LONDON/COLOGNE – Ford Motor (NYSE: F) said it would cut around 14% of its European workforce on Wednesday, blaming losses in recent years due to weak electric vehicle demand, poor government support for the EV shift, and competition from subsidized Chinese rivals.
Ford said the 4,000 job cuts, representing around 2.3% of its total workforce of 174,000, would be primarily in Germany and Britain. The U.S. automaker is the latest – after Nissan, Stellantis (NYSE: STLA), and General Motors (NYSE: GM) – to cut costs as the sector faces challenges that include EVs that are too expensive for consumers to buy.
Shares in Ford Motor (NYSE: F) were down 1.8% following news of the measures, which will be a big blow in particular for Germany, where Europe’s biggest carmaker Volkswagen is threatening to close factories, cut wages and axe thousands of jobs to allow it to compete better.
Ford has been battling to bring down costs in its global business, also lagging competitors like GM significantly in the U.S. market where it has struggled to deal with quality and warranty problems, supplier issues, and waste in the automaker’s 121-year legacy business.
Germany’s deepening political crisis, too, has added uncertainty for companies grappling with growing trade tensions with China and the implications of Donald Trump’s U.S. election victory.
Ford said the layoffs should take place by the end of 2027, pending union discussions. It said 2,900 cuts would be in Germany and 800 in Britain and it would reduce production of its Explorer and Capri EV models at its Cologne plant.
Ford Europe vice president Peter Godsell told reporters that Ford was experiencing “weaker demand for electric vehicles than we had previously forecast and we continue to have challenges around our operating costs”.
This meant Ford needed “decisive action to restructure our business”, he said, adding that while the company hoped the job cuts would address its problems, he could not rule out further measures if market conditions worsened.
‘TOUGH CONFRONTATION’
Through September this year, Ford’s sales in Europe fell 17.9%, far outstripping an industry-wide decline of 6.1%.
German unions said they would not accept the plans as there were alternatives, and asked Ford’s European management to enter talks over the future of the business.
“If there is no willingness to do so, we are also prepared for a tough confrontation,” said Knut Giesler of IG Metall, who runs the German union’s branch in the state of North Rhine-Westphalia, home to Ford’s major Cologne plant.
Ford Motor (NYSE: F) also called on the German government, in particular, to provide more incentives and better charging infrastructure to help consumers transition to EVs.
Berlin ended EV subsidies in December last year. EV sales in Germany in the first nine months of this year were down 28.6%.
“What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility, such as public investments in charging infrastructure, meaningful incentives … and greater flexibility in meeting CO2 compliance targets,” Ford’s chief financial officer John Lawler wrote in a letter to the German government.
Ford has been undergoing a painful restructuring in Europe, announcing 3,800 job cuts in February 2023. It is closing its Saarlouis plant in Germany next year, with further job cuts.
The European Union has slapped tariffs on Chinese-made EVs, saying they benefit from unfair government subsidies.
Marcus Wassenberg, managing director at Ford’s German division, said the move reflected ongoing changes, singling out Germany for its high labor and energy costs.
All the German job cuts would be at Ford’s main site in Cologne and account for 24% of the factory’s workforce.
