Ford Europe Strategy Refresh Emphasizes SUVs, Electrification, Cost-Cutting
Ford has announced a new strategic approach in Europe that will emphasize differentiation between passenger vehicles, commercial vehicles, and imports for more sustainable profitability.
“We are taking decisive action to transform the Ford business in Europe,” said Steven Armstrong, group vice president and president, Europe, Middle East, and Africa. “We will invest in the vehicles, services, segments, and markets that best support a long-term sustainably profitable business, creating value for all our stakeholders and delivering emotive vehicles to our customers.”
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In the shorter term, Ford is planning a “reset” for 2019 and 2020 that will see the reduction of vehicle offering complexity, refined management structure, reduced labor costs, and a new operating model that establishes three key customer-focused groups: Commercial Vehicles, Passenger Vehicles, and Imports. Ford hopes that this comprehensive approach will lead to a 6 percent earnings before interest and taxes margin.
In having three focused groups, Ford will refine its approach to product. Commercial vehicles will integrate smart vehicles, services, and partnerships, including the rumored alliance with Volkswagen AG. Passenger vehicles will all feature electrified options of some kind, and SUVs and crossovers will become the primary focus as sales continue to grow. Import sales will include the Mustang, Edge, and “another SUV to be revealed in April.”
Ford also revealed plans to end production at the Ford Aquitaine Industries plant in Bordeaux, France, this coming August; end production of the C-MAX and Grand C-MAX at the Saarlouis Body and Assembly Plant in Germany; consolidate UK headquarters and Ford Credit Europe headquarters at Ford Dunton Technical Center in South East Essex; and review operations for the Russian-based Ford Sollers JV.
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