In late April this year, Ford Motor Co. (NYSE: F) announced plans to kill its Taurus, Fusion, C-Max and Fiesta models in the United States, leaving the country’s Ford dealers with two car brands — Mustang and Focus. In late July the company said it may face a restructuring charge of as much as $11 billion in the current fiscal year and that Ford’s European business would be a focus of that restructuring.
According to a report from Reuters citing a report in The Times of London, Ford’s intentions in Europe are becoming clearer. Taking a page out of its U.S. playbook, Ford intends to end production of its Mondeo, Galaxy and S-Max models in Europe and turn more of its attention on the market for sport utility vehicles. The company also plans to reduce the number of dealers it has in Europe.
Ford builds all its diesel engines for the European market in Britain, along with other engines and some transmissions. The company also has assembly plants in Germany, Russia and Romania. The effects of Brexit on sales of Ford cars in the European Union is not known, but no one is expecting the news to be good for Ford.
For the first seven months of this year, Ford’s overall European sales totaled 843,800 units, down slightly (0.2%) year over year. But sales of Mondeo are down 4,100 (11.5%), Galaxy sales are down 2,100 (18.6%) and sales of S-Max are down 6,400 (31.5%).
As in the United States, Ford has reportedly decided to focus attention on light trucks (the midsize Ranger) and compact SUVs (the Ecosport and the Kuga).
Morgan Stanley analysts have suggested that Ford will fire up to 12% of its 200,000-strong global workforce, with most of the jobs being pared in Europe. The company has not yet decided on how it will restructure its European operations, but it also is reported to be considering a joint venture with one of its rivals.
Ford’s stock closed down about 2.3% Friday, at $9.48 in a 52-week trading range of $9.35 to $13.48. The consensus price target on the stock is $11.00.