The American car manufacturer Ford announced on Tuesday “the next steps in the transformation” of its European activities, while the automobile industry is jostling to meet the current EU targets of stop selling new vehicles with internal combustion engines by 2035.
Calling Europe a “highly competitive region facing significant economic and geopolitical headwinds”, Ford said the goal was to restructure its operations to create “a leaner, more cost-competitive structure”.
This would include the “cutting of 3,800 jobs over the next three years”, around 2,300 at its European headquarters in Cologne in western Germany, around 1,300 in the UK and around 200 elsewhere.
“These are tough decisions, not taken lightly,” said Martin Sander, managing director of Ford Model e in Europe, quoted in the company’s press release. “We recognize the uncertainty this creates for our team, and I assure them that we will give our full support in the months to come. We will engage in consultations with our social partners so that we can move forward together in building a future. prosperous for our business in Europe.”
2,800 engineering positions to be filled, 1,000 in administrative functions
Ford said many of the job cuts were the result of plans to move away from the internal combustion engine, with the majority of layoffs looming in the engineering sector. This is because electric motors have considerably fewer moving parts and reduced complexity compared to internal combustion engines.
“Paving the way to a sustainably profitable future for Ford in Europe requires large-scale action and change in the way we develop, build and sell Ford vehicles,” Sander said. “This will impact the structure of organisations, the talents and skills that we will need in the future.”
Almost three-quarters of the planned layoffs will be in engineering, 1,700 in Germany, 1,000 in the UK and another 100 elsewhere on the continent.
Ford said the other job cuts would be for people in administrative roles, 600 in Cologne, 300 in the UK and another 100 elsewhere.
Those numbers were all still subject to consultation, the automaker noted. It also said it intended to achieve the reductions through voluntary programs.
The numbers were slightly higher than what unions had predicted as a worst-case scenario – somewhere in the region of 3,200 jobs – earlier this year.
Ford said it would retain an engineering organization of about 3,400 people in Europe, “focused on designing and developing vehicles, as well as creating connected services.”
In total, across Europe, in its wholly owned facilities and consolidated joint ventures, the company employs approximately 34,000 people.
Ford is cooperating with rival VW on electric motors
The automaker had already reported further cost-cutting efforts in early February when it presented its quarterly results, including a full-year net loss of $2 billion (just under €2 billion).
Ford had called the performance below expectations and said it was “attributable, in part, to execution issues in an environment of supply chain and production instability, driving higher costs. and volumes lower than forecast”.
Ford Chief Financial Officer John Lawler said at the time that the company would be “very aggressive” to cut spending in manufacturing and supply chain operations. He also said that the productivity of engineers in Europe was 25-30% lower than the company thought it should have been.
Last March, Ford announced an investment of around $2 billion in the Cologne site.
The launch of the company’s first fully electric car is planned in Cologne in the spring of 2023. However, it is a collaborative project based on the MEB (modular electric drive matrix) platform which underpins the Volkswagen ID4, among other models of the group.
Automakers borrow and share basic platforms for cars – which are then packaged, branded and sold under different badges and with different bodies – has become an increasingly common practice in recent decades. It looks set to continue, if not intensify, as automakers race to build electric cars with enough range for all-purpose use.
Meanwhile, Ford’s Cologne plant will stop production of its Fiesta small car by the end of June. It has been produced in Cologne in several versions since 1976. The company plans to stop production of two other models, the S-Max and Galaxy minivans, in Valencia, Spain by April this year.
Ford first moved to Cologne in 1930, attracted by the city’s then-mayor, Konrad Adenauer, who would become Germany’s first post-war chancellor after World War II.
With approximately 15,000 employees, it is the second largest private sector employer in the city of just over one million peopleafter Lufthansa.
Last year, Ford also announced around 3,000 job cuts in North America and India.again citing restructuring towards more power generation as the main driver of the move.
msh/fb (AFP, Reuters)