Business News

Ford Europe chief: 'Hundreds' to take redundancy

Ford Europe to shed jobs
VIDEO2:3402:34
Ford Europe to shed jobs

Ford 's president for Europe, the Middle East and Africa told CNBC he expects "hundreds" of its approximately 10,000 salaried employees to take voluntary redundancy as the group steps up efforts to cut costs and target durable profitability.

The group said on Wednesday if planned to cut costs by $200 million annually and is taking additional steps to revamp its lineup.

Those cost actions will help to make the business leaner, Jim Farley said. Asked if the revamp would include plant closures, Farley said he had "no new news to make."

The U.S. automaker made a full-year profit of $259 million in Europe in 2015 for the first time since 2011, helped by a 10-percent gain in vehicle sales. Farley said the group was looking to improve that this year. "We think we're going to do better in '16 than '15," he said.

"We've made great progress. We got back to profitability last year. We expect to do even better and a lot of the cost actions are already in play," Farley said.

"We're seeing a lot of cost savings in our manufacturing operations and logistics sequencing and even the amount of hours it takes to build a car. "

It will also increase its range of sport-utility vehicles (SUVs), which last year outsold all other segments in Europe for the first time, and scrap less profitable models. Asked if high oil prices posed a potential risk to this strategy, Farley stressed that the image of that product was "very urban".

"It's not an offroad vehicle, and we have seen even with high gas prices that this segment continues to grow," he said,

Ford is following up on a restructuring program under which it closed three European factories and cut thousands of jobs. It shut an auto-assembly plant in Genk, Belgium, in 2014 after closing a stamping plant in Dagenham, Britain, and a van factory in Southampton, Britain, the year before.

Capacity utilization was about 90 percent and the group was aiming to improve manufacturing efficiency, Farley said.