Ford forced to slow down production at Cologne EV plant

Due to weak demand in the European EV market, Ford is slowing down its Explorer and Capri EV production at its sole electric car factory in the EU, in Cologne, Germany. Ford will apply for short-time work, a government furlough scheme of temporary unemployment whereby workers are sent home by a company in financial distress but do not lose their jobs.

“The significantly lower than expected demand for electric vehicles, specifically in Germany, requires a temporary adjustment of production volumes at the Cologne Electric Vehicle Centre,” a Ford spokeswoman told DPA press agency.

Ramping up production, now slowing down

At the end of September, Ford Cologne started ramping up production of its two European EVs, the Explorer SUV and the new Capri, a fully electric crossover. Converting a factory that has made ICE cars for 93 years, with the popular Fiesta being the last to roll off production lines, to assemble a completely different type of car, a battery electric vehicle, cost Ford around two billion euros.

That required incredible planning, training, and work. That challenging job was for the plant manager, the Belgian Vic Daenen, the former plant manager at Ford Genk (Belgium), which had to close in 2014. Both EVs built in Cologne today are up to 70% more Volkswagen than Ford as they extensively use VW’s MEB platform, siblings of the ID.4 and ID.5.

2,600 fully employed

In essence, Volkswagen’s MEB platform, which underpins the Ford models, defines most of the car, including electric motors, batteries, drivetrains, and software. Ford adds its accents with different body side panels, bonnets, and roofs fabricated and welded locally. Also, the interior has a distinct Ford label, but it basically drives the same as VW’s ID.4 and ID.5.

It sounds like a simple thing to accomplish. Still, it took Ford and its plant manager over a year to convert the factory and ‘re-invent’ some of the production processes, as both carmakers have different ways of doing this. At the same time, making the factory of the future ‘lean and green,’ meaning being carbon neutral.

Ford Cologne now has 2,600 fully employed workers and 400 part-time workers in the factory, compared to 4,500 in the glory years. Training these people in time to build a completely different type of car took a minimum of 12 training days or 157 hours per employee, or a total of 320,000 hours. They are now threatened by temporary unemployment.

630 cars per day

Ford Cologne was finally ramping up production to 630 cars per day, or a maximum of 230,000 per year. However, analysts think Ford will need to sell at least 200,000 EVs in Europe a year to meet the EU’s CO2 targets for the car industry.

Still, all previsions are in red, as the EV market has cooled drastically. This jeopardizes the health of the once-thought-of ‘rock-solid’ German car industry, Not at least for one of the world’s biggest carmakers, Volkswagen, and its daughter Audi, who are forced to close factories. Volkswagen, which is making a lot of money licensing its MEB platform to Ford Cologne, can’t afford to lose that too.

Unlike most of the 13,000 Ford employees (from the original 20,000) still working in the company’s European headquarters around Cologne, plant manager Vic Daenen is unsure that the ’empire’ will never end.

Need to produce cheaper

Earlier, talking with journalists visiting the factory, he pointed out that all Western carmakers must produce cheaper and with shorter development cycles to compete with China.

Although the Ford factory is automated to the maximum extent, meaning 600 completely new robots in all disciplines, still 2,600 employees are needed to provide products for the EV sales targets required for the factory’s survival.

Daenen said the European automotive industry is shooting itself in the foot with the EU imposing tariffs on Chinese import cars. He thinks that welcoming the Chinese to build their cars in Europe to preserve local employment is a false promise. For example, Daenen pointed to brands that transfer up to 2,000 Chinese workers to Hungary to live in container villages near their factories.

Lowering expectations

If Europe is to compete with China, employees might have to lower expectations of higher wages, reducing working hours, and more time off. For example, in a factory like the one in Cologne, Ford employees have, on average, 53 holidays annually. On top of that – on average – employees in car factories like Ford’s report sick for 17 days, even more at Volkswagen.

Statutory annual leave in China is five days for employees who have worked one to ten years, ten days for those who’ve worked 10 to 20 years already, and fifteen days for the longest-serving. That comes on top of two major week-long holidays: Spring Festival in February (also known as Chinese New Year) and the National Day holiday in October and a few other single public holidays.

But if one of these happens to be on a weekday, employees in companies like BYD are often asked to compensate for lost productivity on a Sunday.