Ford to trim unprofitable models as it seeks upmarket move

Ford returned to making a profit in Europe in 2015, for the first time since 2011, but the Blue Oval is not sitting on its laurels, and is about to embark on a major round of cost-cutting and model-range trimming as it seeks to consolidate its position in increasingly turbulent economic waters.

Ford of Europe posted a €232-million profit in Europe last year, but that’s not enough for the Detroit bean counters, wary of the massive losses that Ford’s European operations posted through the depths of the recession. With global stock markets still in spasm, and the Chinese market looking less and less like a safe haven, the plan is to cut jobs, trim unprofitable models and shore up the bulwarks against any potential financial shock. Given that, of the ‘Big Three’ US car makers, Ford was the only one to at least partially see the recession of 2008 coming, and had carefully aligned its finances to be able to cope (thanks in no small part to its now-legendary then-CEO Alan Mullaly) Ford’s rivals had better take note.

Ka out, Edge in

The first big change will be the dropping of the Ford Ka city car. The model, which currently shares production, chassis and engines with the Fiat 500 and is built in Poland, had been due to be replaced by a four-door affordable hatch, designed and largely built in India. It now looks very much as if the model will be discontinued in Europe altogether, although it will probably be offered in low-cost, especially far-eastern markets. The move will make barely a blip here - just 41 Kas were registered in Ireland in 2015.

Next up will be a glut of new SUVs and crossovers. We already have the EcoSport and Kuga, and those will be joined this year by the US-designed and built Edge. A larger seven-seat version of the Edge (possibly shared with the US-market Flex) is also planned, as is a medium-sized crossover to slot between the EcoSport and Kuga and act as a rival to the Nissan Qashqai and Renault Kadjar.

Mondeo S-Max crossbreed?

There are also rumours that, with a continuing squeeze on the market for large four-door saloons, that the next generations of Mondeo and S-Max could be somehow merged into one - a Renault-Espace-like hybrid of crossover, saloon and seven-seat MPV. Meanwhile, the upmarket Vignale brand, in spite of a generally cool initial reception from critics, will expand beyond its current Mondeo-only offering to include S-Max, Galaxy, Edge and Focus as well.

There will also be a major middle-management cull in Europe. Ford currently employs just over 10,000 people in ‘white-collar’ jobs in Europe, and while specific numbers of cuts have not yet been spoken of, the company is expecting to shed “hundreds” of workers through a voluntary severance programme.

Hybrids and electric plans

Speaking to Automotive News, Ford of Europe vice president Jim Farley said that "in the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a USD$259 million profit in 2015. This is a good first step", he commented. "We are absolutely committed to accelerating our transformation, taking the necessary actions to create a vibrant business that's solidly profitable in both good times and down cycles. We are creating a far more lean and efficient business that can deliver healthy returns and earn future investment. Our job is to make our vehicles as efficiently as possible, spending every dollar in a way that serves customers' needs and desires, and creating a truly sustainable, customer-focused business."

Ford will also press heavily on hybrid and electric vehicles, fields which its European models haven’t really engaged in up to now. A total of 13 new hybrid, plugin hybrid or pure electric vehicles are planned between now and 2020.

Executive vice president for Product Development Raj Nair said "the challenge going forward isn't who provides the most technology in a vehicle but who best organises that technology in a way that most excites and delights people. By observing consumers, we can better understand which features and strengths users truly use and value and create even better experiences for them going forward."