Ford Motor Co. said on Thursday it will eliminate jobs in Europe by restructuring its operations to focus more on profitable commercial trucks and SUVs, while shifting production to electric cars in the long term.
At the same time, Jaguar Land Rover have announced the elimination of 4,500 jobs worldwide, Ford said its decision seeks to increase profitability in the short term and at the same time prepare the company for the changes that lie ahead.
The company based in Dearborn, Michigan, did not disclose how many jobs it will eliminate, and said reductions will be achieved as much as possible through voluntary retirement negotiations with unions and employee representatives. Ford’s European operation, based in Cologne, Germany, employs some 53,000 people.
The company said it plans to abandon its unprofitable models, in addition to carrying out previously announced plans to close an automatic transmission factory in Bordeaux, consolidate administrative headquarters in Britain and cease production of its C-Max van in Saarlouis, Germany. The company did not say what those models were, but the vice president in charge of operations in Europe, the Middle East and Africa, Steven Armstrong, said profitable sectors were SUVs and commercial vehicles.
“In the last two decades, Ford Europe has not been sustainably profitable,” Armstrong said. “We can only allocate capital to the areas where we get a return on that capital.”
Global automakers must adapt to the major changes planned towards autonomous and electric vehicles and collective transport through cell phone apps. In addition, consumer preferences move away from sedan and hatchback towards SUVs.
“The improvement in structural costs will be supported by a reduction of jobs considered surplus in all functions,” the group said in a statement, also announcing that it will begin to consult with unions.
“Ford aims to reduce labor costs as much as possible, through voluntary departures in Europe, for which it will work in close collaboration with the social partners and other parties concerned to achieve it,” they said.
The second American automotive company, which for years suffered a loss of its market share and insufficient profitability in Europe, says it wants to “return to profitability in the short term.”
Ford emphasizes that it will revise its product portfolio, considered by experts as little adapted to the trends of the European market. The market share of the blue oval brand has been reduced in the last 20 years from almost 11% of sales in 2000 to 6.4% last year.
The company explains that “they want to improve or eliminate the less profitable models and will launch a plan of specific actions in the countries in which they register low performance”.