Ford Motor Company F is planning additional job cuts in Germany, Spain and the U.K., per Reuters.
Per Benjamin Gruschka, head of the works council at Ford’s Cologne plant, it is unclear how many jobs will be cut in Germany under the new restructuring plan. A decision is anticipated by the end of June.
Ford has completed half of its previous restructuring plan, which involved cutting 2,300 jobs in Germany, reducing the workforce there to 13,000. Last year, the company announced it would cut 3,800 jobs in Europe as it transitions to electric vehicle production, which requires fewer workers.
Recently, F announced plans to cut up to 1,600 additional jobs at its Valencia, Spain, assembly plant as part of this restructuring.
The company has discontinued its high-selling but low-margin models like the Focus and Fiesta to focus on crossovers, SUVs, all-electric vehicles and light commercial vehicles. Full production of the Explorer battery-electric car began in Cologne on Jun 4, 2024, with a second electric model set to be unveiled on Jul 10, 2024.
Per industry association ACEA, Ford’s passenger car sales dropped by 15% to 152,552 in the European Union, European Free Trade Association and U.K. markets in the first four months, with market share falling from 4.3% to 3.4%.
Per John Lawler, chief financial officer of Ford, the company will encourage partnerships similar to the one with China to become more capital efficient. Ford aims for $2 billion in cost reductions this year, mainly from material and manufacturing changes, particularly with the vehicles of model year 2025 that are launching in the second half of 2024.
This year, Ford’s EV segment saw a price drop of 20%. Consequently, cost reduction failed to keep up with price cuts. Now, F plans to cut costs in its Model e line and reduce prices by 2% this year. The company also aims to grow its services segment, including software, fleet management and telematics. It plans to double the penetration of connected vehicles and growth services business, increasing the gross margin in this category to 40%.
Zacks Rank & Other Key Picks
F currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the auto space are Blue Bird Corporation BLBD, Oshkosh Corporation OSK and American Axle & Manufacturing Holdings, Inc. AXL, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 9.86% and 11.92%, respectively. The EPS estimates for 2024 and 2025 have improved 12 cents and 10 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for AXL’s 2024 sales and earnings suggests year-over-year growth of 3.05% and 544.44%, respectively. The EPS estimates for 2024 and 2025 have moved up 2 cents and 17 cents, respectively, in the past 30 days.
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Ford Motor Company (F) : Free Stock Analysis Report
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