Ford to cut about 20% of Europe workforce in bid to boost margin

Ford will eliminate about 20% of the workforce across its European operations in a sweeping overhaul that reflects the challenges facing automakers in the region.

The restructuring, which has been announced piecemeal, will involve reducing its manufacturing footprint in Europe to 18 facilities by the end of 2020 from 24 at the beginning of this year.

Germany, the UK and Russia will be hardest hit by the cuts, which total about 12,000 staff and workers employed at joint ventures, Ford said 27 June.

"Separating employees and closing plants are the hardest decisions we make," Stuart Rowley, Ford's president of Europe, said in a statement.

Ford, struggling in the region's crowded and mature market for years, has been particularly hard hit by falling car sales in the UK as a result of the uncertainty surrounding the country's exit from the European Union.

The challenge of investing in electric, hybrid and autonomous vehicles -- while having to overhaul combustion engines to meet tougher clean-air rules -- has forced Europe's automakers to slash fixed costs and streamline their model portfolios. For example, Ford has or will cut the C-Max and Grand C-Max minivans and the Ka+ small car.

Underscoring the industry's woes, industry association ACEA on 27 June lowered its forecast for sales across the region, saying deliveries are likely to fall 1% this year. That compares with a previous prediction of 1% growth.

Ford announced in January a major revamp for Europe, but at the time did not specify the full extent of the job cuts. As part of the changes, six plants will be closed or sold by the end of next year, including the Bridgend engine plant in South Wales, a transmission plant in France, a transmission joint venture with Magna International in Slovakia, as well as two assembly sites and an engine plant in Russia.

Ford said that European operations are "on track" for significant improvement this year. Over the long term, the company is pushing to lift the division's profit margin to 6% -- lower than a previous goal of 8%.

Around 2,000 of the jobs to be cut are salaried positions, which are included among the 7,000 salaried jobs Ford is reducing globally, the automaker said. The rest are workers on hourly contracts or agency workers.

Ford Europe has 51,000 employees in Europe or 65,000 when joint ventures are included.