Ford plans to cut hundreds of jobs in Europe

PanARMENIAN.Net - Ford Motor said Wednesday, Sept 26, that it plans to cut hundreds of jobs in Europe in an effort to reduce costs, according to CNNMoney.

The reductions in salaried positions will be voluntary, Ford said, and other savings will be achieved through reductions in expenditures on agency workers and purchased services.

Ford is facing strong headwinds in Europe, as the continent's debt crisis has contributed to a drop in demand and difficult market conditions for automakers. Ford estimated this summer that by the end of the year, its losses in Europe would top $1 billion.

"When you look at the GDP in Europe, almost every country is clearly in a recession now and it's getting worse," Ford CEO Alan Mulally told CNN last week. "We're very pleased with the leadership trying to look at fiscal and monetary policies trying to deal with sovereign debt, but clearly a long way to go."

Fortunately, sales are strong enough elsewhere that Ford still expects improved company-wide operating profits, even with that European loss.

Still, the CEO hinted that changes were on the way, and said that production levels in Europe must be reduced.

"That's the most important thing we do for residual values and to protect the interest of the customers," Mulally said. "So we continue to take those actions to restructure ourselves."

Experts say fixing the auto industry's problems in Europe could cost billions, in addition to the ongoing losses because labor laws in much of Europe make it far more difficult and expensive to close unprofitable plants.