Ford to slash thousands of jobs in Europe as CEO’s pay rises

Ford to slash thousands of jobs in Europe as CEO’s pay rises

Ford will cut at least 5,000 jobs in Germany and an undetermined number in the UK as part of a plan to turn round its struggling operations in Europe.

The cuts were unveiled on the same day the US carmaker announced that chief executive Jim Hackett had received a pay package worth $17.8m last year, up from $16.7m a year earlier, despite the carmaker’s profits halving during the year and a 40 per cent fall in its share price.

Mr Hackett has vowed to get to grips with Ford’s non-US business, with plans to turn round Europe, Latin America and China in an $11bn global cost-cutting programme.

Last year the company saw profits halve, as poor performance outside of the US dragged down otherwise-strong results from the company’s heartland.

Ford employs 53,000 people in Europe, across 15 plants, including 24,000 in German and 12,000 in the UK.

It plans to lay off thousands of workers, restructure its business and reduce its vehicle line-ups in an attempt to return to profit in the region, where it lost $400m during 2018.

The business has been hurt by the decline in diesel sales, shifting exchange rates and a softening market.

On Friday, the company said: “Ford today offered voluntary separation programmes for employees in Germany and the UK to help accelerate the plan and return to sustainable profitability.

“Through these programmes and other initiatives, Ford of Germany expects to reduce its headcount in excess of 5,000 jobs, including temporary staff. The total number of positions impacted in the UK is still to be determined.”

Some of the losses in Germany come from ending production of the C-Max minivan, one of the products Ford will stop making as it reduces its portfolio to more profitable models.

The numbers of jobs affected may rise depending on how many people take voluntary redundancies in either country.

Steven Armstrong, Ford’s European chief executive, has previously warned that the company would be forced to make “significantly more dramatic” cuts in the UK if Britain leaves the EU without a trading deal. Ford makes engines in the UK using largely imported European components, then ships those engines to assembly plants on the continent.

The carmaker’s latest turnround actions were announced on the same day Ford disclosed executive pay for its most senior officers.

While Mr Hackett received a higher package, due to a rise in his basic pay and the number of stock awards, several of his key deputies saw their remuneration fall.

Jim Farley, who is Ford’s global markets boss, saw his pay fall from $13.4m to $5.9m, while Joseph Hinrichs, global head of manufacturing saw his package drop from $12.1m to $5.8m.

Both received higher basic pay, with Mr Farley collecting $1m compared with $973,000 and Mr Hinrichs receiving $1.1m, up $20,000.

Mr Hackett received $1.3m in basic pay, a $1m bonus, $10.3m in stock awards and an additional $3.6m from an incentive plan.

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