- Reductions amount to about 14% of carmaker’s local workforce
- Vice chairman says Europe, Germany lack clear EV policy agenda
Ford Motor Co. will look to eliminate another 4,000 positions in Europe, further retrenching within a region where the transition to electric vehicles is losing traction industrywide.
The reductions — which amount to about 14% of Ford Europe’s workforce — will primarily hit operations in Germany and the UK by the end of 2027, pending consultations with unions and governments. The automaker also announced Wednesday it will reduce production of Explorer and Capri EVs at its complex in Cologne, Germany.
Ford vowed in early 2021 to drastically overhaul its business in Europe, saying it would go almost completely electric by the end of the decade. That transformation hasn’t been going to plan, with the company announcing early last year that it would slash 3,800 jobs. Peers including Volkswagen AG and Stellantis NV have issued profit warnings in recent months, citing the broad slowdown in vehicle sales and governments pulling support for EV purchases.
“What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility,” John Lawler, Ford’s vice chairman and chief financial officer, said in a statement. He called for more public investment in charging infrastructure, meaningful EV incentives and greater flexibility in CO2 emissions-reduction targets, which the EU and UK are making more stringent next year.
Ford’s share of Europe’s passenger car market shrank to just 3.3% in the first nine months, from 4.1% in the same span last year, according to the European Automobile Manufacturers’ Association. The automaker is more competitive in the commercial vehicle business, which will take longer to electrify.
Chief Executive Officer Jim Farley is pressuring executives worldwide to lower costs that have put Ford at a competitive disadvantage to rivals. The company’s shares have plunged since July when it revealed soaring warranty expenses to repair vehicles were further eating into profit.
Ford plans to cut about 2,900 positions in Germany, 800 in the UK and 300 in the rest of the region.
“This is obviously a difficult day for Ford in Europe,” said Peter Godsell, vice president of human resources. “But we do believe this is necessary given the situation that we’re facing.”
Godsell specifically cited a significant increase in competition from Chinese manufacturers. “Our feeling is that we’re not on a level playing field as it relates to that competition, knowing it’s subsidized,” he said.
Read More: Why Europe Is Raising Tariffs on Cheap Chinese EVs
The job cuts mark yet another setback to Germany’s struggling industrial base. Last week, the Council of Economic Experts that advises the government scrapped its forecast for economic growth in 2024 to predict a second year of contraction, followed by just 0.4% expansion in 2025.
Ford will schedule short-time working days in Cologne for the first quarter and is scheduled to cease production at its factory in Saarlouis, Germany, next year. Volkswagen is weighing its first-ever factory closures in its home country, and suppliers including Schaeffler AG and ZF Friedrichshafen are eliminating thousands of positions.
— With assistance from Jamie Nimmo – Source: Bloomberg
