DETROIT -- Ford said early Thursday it will cut hourly and salaried jobs in Europe as part of a "comprehensive transformation strategy to strengthen its brand and create a sustainably profitable business in Europe."
It did not say how many jobs it would cut, noting that talks with unions are just starting. The automaker has lost nearly a billion dollars in Europe in the last five years, and the long-expected cuts are part of a global "fitness" plan.
"I'm not going to get into specific numbers today," Steve Armstrong, group vice president and president, Europe, Middle East and Africa, said in a call with reporters. "You'll see reductions across the workfoce. It's a European-wide review, not a country specific process."
He noted that Ford employs 50,000 people across Europe. Cuts will be a "significant number of positions." He did not discount "thousands" when asked during the conference call. Ford employs 50,000 people across Europe.
"Ford of Europe has never really been sustainably profitable," he said, noting that the unit will show another loss for 2018. "As we look to the future of the business globally, (CEO) Jim Hackett and (CFO) Bob Shanks have been very clear: We can only afford to allocate capital to places where we can get a return on that invested capital."
The company in a news release outlined plans for new all-electric vehicles and hybrids, and said it would leverage relationships, "including a potential alliance with Volkswagen AG, to support commercial vehicle growth."
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"We are taking decisive action to transform the Ford business in Europe," Armstrong said in the news release, sent from the company's office in Cologne, Germany.
"Ford is starting consultations with its union partners and other key stakeholders," the release said. "Ford is accelerating key fitness actions and reducing structural costs. In parallel, the fundamental redesign will include changes to Ford's vehicle portfolio, expanding offerings and volumes in its most profitable growth vehicle segments, while improving or exiting less profitable vehicle lines and markets."
Industry observers have long called for action by Ford in Europe, while also noting it is more difficult there than in the United States to negotiate job cuts.
"Ford Europe has been in desperate need of restructuring for at least a decade. It lost a billion dollars over the last five years, and after losing considerable market share between 2008 and 2013 it has been unable to gain any of it back since then," Jon Gabrielsen, a market economist who pulls data from SEC filings, said Thursday. "The announcement today may not even be enough to turn it around independently, but may instead be preparing the way for partnerships with Volkswagen that we hope to learn more about next Tuesday."