LONDON – Ford Motor Company announced Thursday it would cut about one-fifth of its European workforce and shut down five factories as the company cope with weak demand for its cars.
The automaker, having difficulty making profits in Europe, said that about 12,000 of its 65,000 workers across Europe would lose their jobs with most voluntary separation programs offered.
The job cuts, along with plans to build more electric vehicles in the region, were announced as part of a "new business model" to streamline the company's European operations.
Ford closes three plants in Russia, one in France and one in the UK, and leaves it by 2020 with 18 plants in the region. In addition, two UK headquarters will be consolidated and relocated to one location.
In the assembly plants in Saarlouis and in Valencia (Spain) the layers are also reduced.
"Separating people and closing plants is the toughest decision we make, and given the impact on families and communities, we're helping to reduce the impact," said Stuart Rowley, president of Ford of Europe. in a press release.
The job cuts were announced along with plans to launch new vehicles, including those with the option to use electricity.
"In line with the company's global reorganization, Ford will be a more targeted company in Europe, generating higher revenues by focussing on customer needs and a lean structure," Rowley said.
In recent months, companies such as Nissan, Honda, and Jaguar Land Rover have announced plans to pull out of parts of Europe where stricter regulations for fossil fuels, sluggish sales, and Brexit have complicated markets for automakers.
At the same time, traditional automotive companies face increased competition from technology companies and have turned to China, the world's largest manufacturer and seller of electric cars.
Since Ford announced in January to cut staff and facilities, it has partnered with Volkswagen to promote the development of electric and self-propelled vehicles and cut costs.
The company said Thursday that all new models had options for electrification and that electric vehicles would be built in Europe.
"Our future is rooted in electrification," said Rowley.