Ford to cut 4,000 jobs in Europe

Once again, Ford has announced plans to reduce its European workforce by around 4,000 employees in 2027. There are 2,900 of them in Germany, 800 in the UK, and some 300 elsewhere in Europe. The car manufacturer hopes to increase its competitiveness in this way.

At the beginning of 2023, Ford announced a job cut of 3,800 people by 2025, also in the R&D divisions. This second job cut adds to it. Ford still has 32,000 people working for it on the Old Continent out of 174,000 worldwide.

Just recently, Ford reduced working hours at its Cologne plant due to low demand for electric cars. Ford now only builds two electric models, the Explorer and Capri, using the Volkswagen MEB platform.

The short-term work affects 2,000 of the 13,000 employees in Cologne and is due to run until January. The move was thus partly seen as a tactical calculation, as the CO2 fleet limits will require more electric cars in 2025 than at the end of the year.

Cost-competitive

But now Ford is cracking down and cutting 4,000 jobs by 2027. “The planned job cuts will primarily impact operations in Germany but also the UK, with minimal reductions in other European markets,” the company announced. However, it is unclear from the statement which areas in Cologne are affected by the job cuts.

The first sentence of the announcement is also important: “Ford Motor Company today announced restructuring plans to create a more cost-competitive structure and ensure the long-term sustainability and growth of its business in Europe.”

Therefore, the decision was made at Ford headquarters in Dearborn. However, the job cuts mentioned are still “pending consultations with its European social partners.” But the goal is clear.

Short-time work to be extended

Short-time work at the Cologne production plant will also be extended: “Due to the weak economic situation and lower-than-expected demand for electric cars, we are further adjusting the new Explorer and Capri production program. This will result in additional short-time working days at our Cologne plant in the first quarter of 2025.”

Ford has taken a risk by phasing out the small Fiesta so quickly and producing only electric cars at the Cologne plant. After all, the Explorer and Capri must sell well enough to sufficiently utilize a plant with an annual capacity of 250,000 cars.

However, as several MEB SUVs are already on the market, it is difficult for Ford to differentiate itself for customers and to beat, among others, the VW brands with higher unit numbers and established MEB production in terms of price.

Significant losses

Ford emphasizes that it has recorded “significant losses” in the passenger car segment in Europe in recent years. “The transformation is particularly intense in Europe where automakers face significant competitive and economic headwinds while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles,” Ford explains.

“Ford has been in Europe for more than 100 years. We are proud of our new European product portfolio and committed to building a thriving business in Europe for generations to come,” said Dave Johnston, Ford’s European vice president for Transformation and Partnerships. “It is critical to take difficult but decisive action to ensure Ford’s future competitiveness in Europe.”

Clear policy needed

Ford frequently refers to European market conditions and the political situation. In a letter to the German government, John Lawler, Vice Chairman and Chief Financial Officer of Ford Motor Company, reaffirmed Ford’s commitment to Europe and the 2035 emissions targets. But he also emphasized the need for everyone to work together to improve market conditions and ensure the industry’s future success.

“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 to help consumers make the shift to electrified vehicles, improving cost competitiveness for manufacturers, and greater flexibility in meeting CO2 compliance targets,” Lawler said.

Three pillars

A thriving Ford Pro commercial vehicle business defines Ford’s vision for its future European business. Ford has been the brand leader and one of the leading manufacturers for the past decade.

Secondly, a successful and profitable passenger vehicle business, competing in select segments with iconic vehicles that are distinctively Ford. “We will offer our customers a range of ICE, hybrid, and fully electric vehicles while meeting all European regulations.”

Thirdly, a modern, highly efficient industrial system that takes advantage of the latest innovation and technological advances in manufacturing and achieves fully competitive levels of cost and quality. “Ford is committed to the green transformation of our industry and doing our part to lower emissions.”