The party is officially over for the auto sector - and now it's time to pay the bill.
Ford is set to potentially slash up to 12,000 jobs at manufacturing plants across Europe, including 3,000 jobs in the UK, as part of a massive cost cutting plan, according to Yahoo. The company also confirmed that it would close or sell 6 of its 24 facilities across Europe by the end of 2020.
Ford said that most of its cuts will come “primarily through voluntary separation programmes.” Ford says that 2,000 of the 12,000 jobs that will be "impacted" are salaried positions.
This comes on the same day that UK vehicle production is said to be down for the 12th straight month, dropping 15.5% in May. 20,000 less vehicles were manufactured in the UK last month than in 2018, according to the Society of Motor Manufacturers and Traders (SMMT).
The global auto industry continues to grind to a halt as a result of recessionary economies, the U.S./China trade war, and higher emissions standards in Europe. There are fears that Brexit could put additional pressure on production going forward.
Ford called the cuts “the most comprehensive redesign in the history of its business in Europe.”
Plants in Russia and France will be closed, in addition to the company's Ford of Britain and Ford Credit Europe headquarters in Warley.
Stuart Rowley, president of Ford of Europe, said:
“Separating employees and closing plants are the hardest decisions we make, and in recognition of the effect on families and communities, we are providing support to ease the impact. We are grateful for the ongoing consultations with our works councils, trade union partners and elected representatives. Together, we are moving forward and focused on building a long-term sustainable future for our business in Europe.”
Ford employs about 65,000 people across Europe.
GM had previously sold its European Open and Vauxhall brands in 2017, citing Brexit as "the final straw" for making cuts.
“Implementing our new strategy quickly enables us to invest and grow our leading commercial vehicle business and provide customers with more electrified vehicles, SUVs, exciting performance derivatives and iconic imported models. Our future is rooted in electrification.”
Two weeks ago we noted that despite a momentary breather for the U.S. auto market in May, China had posted its worth month for auto sales ever. In May we noted that European auto stocks were under pressure as a result of sales falling for the 8th consecutive month. Bank of America had commented that "the auto cycle had peaked" in a note put out toward the beginning of the month.