Ford Motor Co. will cut thousands of jobs, weed out slow-selling models and potentially close factories in Europe, as the carmaker's global cost-cutting drive targets a region that has dragged on earnings for years. Ford will focus instead on developing more profitable "crossover" vehicles.
The UK's biggest auto manufacturer Jaguar Land Rover (JLR) also announced on Thursday it would cut 4,500 jobs, or about 10% of its workforce, in a bid to save money. Armstrong believes Ford will soon have "a significantly stronger and more focused product line-up" capable of delivering sustainable profits.
JLR employs 44,000 workers in the United Kingdom at sites in Halewood on Merseyside and Solihull, Castle Bromwich and Wolverhampton in the West Midlands. The German Economy Ministry is in talks with the automaker over its planned job cuts in Europe, a spokeswoman said on Friday.
In December, VW Chief Executive Herbert Diess said, "We are in quite advanced negotiations and dialogue with Ford Corporation to really build up a global automotive alliance, which also would strengthen the American automotive industry".
"We are taking decisive action to transform the Ford business in Europe", Steven Armstrong, group vice president, Europe, Middle East and Africa, said in a statement.
"We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business", he said.
Ford of Europe will slash its workforce to improve its short-term profitability after losing US$199 million ($277 million) during the first three quarters of 2018.
New all-electric vehicles will be offered for all Ford models, while there will be a more "targeted" line up of models in the future. Including its joint venture operations, Ford of Europe employs roughly 68,000 throughout the Continent.
Jaguar Land Rover, Britain's largest carmaker, announced Thursday that it would slash 4,500 jobs as part of an effort to cut costs.
At the time, boss Ralf Speth said: "In the latest quarterly period, we continued to see more challenging market conditions".
"The Welsh Government will continue to work closely with Ford to protect the hundreds of highly skilled jobs & supply chain, as well as look for other high-technology opportunities for the site".
Diesel accounts for 90 percent of Jaguar Land Rover's British sales and 45 percent of global demand, the company said past year, as demand tumbles following new levies in the wake of the Volkswagen scandal. The company already cut 1,000 jobs previous year, but new plans to improve cash flow by £2.5 billion ($3.2 billion) include "substantial" cuts to employment that will run into the thousands, a source told Reuters, affecting managerial, research, sales and design staff, but not line workers. The stock plunged 39 percent previous year.
Since the news of the job cuts broke, JLR employees are known to be concerned about what the future holds.