Ford's Europe Unit Asks Employees to Quit to Boost Profit Margin

  • Carmaker to eliminate less profitable models, focus on SUVs
  • Ford sees modest growth in European car market this year

Ford Motor Co. is asking some of its European employees to quit as part of an effort to boost margins that will also eliminate some models in favor of popular and lucrative sport utility vehicles. 

The company aims to save about $200 million annually by paring back its 10,000-person European workforce, who are based mostly in Germany and the U.K., Ford said Wednesday. The program will probably help cut jobs “in the hundreds,” Jim Farley, Ford’s executive vice president for the region, said in an interview. 

Ford is adding new or refreshed products including the Kuga SUV this year in Europe to help lift last year’s 1 percent operating margin to a long-term target of 6 percent to 8 percent. The carmaker returned to profitability last year, posting a pretax operating profit of $259 million after boosting sales 10 percent to about 1.5 million vehicles, slightly outpacing total registration increases in Europe. 

The push into new product lines with five new SUVs in the next three years as well as plug-in hybrid and electric cars will mean some other models cease production, Farley said. He declined to say which those will be. Ford said it expects SUV sales in Europe to jump by more than 30 percent this year to more than 200,000, while the total European market is set for only modest growth.

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