Late last year, GM announced a plan to lay off thousands of US employees in an effort to cut costs and restructure for the future success of the company. This week, Ford released a statement outlining a similar strategy for their underperforming European market. 

After revealing a plan to spend $11 billion globally on reshaping the company's business back in July, Ford is zeroing in on Europe's struggling operations. According to CNN Business, "in the first nine months of 2018, Ford reported European losses of $199 million, compared to a profit of $278 million in the same period of 2017."

Ford C-Max
The lackluster performance of the Ford C-Max will shut down the German plant where it's built. (image: Ford Europe)

Ford's plan includes a major restructuring of operations in the EU, where it currently employs 53,000 workers. The changes, some of which are already underway, involve plant closures and thousands of layoffs across both salaried and hourly employees. The goals Ford hopes to achieve are near-term profitability and a stronger competitive position for the company's long-term growth. 

The strategic initiatives to get Europe to profitability include ending production of unprofitable vehicles, investing resources into the successful commercial vehicle segment, strategic partnerships and a focus on electrification. To achieve these results quickly, Ford must cut costs which explains the upcoming layoffs.

According to Ford's press release, the company "aims to achieve the labor cost reductions, as far as possible, through voluntary employee separations in Europe and will be working closely with social partners and other stakeholders to achieve this objective."

The most imminent next steps Ford will take include shutting down production at a plant in Bordeaux, France that manufactures automatic transmissions by August 2019, a review and restructuring of the Ford Sollers joint venture in Russia, and a consolidation of the Ford UK and Ford Credit Europe's headquarters in South East Essex. 

Ford Europe Gears Up for The FutureFord infographic(image: Ford)

Ford is establishing three separate groups in Europe to include commercial vehicles, passenger vehicles, and imports. Commercial vehicles are a success story for Ford Europe, with the company leading the segment in sales volume. Ford aims to maintain this position and pursue further grow through strategic partnerships such as a prospective alliance with Volkswagen. 

For the less lucrative passenger vehicle segment, Ford will look to cut underperforming models like the C-MAX and Grand C-MAX. The goal is to create a more targeted lineup of vehicles with a focus on electrification technology for every single model. "From Fiesta to Transit, either a mild-hybrid, full-hybrid, plug-in hybrid or full battery electric option will be offered, delivering one of the most encompassing line-ups of electrified options for European customers" Ford's statement claims.  

Lastly, the imports group in Europe will focus on iconic vehicles like the Ford Mustang. Building on the successful SUV segment, joining the Ford Edge will be a brand new import SUV to be announced in April and a new Mustang-inspired all-electric performance utility vehicle coming in 2020.