Published: Sun, January 13, 2019
Markets | By Otis Pena

Ford to scrap 1150 jobs in Britain as vehicle industry stalls

Ford to scrap 1150 jobs in Britain as vehicle industry stalls

The company on Thursday said it planned a major revamp in Europe, including job cuts to boost profitability, but did not specify numbers.

But back in April the manufacturer announced plans to cut 1,000 manufacturing contractor jobs amid falling demand amid anti-diesel sentiment and the pressures of Brexit.

New all-electric vehicles will be offered for all Ford models, while there will be a more "targeted" line-up of models in the future. Speaking to reporters after the announcement, Mr Armstrong said the firm "needed to address the parts of the business that are unprofitable".

Ralf Speth, chief executive of Jaguar Land Rover, said: "We are taking decisive action to help deliver long-term growth, in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry".

Plans by auto giant Ford for a shake-up of its European operations could lead to the loss of 1,000 jobs at its site in Bridgend, unions have told ITV News.

Armstrong said the company is in negotiations with worker representatives about potential job cuts at its Saarlouis plant in Germany, where 6,190 staff assemble cars, as the carmaker considers discontinuing production of its Ford C-Max model. China is its most profitable market but sales have halved in recent months as Chinese buyers hold back on big-ticket purchases amid the global trade tensions. He cautioned that whatever action the company takes might have to be significantly more dramatic should a no-deal Brexit occur at the end of March.

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Ford is now going to talk to unions about measures to reduce costs.

"We believe Ford Europe could require as much as a 20 to 30% reduction of capacity and headcount", Morgan Stanley analyst Adam Jonas said in a note on Thursday.

Ford Europe reported a 245 million euro (S$381.3 million) loss before interest and taxes in the third quarter, equivalent to a negative 3.3 per cent Ebit margin. The companies have only confirmed a commercial vehicle venture together to date.

Additional cost cutting could include the shuttering of underused U.S. factories, according to Morgan Stanley analyst Adam Jonas, despite President Donald Trump's public pressure on auto makers to maintain their U.S. workforces. In America, the company is already dropping several sedans.

For the final business group which covers imported vehicles, Ford said this would cover a "niche portfolio of imported iconic nameplates for Europe" and would include Mustang, Edge, and another SUV to be revealed in April, along with an all-new Mustang-inspired full-electric performance utility in 2020.

"We are continuing to invest in the business, especially in electrified cars", said Armstrong.

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