Ford to cut thousands of jobs to slash costs

Ford Motor Co. has announced plans for a major shake-up of its operations in the UK and mainland Europe.

It is expected to lead to thousands of job losses across the continent, although the immediate impact on its UK operations is expected to be limited.

The step comes in a bid to return the business to profitability in a broad restructuring that doesn’t rule out shutting down production plants.

Ford is talking to unions about measures to reduce costs, including focusing on more profitable models and exiting less profitable markets.

It will concentrate more in future on electric and hybrid technology.

The firm will also expand its commercial vehicle business.

The carmaker has struggled with an ageing model line up and a contracting market in the U.K., Ford’s biggest in Europe, which is in store for further disruption from Brexit.

The manufacturer, employing some 54,000 workers across the region mainly in Germany, the U.K. and Spain plan to cull less profitable models from its line up and review its joint venture in Russia. In America, the company is already dropping several sedans.

“We are looking to make a step-change in the performance of the business,” Steven Armstrong, Ford’s head of Europe, said Thursday in an interview. “There’ll be a significant impact across the region. We will be looking at all options,” which could include plant closures.

Ford hopes the changes will enable it to achieve a 6% operating margin in Europe.

Ford says there will be a "reduction of surplus labour" across all its business functions.

It has not released any figures, as discussions with unions are continuing.

Ford operates two engine factories in the UK, at Dagenham, east of London, and Bridgend in Wales, as well as a joint venture with the gearbox manufacturer Getrag on Merseyside.

Profits at Ford of Europe fell 82% last year, in part due to the fall in the value of the pound as a result of uncertainty over Brexit.

The news comes as peer Jaguar Land Rover (JLR) is set to announce it is cutting up to 5,000 jobs from its 40,000 strong UK workforce.