Ford announces major restructuring and job cuts in Europe

If it was GM last year, this year it is Ford. Ford Motor Company (F) is said to be planning a major restructuring of its European operations which will result in job cuts, factory closures and production stoppage for certain models.

The company is reportedly looking to revamp its entire business worldwide, an effort that will cost more than $10 billion over the next five years, and the Europe restructuring is part of this plan. Ford is planning to close a transmissions plant in France and stop the production of its C-Max model at one of its facilities in Germany.

Ford has more than 50,000 employees in Europe and the company is reportedly planning to eliminate thousands of positions as part of its efforts to transform its European operations.

Ford has been seeing losses in Europe over the past year. During the third quarter of 2018, losses widened to $245 million from $53 million in the third quarter of 2017. The company also saw a slight drop in market share during the period to 7% from 7.3% in the year-ago quarter.

A bumpy ride ahead as Ford embarks on full-scale reorganization

Amid changes in the auto industry and shifts in customer preferences, Ford is planning to stop the production of underperforming models. In November 2018, Ford’s total vehicle sales in its Euro 20 markets dropped by 5.4% compared to November 2017. This included a 9.3% decrease in passenger vehicle sales. Sales for SUVs rose 18%.

Ford saw revenue declines in its South America and Asia-Pacific regions as well during the third quarter. The company is seeing weakness in some of its markets including Russia and China, and has plans to revise its strategy in Russia. Total vehicle sales in China fell 55% in November 2018 compared to 2017.

The company is also facing challenges in the UK due to Brexit and strategic changes might be necessary if the impacts from Brexit do not turn out to be favorable. Last year, Ford’s peer General Motors (GM) caused an uproar when it announced job cuts and factory closures in North America as part of its restructuring efforts. As of 3:00 pm ET, Ford’s stock was down 0.7%.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.