Ford and Toyota announced they are pulling workers and stopping production on cars overseas for the time being.
Toyota is temporarily ending production in China for the next month or so, while Ford is considering the idea of layoffs and buyouts in Europe. Hundreds of workers will lose jobs in Europe as part of a large restructuring plan in the money losing region.
Despite the fact that Ford's sales are expected to be up around 4 percent through September according to Goldman Sachs, the company's struggle in Europe has not improved at all so far this year. The company will offer voluntary buyout programs in Germany, the U.K. and the rest of Europe.
Some outsourced services will be cut as well. Ford has been hit by an influx of cheaper imports from South Korea after Europe lowered its tariffs on Korean vehicles last year.
"So far this year, Ford sales are down 752,600 units, a decrease of 12 percent compared to the same period last year in Europe's traditional 19 markets," The Detroit News reported on Tuesday afternoon.
Europe's economic crisis has hurt car sale numbers which have dropped over 7 percent in the European Union in the first six months of the year. Tensions have been running high between the two countries due to an argument over islands in East China Sea.
Ford lost $404 million in Europe in the second quarter. It expects to lose $1 billion in the region this year. Ford shares fell 2 percent, or 23 cents, to close at $10.09 on Tuesday as well.
Ford had previously announced earlier this month that the company had planned to bring 15 new or restyled vehicles to Europe over the next five years to revive sales. Among the new offerings mentioned were the Mustang sports car, EcoSport small SUV and Edge mid-size SUV.
"The recovery of Europe will not be a two-quarter phenomenon," said Chief Financial Officer Bob Shanks in a press conference this week.
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