Ford to cut jobs in Europe to save £138m a year

Manufacturer launches voluntary redundancy programme blaming rising regulatory costs

Ford is to cut jobs across its European operations in an effort to save £138 million ($200 million) a year.

Ford Europe returned to profit in 2015 for the first time in four years. However, the carmaker announced its transformative European strategy, which calls for a more “streamlined and profitable product line”. To help reach its annual savings target the company has launched a voluntary redundancy programme, blaming the cuts on the need to “lower breakeven” and help offset growing regulatory costs.

“In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a £178 million ($259 million) profit in 2015. This is a good first step,” said Jim Farley, Ford executive vice president of Europe, Middle East and Africa. “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.” 

As part of its new streamlined focus, Ford of Europe announced its plans to launch seven “new and refreshed” vehicles in 2016, including the Focus RS performance hatch and the new Kuga and Edge SUVs, while eliminated less profitable vehicle lines over time.

It will also launch five new vehicles to compete in the SUV market, which is Europe’s fastest-growing market segment, investment in its Ford Smart Mobility range and expand its upscale Vignale line.

Ford of Europe said it would continue to “drive improvements in its manufacturing operations”, targeting efficiencies of more than 7% per year.

“We are creating a far more lean and efficient business that can deliver healthy returns and earn future investment,” Farley said.

Ford currently employs 13,890 people in the UK.