Ford to cut 12,000 jobs in Europe amid sweeping restructuring

Ian Thibodeau
The Detroit News

Ford Motor Co.'s European operations would see the most job cuts and plant closures of any of the automaker's business regions under CEO Jim Hackett's global restructuring plan.

The automaker announced in Germany on Thursday plans to cut 12,000 jobs in Europe by the end of 2020 following a sweeping restructuring of its business there aimed at driving profits. The automaker would also close or sell six European factories by the end of 2020 as it realigns its European operations to focus on three business groups separately focused on commercial vehicles, passenger vehicles and import vehicles, effective July 1.

The Ford engine plant near Bridgend, south Wales, Thursday June 6, 2019. The Ford engine plant in Bridgend that employs 1,700 people is "economically unsustainable" and will close next year, the carmaker announced, part of restructuring efforts.

The plan contrasts what Ford announced in late May for North America where, seven months after Ford said would cut white collar jobs globally, Ford said 800 people in North America would lose their job by August. The European restructuring would result in more job cuts, more plant closures and a deeper realignment of the business model to drive profits toward a targeted 6% margin in Europe, where Ford has struggled to make money in recent years. The automaker lost $398 million there in 2018.

"We've taken actions across the board to make our business leaner and more efficient," Stuart Rowley, president of Ford of Europe, said Thursday.

The details of Ford's moves in Europe come just more than a month after the automaker announced it would finish cutting 7,000 global salaried positions by August of this year. That included roughly 800 positions in the U.S. as CEO Jim Hackett carries out his plan to cut costs, trim management levels and steer the company toward more profitable business plans around the world. The job cuts announced Thursday amount to a roughly 20% salaried headcount reduction in Europe.

The automaker will close its Bridgend Engine Plant in South Wales, the Ford Aquitaine Industries Transmission Plant in France, and the Naberezhnye Chelny Assembly, St. Petersburg Assembly and Elabuga Engine Plant in Russia. It aims to sell the Kechnec Transmission Plant in Slovakia to automotive supplier Magna International Inc.

Ford also plans to cut shifts at its assembly plants in Saarlouis, Germany, and Valencia. Spain. The closures, sale and shift cuts would bring the 12,000 job cuts, the automaker said. Roughly 2,000 of those positions are salaried jobs, which are included in the 7,000 global salaried reductions Ford previously said it would eliminate by August. 

The remaining 10,000 employees affected by the plant closures would be handled "primarily through voluntary separation programs," Ford said in a statement.

"Separating employees and closing plants are the hardest decisions we make, and in recognition of the effect on families and communities, we are providing support to ease the impact," Rowley said.

Meantime, Rowley said the restructured European operations would drive profits through three avenues. The commercial vehicles group, to be led by Hans Schep and based in Dunton, U.K., would focus on the company's only European profit pillar in its line of commercial vans. That section of the business would be bolstered by Ford's partnership on commercial vehicles and pickups with Volkswagen AG.

Ford's new passenger vehicles group, managed by Roelant de Waard and based in Cologne, Germany, would focus on a new portfolio of cars and SUVs built in Europe as the automaker brings new nameplates to that market. Rowley would not specify which new nameplates would be introduced in Europe.

Ford will also have an imports group focused on a "niche" portfolio of vehicles built outside of Europe that would be sold there, such as the Mustang and Explorer.

Twitter: @Ian_Thibodeau