Ford’s Job Cuts and Plant Closures in Europe Not Enough for Revival image

Although Ford will close plants and cut jobs in Europe to stem losses, this might not be enough as sales continue to fall in the region.

Ford had to deal with the unions’ wrath for its decision to close plants and cut 6,200 jobs in Europe, part of its plan to reduce losses in the region, as well as excess capacity. Less than five months since announcing this restructuring plan, Ford’s plunging sales show that the automaker still struggles to win back business from rivals as it rebuilds profitability.

Ford’s sales in Europe for December, January and February accounted for the worst three-month sales performance for any mass automaker, reflecting the US company’s failure in its plan to offer increased incentives to solve the overcapacity issue.

Ford was the second automaker after PSA Peugeot Citroen to act on overcapacity, by choosing to cut jobs and close plants in Genk, Belgium and England. Over the first two months of the year Ford’s sales dropped 23.4% in Europe, more than twice the average market decline, and its market share fell 1.2 points to 6.6%.

“The assumptions they made when they published their plan are no longer valid,” said Philippe Houchois, a London-based analyst with UBS. “You can only restructure when you’ve got a view of where the market is going.”