Ford to axe less-profitable models in Europe and trim workforce

Ford will reduce the size of its workforce and axe some less-profitable models in its range, as the company strives to increase its profitability in Europe.

As part of a major Ford of Europe overhaul announced today, the company said it would introduce a "voluntary separation" programme, which would allow workers to leave the company at their own behest. The move is expected to save $200 million (about £138m) annually, and is designed to give Ford “industry beating levels of efficiency”.

The Blue Oval also announced that it would be “eliminating less profitable models” from its product range. Among those models is the current Ka, which is due to end production this year. An all-new Ka is planned for 2019, and the model has already been spotted testing, but Autocar understands the new model will be significantly different to today's car, and will increase in size.

In the future, the Ford statement said it will put a greater emphasis on SUVs and crossovers, a strategy that was first announced last September. The Ford Ecosport, Edge and Ford Kuga models will be joined by two new crossovers, which Autocar understands will be based on the Ford Fiesta and Ford Focus.

Ford said it wants to improve its European profits in 2016 and grow its operating margin. The company said its European strategy calls for a “more streamlined and profitable product line; more emotional and experimental brand communications; and a leaner cost structure to lower break-even and help offset growing regulatory costs.”

Announcing the plan today, Ford’s European boss Jim Farley said: “In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a $259 million (about £178m) profit in 2015. This is a good first step.”

“We are absolutely committed to accelerating our transformation, taking the necessary actions to create a vibrant business that’s solidly profitable in both good times and down cycles. Our job is to make our vehicles as efficiently as possible, spending every dollar in a way that serves customers’ needs and desires, and creating a truly sustainable, customer-focused business.”

The company says it will launch seven new or refreshed vehicles in 2016, including the new Focus RS performance hatchback already driven by Autocar. It will also expand its hybrid and electric offerings in Europe. A new version of the Focus Electric is already known to be in development, and, in total, Ford will add 13 new electric vehicles to its range by 2020, as well as providing electrified versions of 40% of its model range.

Another area of growth will be all-wheel drive. The firm currently offers eight models with all-wheel drive and expects to sell around 140,000 AWD vehicles in Europe this year.

Ford will also expand its current super-luxury ‘Vignale’ line-up, which currently consists of only one model, the Mondeo Vignale - to include five models by 2017.