Ford Motor Co. will lay off about 11% of its workforce in Europe as the US carmaker cuts costs in the latest sign of industrial disruption as the auto industry shifts to electric vehicles.
Of the total 3,800 job Ford said on Tuesday that workers in Germany and the UK would be hardest hit with around 2,300 and 1,300 positions to be eliminated over the next three years, respectively. Germany’s IG Metall last month estimated about 3,200 people would lose their jobs.
“Electric vehicles are much less complicated,” said Martin Sanders, general manager of Ford’s electric vehicle business at Europe, said in an interview with Bloomberg Television. “The entire industry is going to become significantly leaner than it used to be.”
Ford is moving its product line in Europe to battery-only by 2035, and has previously said that reducing the time and effort in developing and manufacturing electric cars will result in smaller product development teams. than. The company is also cutting jobs in the US as CEO Jim Farley aims to save more than $3 billion annually while investing more than $50 billion in electric vehicles through 2026.
The company, with around 173,000 employees globally, had about 35,000 positions in Europe as of the end of last year, with its largest factory in Cologne with 14,000 workers. inside UK, the company has approximately 7,000 direct employees across three main locations. The company intends to make the cuts through voluntary arrangements, it said Tuesday.
The US manufacturer’s confirmation of further cuts in its European business added to the prolonged downturn in the market. Years of restructuring have seen the sale or closure of several factories amid widespread job cuts. According to the European Automobile Manufacturers Association, the passenger car market share last year was 4.4% with total sales of just over 510,000 vehicles.
Michael Ward, an analyst at Benchmark Co., said in a report: “The sector is barely profitable in 2022 and has lost three out of the last five years. ratify. “We view the actions as necessary and positive.”
The analyst estimates the removal of 3,800 jobs will cost the company at least $4 billion over the next three years. Ford was down 1.2% in early New York trading, compared with a year-over-year decline of 23%.
Ford is likely to cut even more in the coming years, with its plant in Saarlouis, Germany, employing 4,600 workers, slated to cease production of the compact Focus by 2025. The company has no plans manufactures other vehicles there then and is in talks with potential plant buyers, including BYD Co. of China, according to people familiar with the matter.
