Ford’s Turnaround Plan To Result In Loss Of ‘Thousands’ Of Jobs In Europe

A major restructuring plan its operations in the UK and mainland Europe will be implemented soon by US carmaker Ford.

The new plan is anticipated to result in job losses for thousands throughout Europe with a limited impact on the UK.

But the company would also undertake a fresh evaluation of its UK operations in terms of restructuring if there is a no-deal Brexit, said the company’s Europe boss Steven Armstrong.

The measures to reduce costs would also be discussed with the labour unions by Ford.

The new cost saving plans includes the company focusing on more profitable models and exiting the less profitable markets to allow the company to invest more in the development of electric and hybrid technology in the near future.

The plan also includes the creation of a new division comprising of the commercial vehicle that it produces – which would be expanded, while the other two divisions would be made up of its passenger vehicles and imported vehicles.

With the completion of the plan, Ford anticipates that it would be able to achieve an operating margin of 6 per cent in Europe.

It was working closely with Ford to safeguard jobs in the UK and look after the interests of employees, said the UK’s biggest union Unite. It also anticipates that the impact of job lossess in the UK would be limited.

Ford “needed to address the parts of the business that are unprofitable”, said Armstrong while speaking to reporters after the announcement. He however made it clear that this measure by the company was not influenced by the UK choosing to leave the European Union on 29 March this year.

“This is not a consequence of the Brexit situation,” he said. “This is not a one or two-year issue.”

“If Brexit goes in the wrong direction and we have a hard Brexit, we would need to look again about what we could do to mitigate the impact of that [in the UK],” he added.

He also clarified that the possibility of closing down of factories would “not be off the table”.

According to the company, the business plan would entail a “reduction of surplus labour” throughout the board for its business functions.

While claiming that the job losses could be in “thousands”, Ford refused to pout any specific number to the losses because negotiation with the unions was still ongoing.

According to analysts, while Brexit is one of the reason for the poor performance of the company, Ford has been underperforming for a multitude of reasons over a number of years now.

In Europe, Ford has 54,000 employees of which about 13,000 are in the UK. In addition to production units in the UK, Ford also has operations in Germany, France, Turkey, Spain, Russia, Romania, and Belgium.

The company said that manufacturing automatic transmissions in Bordeaux, France, would be stopped in August and the operations in Russia would be closely reviewed.

(Adapted from BBC.com)

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