The US vehicle maker Ford plans to cut 12,000 jobs across Europe as it tries to turn around the struggling business in a European car market forecast to shrink this year for the first time in six years.
Ford’s chief executive, Jim Hackett, instigated the cuts to the carmaker’s global business, which lost more than $800m (£631m) outside north America last year.
The cuts – almost one in four of the car group’s European workforce – include the closure of Ford’s plant in Bridgend, south Wales, which was revealed this month. The engine plant will close in September 2020 with the loss of 1,700 jobs.
Six of Ford’s 24 European factories will close by the end of 2020 under the plans, including one in Bordeaux, France, and two in Russia. The company is also closing its British headquarters in Warley, Essex consolidating operations in Dunton, just over 50 miles away.
Announcing the restructuring Ford said its financial performance would “significantly improve for the full-year 2019” as it cuts costs. Ford’s European operations, which employed 51,000 people before the cuts, reported a loss before interest and tax of $398m in 2018.
Ford of Europe will be restructured into distinct commercial and passenger vehicle arms. Meanwhile, an import arm will aim to triple the number of imported vehicles it sells in Europe, such as the Mustang muscle car and the Ford Explorer sports utility vehicle (SUV).
Stuart Rowley, president of Ford’s European operations, said: “Ford will be a more targeted business in Europe, consistent with the company’s global redesign, generating higher returns through our focus on customer needs and a lean structure.”
Rowley added that the cost cutting would allow the company to invest in its commercial vehicle business, as well as target more electrified vehicles and SUVs.
Every new Ford passenger vehicle will include an electrified option and the company has committed to building battery electric vehicles in Europe. Ford is also planning to start importing a new electrified Mustang variant next year.
All big European carmakers are scrambling to electrify their fleets, with the prospect of fines running into billions of euros for those that do not meet strict emissions targets. The average car sold by Ford in Europe last year emitted 123.7g of carbon dioxide per kilometre driven, according to the data company Jato Dynamics. This is well above the 95g/km limit due to be imposed in 2021.
The need for expensive investments in new technology comes during an already difficult period for carmakers. Sales of diesel cars, previously a key part of carmakers’ plans to lower emissions, have slumped after a political backlash, following emissions cheating scandals.
On Thursday the European Automobile Manufacturers’ Association (ACEA) said it expected car sales in the EU to fall in 2019 for the first time since 2013. This is due to slowing economic growth, as well as uncertainty over Britain’s potentially chaotic exit from the EU and trade disputes with the US. Sales will fall by 1% this year, with about 15 million cars sold, ACEA said.
In the UK, car manufacturing has fallen for 12 months in a row, according to the Society of Motor Manufacturers and Traders. Output fell by 15.5% year on year in May, according to figures published on Thursday.
