Ford said it meant to double the profitability of its commercial vehicle business in Europe in the next five years, supported by a restructured Ford Sollers joint venture in Russian Federation and a strategic alliance with Volkswagen VOWG_p.DE . But it also comes as Ford rethinks its underlying business model, shifting from passenger cars to light trucks, and from gas- and diesel-powered vehicles to those running on batteries.
Group chief executive Jim Hackett announced last autumn a massive restructuring of the American firm, aiming to save Dollars 11 billion and turn Ford into a more "agile" group with faster decision-making processes.
Ford has been in the midst of making major changes since undergoing a management shake-up in May 2017 that saw Jim Hackett, the former Steelcase CEO, named its chief executive officer.
The leaner structure and strategy rethink mean Rowley expects profitabiity for the second half of this year to "significantly improve" over the £315 million loss posted in Europe last year. The company will reduce its footprint in Europe by reducing factories and laying off 12,000 employees.
In a news release, Ford said it will have at least three new nameplates in the next five years, growing the company's utility vehicle line-up.
"Separating employees and closing plants are the hardest decisions we make", said Ford of Europe president Stuart Rowley.
Ford has already announced that as part of the changes it has, or will, phase out the C-Max, Grand C-Max minivans and the Ka+ city vehicle that are available in Europe. Ford claims that the three new business groups will have separate structures and leaders for marketing, manufacturing and product development. In the US, the Mustang will be the only passenger auto remaining by next year, and similar moves are taking place in other markets, though not to quite the same extent.
"We have a winning hand in Europe and it's called commercial vehicles", then-Chief Financial Officer Bob Shanks said at a May 15 Goldman Sachs conference in NY.
Many manufacturers are restructuring as customer tastes shift, as electrification becomes a must-have due to stricter emissions standards, and as autonomous vehicles loom on the horizon.
According to Ford, the closures were the result of improved manufacturing efficiency.
Ford's chief executive, Jim Hackett, instigated the cuts to the carmaker's global business, which lost more than $800m (£631m) outside north America past year. I originally implied that this would be true globally.