Ford’s global job reduction persists as the automaker states it is cutting out 12,000 jobs in Europe to become much more effective and profitable.
The move is not unpredicted as Ford’s enterprise in Europe has been sliding for years, and it has forged a union with Europe’s number-one automaker Volkswagen that reduced employees need on the continent.
The reduction is part of a broader restructuring, which includes the closure of six plants in Europe. Ford is dropping its total number of plants in the region to 18 while reorganizing functions into three divisions: commercial vehicles, passenger cars and imports of Ford models such as the Mustang.
Ford states most of the positions will be cut by means of voluntary separation programs through the end of 2020. Some 2, 000 jobs will be salaried positions, part of 7,000 white collar jobs being cut universally.
Ford lost $398 million in 2018 in Europe. Ford states it is closing its Bridgend engine plant in Wales, a transmission plant in France, and three plants in Russia. It is promoting its Kechnec transmission plant in Slovakia to Magna.
Ford is attempting to pivot to a more competitive position in the coming age of electric as well as autonomous vehicles. However, like all automakers, it is having to do so at a time when those technologies require great capital outlay now with almost no return on investment.
Ford needs strong profits to fund such investments. To that end, it has been getting rid of vehicle lines, such as four-door sedans, in North America, which have been unprofitable for years. Ford Europe states all of its future vehicles will now come with an electric variant, such as a battery or battery-internal combustion hybrid. Also, it has an aggressive EV and Hybrid strategy in North America.
There is a universal shift to fewer jobs in autos. GM said in November it is reducing headcount by 14,000. Volkswagen stated in March it will eliminate up to 7, 000 jobs by 2023. That’s on top of a 2016 job reduction agreement that foresaw the loss of 23,000 jobs through 2020, and the inclusion of 9, 000 through new technology.