Ford Authority

Ford Europe Scaling Back Jobs, Cutting Low-Profit Vehicles

Ford Europe has plans to become a leaner competitor as it prepares to slash hundreds of jobs and kill off some of the automaker’s less-successful models there, reports The Wall Street Journal. Ford wouldn’t divulge which models were going to get the axe in the European market, but WSJ felt it worth mentioning that both the B-MAX and S-MAX MPVs posted sales declines in the double-digits last year.

To reduce its labor force, Ford Europe will offer voluntary buyout packages to workers, and the company expects hundreds to take the deal, leading to savings of some $200 million annually. Last year, Ford emerged with $259 million in pre-tax profits, reversing the company’s trend of sustained losses; according to WSJ, the automaker lost $3 billion in Europe between 2012 and 2014.

But Ford Europe isn’t taking its recent fortune for granted. The European Ford division has targeted an operating margin of 6 to 8 percent in the future, up from 1 percent last year, as it braces to weather any future storms. “The goal is very simple,” said Ford Europe CEO Jim Farley. “It is vibrant and sustainable profitability, that we make a return in good times and bad.”

While automobile sales in Europe have recovered some over the past several years, this was preceded by a six-year slump that sent demand back to around what it was in the early 1990s, according to The Wall Street Journal. It is hoped that by making deep cuts and drastic restructuring decisions now, Ford Europe can maintain profitability even after the spectre of waning demand has returned.

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

Subscribe to Ford Authority

For around-the-clock Ford news coverage

We'll send you one email per day with the latest Ford updates. It's totally free.

No Comments yet

Leave a comment