Ford will import a range of iconic new models, boost production of its strongest European-made cars and SUVs and improve or ditch its slowest-selling local lines as part of a comprehensive plan to improve its competitive position and profitability in Europe.
The plan, part of a £14bn global cost-cutting programme, is described as “decisive action to transform the Ford business” by Ford president Steven Armstrong.
It will include a range of measures to cut costs in areas such as purchasing, manufacturing and engineering, as well as to reduce “surplus labour”, for which union negotiations are just beginning. It is understood that the numbers of jobs affected will be in the thousands.
The plan’s two-pronged aim is to improve near-term profitability with the efficiency measures while working at top speed to offer a “more targeted” model range to match fast-improving competition. Every Ford model will include an electrified model, either mild, full or plug-in hybrid, or battery electric.
The company is also expected to announce further details of what it calls “a potential alliance” with the Volkswagen Group within days, perhaps at the Detroit auto show next week. Ford of Europe’s central aim, Armstrong says, is to deliver a pre-tax operating profit of 6% for the longer term as a way of building a sustainable business that currently employs 53,000 people across its 50 markets. Its unprofitable Russian joint venture, Ford Sollers, is under strategic review, says Armstrong, with a decision on its future likely in the second quarter.
Ford is establishing three business groups in Europe, for commercial vehicles (based in Dunton, Essex), for passenger cars (based in Cologne, Germany) and for an expanded range of imported models. The company wants to protect and enhance its leadership in commercials — potentially with help from Volkswagen — but insists that suggestions it will leave the passenger car market are wide of the mark.