With the aim of reducing operational costs in Europe, United States based car manufacturer Ford has announced on Friday that it would cut about 5000 jobs in Germany and more in the
In recent years, the performance of the company in Europe has not been according to the expectations of investors of the company and the company had announced its intention to enhance its performance and financial efficiency in the region. On Friday, the company also announced in a statement the offer of voluntary separation packages for its targeted employees for retrenchment in Germany and in the U.K. as a part of its plan to rejuvenate its performance in Europe. While the approximate number of layoffs has been cleared by the company, it is yet to come out with the exact number of job cuts that it plans in its UK operations.
The European actions by the company are part of its larger global strategy of restructuring of its operations which, according to the company, would costs it about $11 billion. The restructuring strategy of the company for Europe involves the reshaping of the European business into three different business groups – where in each would have a particular focus area. The three divisions would be commercial vehicles, passenger vehicles, and imports. The plans by Ford also include creating a more simplified product lines as well as focusing on the vehicles that generate the most profits.
In January, Ford had announced that it was planning to set up a partnership with the German car maker Volkswagen in a number of project areas which would include specific projects on trucks and commercial vans and the target market would be all across the world where in both the companies would also make use of each others’ distribution network.
One of the US rivals of Ford, General Motors, has also found it hard to be profitable in the European market of late and things reached such a situation that it was forced, in 2017, to sell off its European business entirely to the French automaker Groupe PSA and the French banking group BNP Paribas
Apart from job cuts, the restructuring plan of Ford also includes possibilities of closing down of plant and discontinuing the manufacturing of vehicles that are only money burners.
“Through these programs and other initiatives, Ford of Germany expects to reduce its headcount in excess of 5,000 jobs, including temporary staff,” the company said on Friday.
Ford would streamline its lineup by “improving or exiting less profitable vehicle lines”, the company also said.
A large part number of the cars for sale in Europe are manufactured by Ford in Germany where the wages are higher than the European average. Those cars are made at the Cologne and Saarlouis plants of the company in Germany. It is expected that the production of C-Max compact minivan in Saarlouis plant would be stopped by Ford because it wants to completely focus on SUVs and commercial vehicles that are profitable.
(Adapted from Europe.AutoNews.com)