Ford and Jaguar Land Rover unveiled sweeping job cuts across Europe in a bid to cut costs as they grapple a slump in demand for diesel vehicles, tougher emissions rules and slowing China sales.
JLR, which is based in central England, said on Thursday that it will cut 4,500 out of 42,500 jobs, while Ford said it will slash “thousands” of jobs as part of an overhaul that could result in plant closures and the discontinuation of some models, Reuters reports.
“We are taking decisive action to transform the Ford business in Europe,” Steven Armstrong, Ford’s group vice president for Europe, Middle East and Africa, was quoted as saying in a statement.
Ford Europe, which employs 53,000 people, has been losing money for years and pressure to restructure its operations has increased since arch-rival General Motors raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot, Reuters noted.
A trade war between China and the United States combined with Britain’s pending exit from the European Union has fragmented once global markets, forcing carmakers to reassess the profitability of individual models and locations.
JLR said demand in China, once one of its strongest countries, fell by 21.6 percent in 2018, the biggest drop of any of its markets.
“The economic slowdown in China along with ongoing trade tensions is continuing to influence consumer confidence,” said Jaguar Land Rover Chief Commercial Officer Felix Brautigam.
The job cuts come as Ford and JLR have been hit by a fall in demand for diesel-engine cars and after European policymakers last month agreed stricter pollution limits, forcing carmakers to accelerate investments to make electric cars.
Ford said it will seek to exit the family vans or MPV segment, review its operations in Russia, and combine the headquarters of Ford UK and Ford Credit to a site in Dunton, Essex to achieve a 6 percent operating margin in Europe.
Ford Europe reported a 245 million euro (US$282 million) loss before interest and taxes in the third quarter, equivalent to a negative 3.3 percent EBIT margin.
Jaguar Land Rover, which is owned by India’s Tata Motors and employs around 40,000 people in Britain, on Thursday reported a 4.6 percent drop in full-year sales to just under 600,000 vehicles.
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