Ford will reduce the size of its workforce and axe some less-profitable models in its range as the company strives to increase its profitability in Europe.
As part of a major Ford of Europe overhaul announced today, the company said it would introduce a "voluntary separation" programme which would allow workers to leave the company at their own behest. The move is expected to save $200 million (about £138m) annually, and is designed to give Ford “industry beating levels of efficiency.” The Blue Oval also announced that it would be “eliminating less profitable models” from its product range. Autocar understands that models whose future is in jeopardy include the third-generation Ka, which has already been spotted testing in prototype form and had been due to be officially unveiled later this year. In the future, Ford said in its statement, it will put a greater emphasis on SUVs and crossovers, a strategy that was first announced last September. The Ford Ecosport, Edge and Kuga models will be joined by two new crossovers, which Autocar understands will be based on the Fiesta and Focus. Ford said it wants to improve its European profits in 2016 and grow its operating margin. The company said its European strategy calls for a “more streamlined and profitable product line; more emotional and experimental brand communications; and a leaner cost structure to lower break-even and help offset growing regulatory costs.” Announcing the plan today, Ford’s European boss Jim Farley said: “In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a $259 million (about £178m) profit in 2015. This is a good first step.” “We are absolutely committed to accelerating our transformation, taking the necessary actions to create a vibrant business that’s solidly profitable in both good times and down cycles. Our job is to make our vehicles as efficiently as possible, spending every dollar in a way that serves customers’ needs and desires, and creating a truly sustainable, customer-focused business.” The company says it will launch seven new or refreshed vehicles in 2016 - including the new Focus RS performance hatchback already driven by Autocar. The Blue Oval will also expand its hybrid and electric offering in Europe, with a new version of the Focus Electric already known to be in development. In total, Ford will add 13 new electric vehicles to its range by 2020, as well as providing electrified versions of 40% of its model range. Another area of growth will be in Ford’s all-wheel drive offering. The firm currently offers eight models with all-wheel drive, and expects to sell around 140,000 AWD vehicles in Europe this year. |