Ford Motors to shut down both manufacturing plants in India, 6 in Europe as part of its Global downsizing

Ford was among the first multi-national automotive companies to enter our market back in 1994. Now, 27 years on, the American carmaker is stopping the production of its cars and SUVs in India.

With close to $2 billion accumulated loss and falling volumes, US carmaker Ford Motor Company’s Indian subsidiary held a town hall for its employees to announce its plan to curtail manufacturing operations in India. The decision will impact over 4000 employees as Ford will cease to be a mass-market brand in the country.

The company  will wind down vehicle assembly in Sanand, Gujarat by the fourth quarter of 2021 and vehicle and engine manufacturing in Chennai by the second quarter of 2022.

It follows the lines of General Motors, which exited India in 2017.

“The decision was reinforced by years of accumulated losses, persistent industry overcapacity and lack of expected growth in India’s car market,” said Anurag Mehrotra, President and MD at Ford India. “I want to be clear that Ford will continue taking care of our valued customers in India, working closely with Ford India’s dealers, all of whom have supported the company for a long time.”

Ford also confirmed it will still offer some of its niche products like Mustang through the import route and that it will look to bring in new hybrid and full electric vehicles like the Mach-E here. As for the current product list, sales of cars like like Figo, Aspire, Freestyle, EcoSport and Endeavour will cease once dealer inventories are sold.

On the other hand, Ford Motor Co. will eliminate about 20% of its workforce across Europe and close six factories in a sweeping overhaul aimed at reviving the money-losing region as the company also moves to prepare for the future of electric and self-driving cars.

The restructuring, which has been announced piecemeal, will involve reducing its manufacturing footprint in Europe to 18 facilities by the end of 2020 from 24 at the beginning of this year. Germany, the U.K. and Russia will be hardest hit by the cuts, which total about 12,000 regular staff as well as workers employed at joint ventures, Ford said Thursday.

In Europe, Ford has struggled for years in the crowded and mature market. Given its strength in the U.K., the automaker has been particularly hard hit by falling car sales there as a result of uncertainty surrounding the country’s exit from the European Union.

In addition to grappling with sluggish demand, carmakers are scrambling to meet stiffer environmental regulations starting in 2020. Based on its 2018 carbon-dioxide emissions, Ford faces a potential penalty of around 2.56 billion euros ($2.91 billion), according to researcher Jato Dynamics.

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