Ford Slashes 4,000 Jobs as European EV Dream Stalls
Detroit, Wednesday, 20 November 2024.
In a significant industry shift, Ford announces a 14% reduction of its European workforce by 2027, primarily affecting Germany and UK operations. The move reflects a broader crisis in Europe’s EV market, where sales dropped 5.8% this year amid fading government incentives and rising Chinese competition.
Strategic Retrenchment
Ford Motor Company (NYSE: F) is making a strategic decision to cut 4,000 jobs in Europe, marking a significant retrenchment in a market where electric vehicle (EV) momentum is faltering. This reduction, which represents approximately 14% of Ford Europe’s workforce, underscores the challenges facing the automaker as it navigates economic headwinds and intense competition, particularly from Chinese manufacturers[1][2].
Impact on German and UK Operations
The job cuts will primarily impact operations in Germany and the United Kingdom, with 2,900 positions in Germany and 800 in the UK slated for elimination by the end of 2027. The reductions are part of Ford’s broader strategy to streamline its operations amid declining EV sales, which fell by 5.8% in the first nine months of 2024[3][4]. The company’s production adjustments include scaling back on the Explorer and Capri EVs at their Cologne, Germany complex, which will see reduced working hours starting in the first quarter of 2025[5].
Challenges and Industry Context
Ford’s decision comes amid a backdrop of a shrinking overall car market and increased competition. The automaker’s market share in Europe fell from 3.5% to 3% as overall sales decreased by 15.3% in the first nine months of the year. Additionally, Ford’s net profit dropped by 26% in the third quarter of 2024, partly due to a $1 billion accounting charge related to a canceled electric SUV project[2]. The European Automobile Manufacturers’ Association has called for a faster review of lower CO2 limits set for 2026, highlighting the regulatory pressures exacerbating the already challenging market environment[1][3].
A Call for Policy Support
Ford’s leadership emphasizes the need for supportive policies to advance e-mobility in Europe. John Lawler, Ford’s CFO, has pointed out the lack of a clear policy agenda that includes public investments and incentives to help consumers transition to electrified vehicles. This sentiment echoes across the industry, with competitors like Volkswagen also facing similar pressures, leading to considerations of plant closures in Germany[4][5].
The Road Ahead
As Ford gears up to celebrate its 100th anniversary in Germany in 2025, the company is keenly aware of the need to adapt to the evolving automotive landscape. The move to cut jobs and reduce production is seen as a necessary step to maintain competitiveness. However, with growing trade tensions, particularly concerning Chinese imports, Ford and other European automakers are calling for collaborative efforts among industry stakeholders to navigate these turbulent times[2][3].