/RS folks? That would be great and who knows, maybe we’d get one in the US.

    I think you get enough differentiation to make it worthwhile. I’m not all that optimistic though that this is how it will go down.

  • avatar
    kkop

    What’s missing from the ‘Imports’ category is the F-150. Although they will always be a niche, US pickup trucks are (relatively speaking of course) surprisingly popular in Europe. Most popular one seems to be the Ram 1500 right now. All imported through third parties. If the Mustang is worth importing, so would be the truck.

    • 0 avatar
      Ce he sin

      Hardly worth bothering with. Ford already have the Ranger which doesn’t sell in big numbers and a slightly bigger pickup isn’t going to do anything for them. Also, the Ranger is made in high cost America which would make it more expensive than the Thai-built Ranger.
      Ford already import the Edge from Canada. It sells in its tens.

  • avatar
    EBFlex

    Boy this news makes buying a run down garbage train station seem oh so logical.

  • avatar
    WallMeerkat

    There was already a question mark over the Mondeo as soon as the US badged version – Fusion – was axed. The Mondeo used to be Ford Europe’s bread and butter, back when a white collar job got you the keys to a bewildering amount of trim options on your Mondeo/Vectra. Work hard and next year your L might turn into an LX with the optional air conditioning!

    This world is gone, companies can lease BMWs and Mercedes for less than Fords (costs calculated on resale value, of which the German cars keep theirs high – despite a move away from sedans the C class is an occasional visitor to the monthly UK top ten sellers), and taxes on company cars make it less of an attractive benefit when you have to tell the taxman every year.

    Despite being a useful family car, the Focus has grown to be as big as the Mondeo used to be, and the current model is as large as the old Granada / Scorpio, not easy to park in UK cramped spaces. Everyone wants an SUV with the footspace of a Focus and the height of a Transit that looks like it could cross Africa.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • ToolGuy: Serious comment: These guys are becoming masters of doing more with less. People love this stuff. Jackass...
  • ObviouslyCarGuru: Boy, a whole bunch of you poor babies heads are gonna explode when country hating politicians are...
  • stuki: Subpar infrastructure has always been a problem in third world countries.
  • SCE to AUX: “Anyone with a Tesla who cheers when the Blue Angels do a fly-by at a sports game should have to...
  • Hydromatic: Iraq proved the U.S. can knock around small armies with almost laughable ease, but chokes when faced with...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States