Published: Sat, January 12, 2019
Economy | By

Ford, Jaguar announce sweeping job cuts across Europe

Ford, Jaguar announce sweeping job cuts across Europe

The headwinds buffeting the global auto industry made themselves felt in Europe on Thursday as mass-market carmaker Ford and luxury-focused Jaguar Land Rover announced sweeping restructurings that will cost thousands of jobs.

Ford said it will seek to exit the multivan segment and focus on developing more profitable "crossover" and sports utility vehicles, and will stop manufacturing automatic transmissions in Bordeaux in August.

If plans go ahead, the 990 jobs to be lost at Bridgend - nearly half of the site's workforce - will go in two phases by 2021, as part of 1,150 losses across the UK.

Ford did not specify the number of projected job cuts, but said it hoped to achieve them through voluntary redundancies.

The plan, part of a £14bn (Rs 125,929 crore) global cost-cutting programme, is described as "decisive action to transform the Ford business" by Ford president Steven Armstrong.

"We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business", he said.

Already highly profitable, Ford is Europe's No. 1 commercial vehicle brand in terms of sales volume, and more than one in four Ford vehicles sold today in Europe is a commercial vehicle. The 52-week range is $7.41 to $13.48, and the consensus price target is $9.97.

New all-electric vehicles will be offered for all Ford models, while there will be a more "targeted" line-up of models in the future.

In December, VW Chief Executive Herbert Diess said, "We are in quite advanced negotiations and dialogue with Ford Corporation to really build up a global automotive alliance, which also would strengthen the American automotive industry".

In recent quarters, JLR and Ford's profits have lagged behind those of peers BMW, Volkswagen, and Peugeot, ramping up investor pressure on managers to stem losses.

"They gave no indication of any particular threat to Bridgend or any other plant for that matter, but they did say they were rethinking the way Ford were operating in Europe", he added. Thanks to a broad range of vehicles, Ford enjoys a healthy market lead.

Carmakers are also facing a shift in consumer preference away from sedans and hatchbacks to sport-utility vehicles.

Ford said Thursday that from now on every model will have a battery version, whether a hybrid that combines internal combustion and battery power or a battery-only version.

Ford said it will seek to exit the family vans or MPV segment, review its operations in Russian Federation, and combine the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex to achieve a 6 percent operating margin in Europe.

The cost of the new strategy, the company said, will be around $11 billion and will take place over the next three to five years.

Ford (F) said it would end production of some unprofitable models and shift its strategy in hard regional markets including Russian Federation.

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