Dearborn-based Ford Motor Co. is launching a new business model and fresh vehicle line-up for its operations in Europe with a goal of sustainable profitability and delivering a 6 percent earnings before interest and taxes margin. Part of the plan includes closing or selling six plants and parting ways with 12,000 workers.
Ford is calling this the most comprehensive redesign in the history of its business in Europe.
“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,” says Stuart Rowley, president of Ford of Europe. “Implementing our new strategy quickly enables us to invest and grow our leading commercial vehicle business and provide customers with more electrified vehicles, SUVs, exciting performance derivatives and iconic imported models.”
Ford plans to close its Bridgend Engine Plant in South Wales in the United Kingdom, its Ford Aquitaine Industries Transmission Plant in France, and three plants in Russia (Naberezhnye Chelny Assembly, St. Petersburg Assembly, and the Elabuga Engine Plant). It is selling its Kechnec Transmission Plant in Slovakia to Magna International.
As a result, Ford’s manufacturing footprint in Europe will be reduced to a proposed 18 facilities by the end of 2020, from 24 at the beginning of 2019. In the U.K., the Ford of Britain and Ford Credit Europe headquarters in Warley also will close later this year and operations consolidated in Dunton.
In addition, Ford is implementing shift reductions at its assembly plants in Saarlouis, Germany, and Valencia, Spain, as well as a more streamlined management structure and marketing and sales operations.
In total, approximately 12,000 jobs will be cut at Ford-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.
“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,” says Rowley. “We are grateful for the ongoing consultations with our works councils, trade union partners and elected representatives. Together, we are moving forward and focused on building a long-term sustainable future for our business in Europe.”
The changes, which will be effective July 1, include the creation of three new business groups – Commercial Vehicles (CVs), Passenger Vehicles (PVs) and Imports. Each has a dedicated management organization including executives responsible for marketing, manufacturing and product development.
The Commercial Vehicles group will be led by general manager Hans Schep and be based in Dunton, U.K. Roelant de Waard will lead the Passenger Vehicles group based in Cologne, Germany. Leadership for the Import Group was not announced but the company says it expects its imports into Europe to more than triple by 2024.
Also part of the restricting is freshening and expanding Ford’s vehicle line-up in Europe, introducing at least three new nameplates in the next five years as it continues to grow its utility vehicle portfolio, including the all-new Mustang-inspired fully electric performance utility. The new nameplates are in addition to all-new Kuga, Puma and Explorer Plug-In Hybrid coming by early 2020.
Every new Ford passenger vehicle nameplate in Europe will include an electrified option, delivering one of the most comprehensive line-ups of electrified options for European customers.
“Our future is rooted in electrification,” adds Rowley. “We are electrifying across our portfolio, providing all of our customers with more accessible vehicle options that are fun to drive, have improved fuel economy and are better for our environment.”