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story.lead_photo.caption Ford Motor Co., Executive Vice President of Product Development, Hau Thai-Tang stands near the redesigned 2020 Ford Explorer during its unveiling, Wednesday, Jan. 9, 2019, in Detroit. Ford's aging Explorer big SUV is getting a major revamp as it faces growing competition in the market for family haulers with three rows of seats. (AP Photo/Carlos Osorio)

FRANKFURT, Germany -- The head winds buffeting the global auto industry made themselves felt in Europe on Thursday as mass-market carmaker Ford and luxury-focused Jaguar Land Rover announced sweeping restructurings that will cost thousands of jobs.

Ford Motor Co. said it will drop an unspecified number of jobs in Europe as it seeks to make its business there more consistently profitable. A media officer confirmed that the jobs lost would number in the "thousands." The company said it would consult with unions and would aim to cut jobs through voluntary measures as much as possible. The reductions will affect employees across all departments, the company said.

Ford is refocusing on commercial trucks and SUVs and dumping less lucrative models while shifting production to electric cars over the longer term.

Jaguar Land Rover, owned by India's Tata, plans to slash 4,500 jobs worldwide, as it responds to the sales slowdown caused by Britain's planned exit from the European Union, flagging demand for diesel-powered vehicles and a downturn in China.

Ford of Europe, based in Cologne, Germany, has 53,000 people working for it directly and 68,000 when joint ventures such as those in Russia and Turkey are included.

The company's new plans follow moves to close an automatic-transmission plant in Bordeaux, France, combine administrative headquarters in Britain and end production of its C-Max models in Saarlouis, Germany.

"In the last couple of decades, Ford of Europe has never really been sustainably profitable," Steven Armstrong, company vice president and head of its operations in Europe, Middle East and Africa, said in a conference call with reporters. "We will invest in the vehicles, services, segments and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers."

Ford started downsizing in Europe in 2013 as a glut of cars meant its losses kept piling up, but its efforts to retrench in the region have been costly because of severance payments. From January to November 2018, it made up about 6.4 percent of new cars in the region, compared with roughly 24 percent for the VW Group and 16 percent for Groupe PSA, according to the European Automobile Manufacturers Association.

Global automakers face multiple challenges.

They must adjust to sweeping change expected from a move toward battery-powered and autonomous vehicles, and toward providing transportation as a service through ride-hailing and car-sharing smartphone apps.

Carmakers also fare acing a shift in consumer preference away from sedans and hatchbacks to SUVs.

Meanwhile government regulation in the European Union and China are pushing them to develop more electric cars.

On top of that, consumer and business confidence have been hit by worries about Britain's possible departure from the European Union without a negotiated trade deal, and by the U.S.-China trade disputes.

One key head wind -- slowing auto sales in China -- was the big issue for Jaguar Land Rover. The company says the 4,500 in cuts will be in addition to the 1,500 people who left the business in 2018. The company employs about 44,000 people in the U.K.

Christian Stadler, professor of strategic management at Warwick Business School, said Jaguar was facing a "perfect storm of challenges," with the drop in Chinese sales being the most immediate problem.

"That is [Jaguar Land Rover's] biggest market, but car buyers there are reluctant to make expensive purchases as the economy is growing at its slowest rate for a decade and the country is locked in a trade war with the U.S.," Stadler said.

The cuts will not just be bad news for the staff of Jaguar Cars, the United Kingdom's biggest automaker, Stadler said. Thousands more workers in the U.K. are part of Jaguar supply chain -- jobs that will now also be at risk.

" [Britain's U.K. exit] is another factor, with businesses increasingly concerned about the prospect of a 'no deal' [exit], which would mean tighter border controls," he said. "That would cause massive disruption as the U.K. car manufacturing industry is so closely integrated with Europe."

The Europe announcements follow General Motors' disclosure in November that it would lay off 14,000 factory and white-collar workers in North America and put five plants up for possible closure as it restructures to cut costs and focus more on autonomous and electric technology. Volkswagen has said it will see an unspecified number of job reductions as it changes three plants in Germany to production of electric vehicles, but assures there will be no involuntary departures before 2028.

Information for this article was contributed by David McHugh and Danica Kirka of The Associated Press; by Ellen Milligan and Irene Garcia Perez of Bloomberg News; and by Amie Tsang of The New York Times.

Business on 01/11/2019

Print Headline: Ford, Jaguar Land Rover plan to slash jobs in Europe


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