Ford To Axe Jobs, Slow-Selling Models In Europe To Boost Profits

Following up its strong comeback in Europe, the Blue Oval is cutting back on employees and certain models to become even more profitable.

The target is to save around $200 million a year in administrative costs by launching a “voluntary separation program” that’s aiming to reduce the 10,330 employees working in administrative roles.

Their number has not been disclosed, but Ford of Europe vice president Jim Farley told AutoNews he expects the staff taking up the offer to be in the hundreds.

“In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a $259 million profit in 2015. This is a good first step”, he commented. “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.”

The manufacturer has already closed three factories in Western Europe since 2013 while they reached an “innovative cost-saving agreement” with labor unions in Germany.

“We are creating a far more lean and efficient business that can deliver healthy returns and earn future investment”, said Farley. “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 plan also includes the elimination of less-profitable models over time without specifying which models will bite the dust. Reports are suggesting that the new Ka city car is among the first to go, despite the fact that the car has already been spied being tested in a prototype form.

Building a more efficient business includes a shift of focus to crossovers, with two new compact models scheduled for launch in the next three years. The upmarket Vignale badge will expand from just one model (the Mondeo) to at least five by 2017, while the overhaul will also introduce 13 new PHEVs, hybrids and full electric models by 2020.