In an attempt to save its European business, Ford has announced a massive overhauling effort that will result in the loss of more than 12,000 jobs. The European operations overhaul efforts will last until 2020. The American automaker aims to save costs in its foreign business, which has been hemorrhaging money for the past few years.
As part of the overhaul, Ford is planning to close at least five manufacturing plants by the end of the year. This will include some of its biggest facilities such as its Bridgend engine plant located in Wales. Meanwhile, Ford also plans to sell some of its plants.
The company did not disclose which plant it would be selling and to whom it would be selling its plants. Ford currently has around 51,000 people employed in Europe throughout its various facilities. The company is aiming to cut most of its costs through voluntary redundancies.
Major vehicle manufacturers around the world have recently been struggling to cope up with the added costs of transitioning to electric vehicles. Ford is one of those companies that have promised to offer electric products in the coming years. It also doesn't help that demand in major markets such as Europe and China have fallen.
According to the president of Ford of Europe, Stuart Rowley, it was a hard decision for the company to let go of its employees and to close its plants. The company apparently recognizes that it will have a negative effect on the families and communities that have depended on Ford for so long.
However, Rowley stated that they will be providing support for those who will be affected by the overhaul to ease the impact. The Ford executive also explained that the move is a necessary one for the company to build a more sustainable and long-term business in Europe.
Part of the reason for the massive business overhaul in Europe is for Ford to free up some cash, which it plans to invest in the development and production of new electric and hybrid vehicles.
This will be an essential move for the company as it tries to comply with the ever-increasing EU emissions targets. Unlike General Motors, which had already given up its European business, Ford is still adamant in maintaining its presence in the country.
However, it will likely have to be at a much smaller scale moving forward. Ford mentioned that its European business will be shifting its focus on three business groups, namely commercial vehicles, passenger vehicles, and imports.
