Ford to slash hundreds of jobs
2012-09-26 10:11
EURO CRISIS HITS US AUTOMAKER: Ford hopes to recoup its 2012 R3.3-billion loss by sacking several hundred workers at manufacturing plants across Europe.
DETROIT, Michigan - Ford said it plans to retrench several hundred salaried workers in Europe as part of a larger restructuring in the money-losing region.
The company is offering voluntary buyout programmes in the UK, Germany and the rest of Europe. It's also cutting temporary salaried positions and some outsourced services.
Ford stressed that the separations would be voluntary. The US automaker expects several hundred people will leave but it won't know exact figures for several months.
COST-CUTTING MEASURES
Europe's economic crisis has hurt vehicle sales, which dropped nearly seven percent in the European Union in the first six months of 2012. Ford also has been hit by an influx of cheaper imports from South Korea since Europe lowered its tariffs on Korean vehicles in 2011. The automaker lost R3.3-billion in Europe in the second quarter and expects to lose R8.2-billion in the region for the whole of 2012.
In addition to the salaried-staff cuts, Ford is studying plant closures and other cost-cutting measures. The company has said it is using its North American restructuring, in which it closed plants, renegotiated union contracts, accelerated new products and laid off thousands of workers, as a template for Europe.
Chief financial officer Bob Shanks said: "I think we have a track record in terms of understanding what needs to be done and having the will and the ability to execute it."
'NO PHENOMENON'
Earlier in September 2012, Ford announced plans to bring 15 new or restyled vehicles to Europe over the next five years to revive sales. Among the new offerings will be the new Mustang, EcoSport small SUV and Edge mid-size SUV.
Shanks said Ford's line-up in Europe was not as profitable as it could be because the range was heavily tilted toward smaller, less profitable, cars. He also warned analysts that the restructuring will take time:
"The recovery of Europe will not be a two-quarter phenomenon."
