Arthur J. Villasanta – Fourth Estate Contributor
Cologne, Germany (4E) – Ford of Europe A.G. and Jaguar Land Rover Ltd (JLR) will slash thousands of jobs across Europe as they cope with dramatically weaker sales and an unmistakeable global economic slowdown.
JLR, which is based in Coventry, England, said it will cut 4,500 out of 42,500 jobs at its facilities in the United Kingdom. In the same vein, Cologne-based Ford of Europe confirmed it will slash “thousands” of jobs as part of an overhaul that might result in plant closures and kill-off weaker selling Ford models.
Ford will likely close some plants in Europe, as well. It employs 53,000 people.
The job cuts for both Ford and JLR were triggered by a fall in demand for diesel-engined cars. Another reason: European policymakers in December agreed stricter pollution limits, forcing carmakers to speed-up investments in developing all-electric cars.
Ford will exit the family vans or MPV segment. It will review its operations in Russia, and combine the headquarters of Ford U.K. and Ford Credit to a site in Dunton, Essex to achieve a six percent operating margin in Europe.
Analysts noted that profits of JLR and Ford’s have lagged behind those of competitors BMW, Volkswagen and Peugeot. The weaker operating results has seen investor pile on the pressure on managers to stanch mounting losses.
Ford of Europe reported a $282 million loss before interest and taxes in the third. For its part, JLR reported a 4.6 percent drop in full-year sales to just under 600,000 vehicles. It lost $450 million between April and September 2018.
“We are taking decisive action to transform the Ford business in Europe,” said Steven Armstrong, group vice president, Europe, Middle East and Africa.
Ford of has been bleeding money for years and pressure to restructure its operations has risen since arch-rival General Motors raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot.
On the other hand, JLR is being best by much weaker sales in China, its biggest overseas market. JLR said demand in China plunged 21.6 percent in 2018, the biggest drop in any of its markets.
“The economic slowdown in China along with ongoing trade tensions is continuing to influence consumer confidence,” said JLR Chief Commercial Officer Felix Brautigam.
Article – All Rights Reserved.
Provided by FeedSyndicate