'Decisive action' | Ford's difficulties with EV transition mean jobs cuts for European units

Ford's difficulties with EV transition mean jobs cuts for European units

Troubled car giant Ford announced approximately 4,000 job cuts across its European operations, citing ongoing challenges in the electric vehicle (EV) market and increasing competition from Chinese rivals.

The layoffs, which represent a significant 14% its Ford’s European workforce, will predominantly affect employees in Germany and the UK, with the automaker aiming to complete the redundancies by the end of 2027.

The job cuts come as Ford contends with weaker-than-expected demand for EVs, high production costs, and limited government support for the transition to electric vehicles.

Ford Europe Vice President Peter Godsell explained the difficulties in adapting to a rapidly evolving market, saying, “Weaker demand for electric vehicles than we had previously forecast and ongoing operating cost challenges mean we must take decisive action to restructure our business.”

Of the planned reductions, 2,900 positions are to be eliminated in Germany, while 800 jobs will be cut in the UK. Ford’s Cologne plant, which produces EV models such as the Explorer and Capri, will bear the brunt of the layoffs in Germany. The move will also reduce the plant’s workforce by approximately 25%.

Union backlash in Germany

The announcement has sparked significant backlash from labor unions. Knut Giesler, a representative of IG Metall, Germany’s largest industrial union, described the decision as a threat to Ford’s long-term viability in Europe. "The announcements jeopardize the German sites on a massive scale," Giesler said, calling for immediate discussions with Ford’s works council and unions to secure the future of its German operations.

The layoffs coincide with broader challenges in Germany’s automotive sector, including rising labor and energy costs and a decline in EV sales following the withdrawal of government subsidies in December 2023.

Potential impact on US operations

Ford’s struggles in Europe raise questions about potential ripple effects on its US parent company. The automaker has already undergone restructuring in other regions, including a decision to close its Saarlouis plant in Germany next year, resulting in significant job losses. If challenges persist, similar measures could extend to Ford’s US operations, where HR departments and leadership may find themselves managing restructuring efforts while safeguarding employee morale and the company’s reputation.

As the automotive industry undergoes a global shift toward electrification, Ford’s travails highlight the difficulties of navigating market shifts and regulatory challenges. The company faces a delicate balance in restructuring its operations while maintaining market position in the move towards EV.

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