LONDON -- Ford Motor plans to cut hundreds of white collar jobs in Europe as it seeks to lift its weak profitability in the region.
The automaker aims to find annual administrative savings of $200 million in the region, Ford said in a statement today.
Ford's administrative staff in Europe will be offered voluntary layoffs to reduce the company’s 10,330 salaried headcount, Ford of Europe President Jim Farley told Automotive News Europe in a telephone interview.
Ford did not give a figure of how many jobs will go. Based on previous layoff programs, Farley expects the number of staff taking up the offer to be in the "hundreds."
After losing $3.1 billion in Europe from 2012 through 2014, Ford had a pretax profit of $259 million in the region last year. Its pretax operating margin was 0.9 percent.
Ford said it is targeting a higher profit and operating margin this year and a 6 percent to 8 percent operating margin in the longer term.
Manufacturing savings
Ford also said it plans to reduce its European manufacturing costs by 7 percent. The savings will come from "pretty much everywhere," Farley said, without giving a figure.
Farley said increased automation was a possibility the company is considering to reduce manufacturing costs. "Automation isn’t always a positive return, but certainly in many cases it can improve our efficiency,” he said.
Logistics was another area in which Ford could make savings within manufacturing, he said.
He said Ford was consulting with unions to make savings in labor costs. Ford has closed three plants in Europe since 2013.
"We are absolutely committed to taking the necessary actions to create a vibrant business that’s solidly profitable in both good times and down cycles," Farley said.
Ford will also make other cost reductions in selling, general and administrative expenses, including using agencies for work currently done by staff, Farley said. "We are not wholly dependent on the staff cost reductions to achieve the $200 million," he said.
