LONDON - Ford Motor Co. may cut up to 24,000 jobs and stop producing models such as the Mondeo as it tries to revive its European business, the Sunday Times reported over the weekend.
The second-largest U.S. carmaker lost $73 million in Europe between April and June, hurt by declining diesel sales and weak car offerings, the newspaper said. Ford faces additional uncertainty from Brexit, which could lead to tariffs on cars and parts traded between the U.K. and continental Europe, the Times said.
Morgan Stanley analysts estimate Ford will shed 12 percent of its 202,000 workers, mainly in its European operations, the Times reported. Ford has about 12,000 workers in the U.K. in factories, research and development, administration and dealerships, according to the newspaper. Ford is likely to end production of the Mondeo, Galaxy and S-Max people carriers in favor of more profitable sport utility vehicles, the Times said, citing unnamed people familiar the plans. The sources said Ford may also cut its number of dealerships.
The review’s conclusions, which aren’t expected for several months, may also recommend putting some or all of Ford’s European unit into a joint venture with a rival such as Volkswagen AG, the newspaper reported. Ford Europe President Steven Armstrong said the company is focused on “aggressively attacking costs, implementing facility and product program efficiencies to lower product and material cost, as well as capital intensity in Europe,” the Times reported.
Last week Ford canceled plans to import a new crossover model from a plant in China after President Donald Trump’s tariffs undermined the business case for bringing the vehicle to the U.S. market. Moody’s Investors Service last week lowered Ford’s credit rating to a step removed from junk, citing risks associated with a turnaround effort that Chief Executive Officer Jim Hackett has warned could cost $11 billion and take years.