Ford to cut 12,000 jobs in Europe, shut down five plants on weak car demand

Ford Motor Company said  that it would cut about a fifth of its European work force and shut down five plants as the company deals with weak demand for its cars. The automaker, which has struggled to turn a profit in Europe, said about 12,000 of its 65,000 workers across Europe would lose their jobs, with most being offered voluntary separation programs.

The job reductions were announced along with plans to build more electrical vehicles in the region, as part of "a new business model" to streamline the company's European operations. Ford started to shrink its European presence in 2013, but said at the start of 2019 that it would cut thousands of jobs. Like many global automakers, it has been buffeted by changes in the industry that have made it increasingly difficult to justify maintaining production facilities in the region.

Ford is closing three plants in Russia, one in France and another in Britain. It will also sell a plant in Slovakia, leaving it with 18 facilities in the area by 2020. It will also consolidate two headquarters in Britain and move them to one location.

Employees at its assembly plants in Saarlouis, Germany, and Valencia, Spain, will also have shifts reduced.

“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,” Stuart Rowley, president of Ford of Europe, said in a news release.

The job reductions were announced along with plans to introduce new vehicles, including ones with the option of running on electricity.

"Ford will be a more targeted business in Europe, consistent with the company's global redesign, generating higher returns through our focus on customer needs and a lean structure," Rowley said.

In recent months, companies including Nissan, Honda and Jaguar Land Rover have all announced plans to withdraw from parts of Europe, where tighter regulations over fossil fuels, sluggish sales and Brexit have made markets harder for carmakers.
In Britain, car production has fallen for 12 consecutive months, an industry group said this week, with output falling 15.5 percent over that period. The Society of Motor Manufacturers and Traders blamed Brexit for the continued slump.

"The ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping," Mike Hawes, the chief executive of the organisation, said in a statement.

At the same time, traditional auto companies are facing more competition from technology companies and have turned their focus to China, the world's largest maker and seller of electric cars.

Since announcing in January that it would be cutting employees and facilities, Ford has teamed up with Volkswagen in an alliance intended to spur the development of electric and self-driving cars, as well as to cut costs.

The company said on Thursday that all its new models would have options for electrification and that it would be building electric vehicles in Europe.

"Our future is rooted in electrification," Mr. Rowley said.