Car manufacturing giant Ford has said it plans to cut thousands of jobs across Europe over the next three years as part of a global drive to reduce costs and be competitive in the electric vehicle market.
Some 3,800 jobs will be axed in total, including 2,300 at the United States-based carmaker’s Cologne and Aachen sites in Germany; 1,300 in the United Kingdom; and 200 in the rest of Europe.
The moves announced on Tuesday will see one in nine jobs within the company’s product development and administration divisions on the continent slashed in total.
Ford said it was looking for “a leaner, more competitive cost structure” in Europe.
It added it will embark on consultations “with the intent to achieve the reductions through voluntary separation programs”.
‘Difficult decisions, not taken lightly’
The job cuts came amid a sea change in the global car industry from gas-guzzling combustion engines to electric vehicles.
Governments are pushing to reduce the emissions that contribute to climate change, and a resulting race to develop electric vehicles has generated intense competition among carmakers.
Ford is spending $50bn on electrifying its product range, pivoting to a slimmer lineup with higher prices to compensate for the rising costs of producing electric cars.
It said its strategy to offer an all-electric fleet in Europe by 2035 has not changed and that production of its first European-built electric car is due to start later this year.
“Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build and sell Ford vehicles,” Martin Sander, general manager of Ford’s Model e unit in Europe, said in a statement.
“This will impact the organisational structure, talent and skills we will need in the future,” he added.
Ford will retain some 3,400 engineers in the region who will build on core technology provided by their US counterparts and adapt it to European customers, Sander said.
Cost-reduction drive
Chief Financial Officer John Lawler warned in early February that the carmaker faced $5bn in higher costs this year and said the company would be “very aggressive” in reducing expenses in its manufacturing and supply chain operations.Lawler also said at the time that the productivity of engineers in Europe was 25-30 percent lower than it should be.
Cuts in the UK, which amount to one in five of the workforce there, will be mostly at the carmaker’s research centre in Dunton, southeast England.
The cuts in Germany equate to about 12 percent of the workforce there.
Ford’s European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6-percent operating margin in the region, a goal thrown off course by the COVID-19 pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2 percent of sales.
Across the continent, Ford has some 34,000 employees at wholly owned facilities and consolidated joint ventures.