General Motors no longer does volume business on the old continent, and it appears rival Ford is ready to make some serious changes of its own. The Times (subscription required) reported Sunday Ford is preparing for an $11-billion restructuring effort and both cars and employees are on the chopping block.
GM Europe remained in the red for well over a decade, but Ford’s troubles are more recent. The automaker enjoyed several years of profits after losing money from 2010 to 2014. But, 2017 saw profits drop and 2018 is looking worse for the Blue Oval. Thus, the Ford Mondeo mid-size sedan, the S-Max and the Galaxy are reportedly heading toward the end of life in Europe.
The car cull likely won’t be as dramatic as Ford’s doing in North America, though. The automaker will only sell the Mustang; every other vehicle will be a crossover, SUV, or truck filling out dealership lots.
As for employees, the report claimed Ford is prepared to slash 12 percent of its global workforce, which tallies over 200,000 individuals. Europe is rumored to bear the most casualties. Yet, a wildcard remains, according to The Times.
In a somewhat similar move to GM Europe, Ford may seek out a rival automaker to form a joint venture in an effort to decrease development and production costs. GM once partnered with PSA Group to share production and development of some models, but eventually, the automaker dissolved the relationship. As we’re all aware, PSA Group then surfaced as Opel and Vauxhall’s buyer.
While it’s unlikely we’ll ever see GM return to Europe in a traditional sense, the automaker has left the door open. After spending billions to finance the sale of Opel and Vauxhall, GM CEO Mary Barra said she’d “absolutely” consider reentering Europe. But, she referred to “transformative” new products—likely self-driving cars and perhaps ride-sharing services in the future.
Comments
Honestly, its about time American car companies start focusing in on America again.
Yeah, it’s better for them to retreat and run away from established markets with their tails between their legs.
~~~
Really now? When haven’t the Big 2.5 not had their focus on the US? I could answer that with the Malaise era, but Detroit learned from that mistake, whereas the public is unwilling to forgive them.
If anything, this story is part of a lengthy history of GM’s struggles with the European market. Outside of the few fringe sales of Tahoe’s and Silverados, the only real foothold GM has there is with the Corvette and Camaro, and even those are just a blip on the radar.
GM wants what Ford has had for decades, and that’s the volume market, the mainstream. Ford Europe more or less operates autonomously, and without Detroit breathing down their neck, has firmly cemented Ford in the European market.
In June 2018, Ford and VW agreed to common projects in the development of light commercial vehicles, but nothing concrete yet seems to have resulted from this.