FRANKFURT (Reuters) – Ford (F.N) said it will have cut 12,000 jobs in Europe by the end of next year to try to return the business to profit, part of a wave of cost reductions in an auto industry facing stagnant demand and record-level investments to build low emission cars.
The challenge of investing in electric, hybrid and autonomous vehicles while having to overhaul combustion engines to meet new clean-air rules, has forced Europe’s carmakers to slash fixed costs and streamline their model portfolios.
Ford said it has ceased production at three plants in Russia, is closing plants in France and Wales, and has cut shifts at factories in Valencia, Spain and Saarlouis, Germany.
“We have largely concluded consultations with social partners regarding restructuring actions,” Stuart Rowley, president, Ford of Europe told Reuters.
Approximately 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 salaried positions, which are included among the 7,000 salaried positions Ford is reducing globally, the carmaker said. The rest are workers on hourly contracts or agency workers.
Ford Europe has 51,000 employees in Europe or 65,000 when joint ventures are included.
In January Ford announced a sweeping business review which included the prospect of plant closures and discontinuing loss-making vehicle lines to pursue a 6 percent operating margin in Europe.
Demand for cars in Europe is falling, European automobile manufacturers’ association ACEA said on Thursday, predicting that European passenger car registrations will shrink by 1% in 2019 to 15 million cars, revising its previous forecast of 1% growth.