Ford Motor Company (NYSE: F) has announced that it will close or sell six of its manufacturing plants across Europe by the end of 2020. As part of a major cost-cutting plan, the company is reducing its manufacturing footprint to 18 plants from 24. Ford called the plan “the most comprehensive redesign in the history of its business in Europe.”
Ford said it has ceased production at three plants in Russia and is closing plants in France and Wales. Plans to close the Bridgend Engine Plant had already been announced. Its Ford of Britain and Ford Credit Europe headquarters in Warley will also be closed. Operations will be consolidated in Dunton. The company has also cut shifts at factories in Valencia, Spain and Saarlouis, Germany. A plant in Slovakia will be sold to Magna.
Up to 12,000 jobs could be lost as a result. About 2,000 of the 12,000 jobs are salaried positions within the company or its consolidated joint ventures. Those salaried positions are included among the 7,000 salaried positions Ford is reducing globally. The other 10,000 are workers on hourly contracts or agency workers. Ford currently employs around 51,000 employees in Europe, or 65,000 when joint ventures are included.
Europe’s carmakers have been facing stagnant demand and increased costs to build low emission cars. European automobile manufacturers’ association ACEA predicts that European passenger car registrations will shrink by 1 percent in 2019, falling to 15 million cars. This is a revision of its previous forecast of 1 percent growth.
The auto industry has been forced to slash fixed costs and streamline model portfolios. Stuart Rowley, president of Ford of Europe, said in a statement, “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.”