Ford Europe to slash thousands of jobs in turnaround plan

Ford Europe to slash thousands of jobs in turnaround plan

Ford is cutting thousands of jobs, ending production of some models and closing a plant in Europe ahead of a possible alliance with market leader Volkswagen.

The union also said it expected the impact of cuts on jobs in the United Kingdom to be limited.

"If Brexit went in the wrong direction we would have to have another look, to mitigate that", Armstrong said.

"We have been asking the company for two years to clarify the situation regarding jobs and it's not until today that we have had the devastating answer". The stock plunged 39 percent past year.

"We want to be a net contributor of capital and not a net detractor", Armstrong told journalists on a later call, referring to Europe's financial contribution to U.S. parent Ford Motor. The overall plan is to have a "more targeted, emotive portfolio of European-built passenger vehicles". It's the latest sign of big changes in a global auto industry.

Meanwhile Jaguar Land Rover says it will cut 4,500 jobs as the carmaker addresses slowing demand in China and growing uncertainty about the U.K.'s departure from the European Union.

Ford was among USA carmakers that fell short of expectations when the industry presented sales for past year, adding to concern that a slowdown may occur in 2019. JLR's sales in China declined by nearly 50% in recent months. The American automaker expects to reduce the number of vehicles in its line-up to focus on more profitable areas of the market.

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The Financial Services segment consists of Ford Credit, which offers automotive financing products to and through automotive dealers. Analysts have speculated Ford's generous dividend may be at risk.

Ford started consultations with unions, with details of any job cuts not expected until later in the year, although staff now based at Warley in the West Midlands will move to Dunton in Essex. Audi, VW's biggest profit center, likewise noted more struggles ahead, reporting a 3.5 percent drop in sales previous year. The review also includes "rescaling the footprint of the business" with Ford reviewing the efficiency of its plants, Armstrong said.

In Russia, Ford said it will launch a strategic review of its joint venture Ford Sollers, with several restructuring options on the table.

Ford lost $245 million in Europe in the third quarter as sales slumped in Turkey and Russian Federation.

The hope is to return Ford of Europe to a 6.0 per cent profit margin. This year, performance will already be "significantly better" than 2018, Armstrong said.

"We are taking decisive action to transform the Ford business in Europe", said Steven Armstrong, group vice president and president, Europe, Middle East and Africa.

"We will migrate out of the MPV segment", Armstrong said, referring to the family vans segment.

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