Ford stated it will cut 12,000 jobs in Europe by the end of next year to try to return the business to profit, part of a flow of price reductions in an auto industry facing dead demand and huge investments to build low emission cars.
The challenge of investing in electric, hybrid and autonomous vehicles while having to repair combustion engines to meet new clean-air rules, has forced Europe’s carmakers to cut fixed costs and streamline their model portfolios.
Ford Europe has been losing money for years and pressure to restructure its operations increased after arch-rival General Motors G.M raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot SA (PEUP.PA).
Ford said it would close three plants in Russia, a plant in France and Wales, and cut shifts at factories in Valencia, Spain, and Saarlouis, Germany.
Following the sale of the Kechnec Transmission plant in Slovakia, to Magna, Ford’s manufacturing footprint will be decreased to 18 facilities by end-2020, from 24 today.
“We have largely ended consultations with social partners regarding restructuring actions,” Stuart Rowley, president, Ford of Europe reported to Reuters.
About 12,000 jobs will be affected at Ford’s wholly owned facilities and consolidated joint ventures in Europe by the end of 2020, primarily through voluntary separation programs.
Around 2,000 of those are fixed salaried positions, which are included among the 7,000 salaried positions Ford is reducing globally, the carmaker said. The rest are workers on regular contracts or agency workers.