Ford, the world's second largest car manufacturer, is planning a wide-ranging European restructuring that could lead to a reduction in capacity exceeding 10 per cent, equivalent to more than 260,000 cars a year.
The company unveiled the first step of that restructuring yesterday, when it announced 1,500 job losses at its Dagenham plant. The factory, near London, is Ford's largest in Britain.
"Our recent financial performance in Europe has been poor and unacceptable, and we have to take the necessary action to return Ford of Europe to profitability," said Mr Nick Scheele, chairman of the company's European arm.
Ford made just $28 million (€28.5 million) profit in Europe last year, based on sales of $30 billion. A fourth-quarter loss at Ford's European operations prompted demands for tough remedial action from Mr Jacques Nasser, chief executive.
The US car maker is seeking $1 billion in cost savings this year. Mr Scheele warned that Ford had to address significant over-capacity in Europe.
Although the company has already closed plants in Portugal and Poland, Mr Scheele warned that further action was needed.
Ford said the strength of sterling was "a secondary factor" in its decision to scale back output at Dagenham. The company claimed it was more exposed to sterling than any other large volume car maker, with 28 per cent of its European supplier base located in Britain.
