Ford Motor Co. (F - Get Report) said Thursday that it will exit some of Europe's biggest markets, and cuts thousands of jobs, as car sales around the world slump and uncertainly surrounding Britain's Brexit plans stifle investment.
Ford said it will review its operations in Russia, combine its U.K. headquarters just outside of London and shutting a transmission plant in France as part of a regional overhaul aimed at turning its European operations into profit. Ford also said job cuts in its 53,000-strong workforce would follow, but hoped "as far as possible" they would come through voluntary action.
"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."
Ford shares fell 0.6% in trading on Thursday, after yesterday's 4.24% advance.
News of the European strategy changes come amid multiple media reports that Ford will announce a deeper alliance with Volkswagen AG (VLKAY) , the world's second largest carmaker, at next week's auto show in Detroit.
"We see real value in working together," said Ford president of global markets Jim Farley. "The discussions have been very specific."
China's automobile market, the world's largest, recorded its first annual decline in more than two decades last year as new car sales slumped amid a slowing economy and rising trade tensions between Washington and Beijing.
The China Passenger Car Association said Wednesday that sale fell 6% over the whole of 2018 to just over 22.7 million units. That figure is firmly ahead of the 17.5 million tally recorded in the U.S., but shows the first year-on-year decline since the early 1990s.