After racking up some $3.1 billion in losses from the years 2011 through 2014, Ford Europe turned its fortunes around with a small profit in 2015. Ford went on to earn a record $1.2 billion in pretax profit in Europe last year, and the automaker is expected to remain profitable in 2017, even as it anticipates a $600-million hit from the delayed currency impact of the UK’s “Brexit” vote to leave the European Union.
How did Ford manage such a turnaround? By implementing an ambitious restructuring plan and reinvigorating its European lineup.
While Ford was still under the leadership of former CEO Alan Mulally, the company shed its excess manufacturing capacity in Europe by shuttering three plants: Genk Body & Assembly in Genk, Belgium; Ford Southampton in Southampton, England; and Ford Dagenham on the outskirts of London, England. In all, the closures terminated nearly 6,000 jobs, although some number of those were merely shifted to lower-cost countries like Spain and Turkey.
Ford Europe has continued to pare down its workforce, offering “voluntary separation” packages to some 10,000 employees since early last year to help save an estimated $200 million annually. And, starting several years ago, Ford has been revamping its product lineup in Europe, cutting underperforming models at the same time that it invests in money-makers. Its lineup of crossovers and performance vehicles continues to grow along with that in the US, and the Transit’s 2013 redesign has helped propel Ford to the top of the charts in commercial vehicle sales.
No automaker is immune to the fluctuations in a given market, of course. But thanks to Ford’s comprehensive restructuring in Europe, the company is well-poised to weather most any storm.
(Source: Automotive News)