Ford is cutting another 4,000 jobs in Europe as it struggles to keep up with the market shift to electric vehicles (EVs). The American automaker said the “very disruptive” EV market and new competition are causing significant losses in the region. Ford's announcement comes as China's leading EV manufacturer, BYD, is ramping up global deliveries.
Ford cuts more jobs in Europe amid EV woes
“Ford has been in Europe for more than 100 years,” said the company's European Vice President for Transport and Cooperation, Dave Johnston, on Wednesday.
As the market shifts to EVs and new competition emerges, Ford is fighting for its share. The company has suffered “significant losses” in recent years amid a “very disruptive” influx of new EV rivals.
Ford plans to cut another 4,000 jobs in Europe by the end of 2027 as part of its restructuring. The company blamed “weak economic conditions” and “lower than expected” demand for electric vehicles.
The planned cuts will mainly affect Germany, but some will also affect the UK. Ford said in a press release that other European markets will see “slight reductions. “
Ford has also slowed production of the new electric Explorer and Capri, both built at its revamped Cologne EV facility in Germany.
Last week, a German newspaper Kölner Stadt-Anzeiger (with Automobilwatch) reported that the employees of this center will be put on temporary working hours. A Ford spokesperson confirmed the move, citing a “rapidly declining” EV market.
Ford confirmed the plans on Wednesday, saying it would lead to temporary layoffs at the Cologne plant in the first quarter of 2025.
An urgent call to action
In a letter to the German government, Ford's CFO, John Lawler, emphasized the company's commitment to Europe and its 2035 emissions target. However, he also issued an urgent call for all stakeholders to work together to promote this change. Lawler added:
What we lack in Europe and Germany is a clear, clear policy plan to promote electronic mobility, such as public investment in charging infrastructure, meaningful incentives to help consumers switch to electric vehicles, improving cost competitiveness for manufacturers, and flexibility. meet CO2 compliance targets.
Despite the restructuring, Ford still wants to be a player in Europe. The next generation of Ford vehicles in Europe will be “software defined” with a “different” design.
The company will focus on its Ford Pro commercial business while competing in certain passenger car segments to increase profitability.
Ford has invested $2 billion in its Cologne plant to prepare it for EV production. After the first electric Explorer rolled off the assembly line in June, Ford added its second EV, the new Capri, last month.
The American automaker has significantly reduced its leadership in Germany this year. Earlier this month, Ford lost two members of its senior leadership team. We are now down to two of the nine directors earlier this year.
Electrek's Take
Ford's restructuring in Europe comes as EV leaders, such as China's BYD, continue to gain in the global auto market.
After dominating its home market, BYD and other Chinese EV makers are looking overseas to boost growth.
BYD is already the leading EV brand in key regions such as Southeast Asia and Central and South America, but expects sales to accelerate in the next few months. The EV giant opened its first production plant in Thailand earlier this year, with others planned for Hungary, Brazil, Mexico, Pakistan, and Turkey.
In accordance with BloombergBYD is fast approaching Ford in global delivery. While BYD is best known for its low-cost EVs, such as the Seagull, which start at less than $10,000 (69,800 yuan) in China, it is rapidly expanding into new segments such as pickup trucks, mid-size SUVs, and luxury models.
Ford CEO Jim Farley warned rivals earlier this year that if they fail to keep up with the Chinese, “20% to 30% of their revenue is at risk.”
“As the CEO of a company that had a problem competing with Japan and South Korea, we have to fix this problem,” said Farley.
While Ford's Model e EV unit is on track to lose between $5 billion and $5.5 billion this year, BYD recently reported a record $1.6 billion (RMB 11.6 billion) in Q3 revenue amid EV sales which is increasing. October was BYD's eighth consecutive month of record sales, with more than 500,000 passenger cars sold for the first time.
Ford is betting on small, affordable EVs to turn things around with its new low-cost platform. The first EV model powered by the platform, a new electric truck, will come out in 2027.
Can Ford turn things around? Or will it be too little too late? Let us know your thoughts in the comments below.
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