Ford Motor and Jaguar Land Rover revealed sweeping job cuts across Europe on Thursday as automakers are having hard time with a slump in demand for diesel vehicles, tougher emissions regulations and a global economic slowdown led by China.
Tata-owned JLR, based in central England, stated it will slash 4,500 out of 42,500 jobs, while Ford stated it will slash “thousands” of jobs as part of an overhaul that could result in plant shut downs and the discontinuation of some models.
A trade war between China and the United States together with Britain’s pending exit from the European Union has fractured once global markets, forcing automakers to reassess the profitability of individual models and regions.
In recent quarters, JLR and Ford’s profits have lagged behind those of rivals BMW, Volkswagen and Peugeot, ramping up investor pressure on managers to recover losses.
“We are taking decisive action to transform the Ford business in Europe,” stated Steven Armstrong, group vice president, Europe, Middle East and Africa, in a statement on Thursday.
Ford Europe, which hires 53,000 people, has been losing money for years and pressure to re-innovate its operations has boosted since arch-rival General Motors G.M raised profits by selling its European Opel and Vauxhall brands to France’s Peugeot SAC.
JLR stated demand in China, once one of its strongest countries, dropped by 21.6 percent in 2018, the biggest fall of any of its markets.
The job cuts come as Ford and JLR have been hit by a drop in demand for diesel-engined vehicles and after European policymakers last month agreed tougher pollution limits, forcing automakers to accelerate investments to develop electric cars.