Ford Motor Co. said it will cut thousands of jobs, weed out slow-selling variants and potentially close entire factories in Europe.
Ford Motor Co. said it will cut thousands of jobs, weed out slow-selling variants and potentially close entire factories in Europe, as the carmakers's global cost-cutting drive targets a region that has been a drag on earnings for years.
"There'll be significant impact across the region," Armstrong said. "This isn't a one or two year issue. We have had periods of profitability but not on the level it should be."
As the global car market shows first signs of a slowdown after years of growth, Ford has overhauled its global operations, exiting the sedan business in America to focus on bigger vehicles and shifting its Chinese business to more local production.
Europe has been particularly tough for the company because of the key market in the U.K., where the chaos surrounding Brexit has thrown up an additional challenge for the company.
Ford was among U.S. carmakers that fell short of expectations when the industry presented sales for last year, adding to concern that a slowdown may occur in 2019. China, which has fueled the industry's growth, disclosed on Wednesday that auto sales fell for the first time in more than two decades.
Ford's debt has been trading like it's speculative grade, and Moody's Investors Service cut the carmaker's credit rating to one step above junk in August.
The stock traded below $8 late last year for the first time since November 2009, the year its Detroit peers General Motors and Chrysler went bankrupt. Analysts have speculated Ford's generous dividend may be at risk.
Ford shares, which have slumped 33 percent over the past 12 months, rose 0.9 percent to $8.80 in pre-market trading.
Ford has already said it will cease production at a transmission plant in Bordeaux, France and has started labor talks at the Saarlouis factory in Germany to end production of the C-MAX compact van. A review of the Ford Sollers joint venture in Russia is expected to conclude in the second quarter, it said.
Over the long term, Ford is targeting earnings before interest and taxes of 6 percent of sales in Europe. This year, performance will already be "significantly better" than 2018, Armstrong said.
"We are continuing to invest in the business, especially in electrified cars," said Armstrong. "We will still have a comprehensive lineup of cars in future with primarily SUVs and crossovers."
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