Transformation for Ford Europe

COLOGNE, Germany, Feb. 3, 2016 – Ford Motor Company is accelerating its transformation in Europe – including new product, brand and efficiency actions – to deliver improved profits in 2016 and a 6-8 percent operating margin for Ford of Europe in the longer term.

Ford’s European strategy calls for a more streamlined and profitable product line; more emotional and experiential brand communications; and a leaner cost structure to lower breakeven and help offset growing regulatory costs.

“In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a $259 million profit in 2015. This is a good first step,” said Jim Farley, Ford executive vice president, Europe, Middle East and Africa. “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.”

After closing three manufacturing plants in Western Europe since 2013 and reaching an innovative cost-saving agreement with labour unions in Germany, Ford of Europe continues to enhance its cost efficiency and manufacturing capacity utilization.

Ford today initiated a voluntary separation programme in Europe supporting a significant reduction in administrative and selling costs to reach industry benchmark levels of efficiency. With the move, Ford of Europe expects to save about $200 million a year on an ongoing basis.

“We are creating a far more lean and efficient business that can deliver healthy returns and earn future investment,” Farley said. “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.”

Ford of Europe said it would continue to drive improvements in its manufacturing operations, targeting efficiencies of greater than 7 percent year-over-year going forward, and improving its manufacturing capacity utilization.