American automaker Ford announced recently that it is planning to cut down production in Europe by 2020 and will reduce its existing workforce in the region by 12,000. The firm said that this is part of its efforts to restructure business operations in Europe as it is losing money. Its long term plans include closure of five plants by 2020 including the one located in Bridgend at Wales and sales of another one in the countryside. Ford which currently has 51,000 people on its rolls in Europe hopes to reduce its workforce by application of voluntary redundancy.
The whole automobile industry now is going through several challenges related to technology and regulatory changes followed by weak demand in several major markets like China and USA. Ford announced that 2000 of the 12,000 jobs that are being removed are of permanent salaried employees. President of Ford Europe section Stuart Rowley while making this announcement said that these 2000 are from previous figure of 7000 layoffs that Ford is making across the world from its production units. He stated that this was one of the toughest decisions that the firm had to take as it would affect families and communities and they would do everything to reduce the impact on affected families.
He said that their management was in discussions with works councils, local elected representatives and trade unions to chalk out suitable plans for transition of the employees in an amicable manner. This reduction in workforce will cut down the firm’s salaried employees by 10 percent and will save it around $600 million annually. This is the second US firm to announce workforce cut-down after General Motors stated that it will cut down on 14,000 jobs. As part of its Europe workforce reduction exercise Ford is also cutting down 5000 jobs in Germany comprising of both salaries and temporary staff.