Ford to cut 4,000 jobs in Europe as falling electric vehicle sales, subsidies to Chinese rivals and insufficient government standards pose obstacles

Ford Motor Co. has announced plans to reduce its European workforce by 14% by the end of 2027, cutting 4,000 jobs as the electric vehicle (EV) market faces growing challenges. The move comes amid weak sales, stiff competition from Chinese automakers that receive subsidies and what Ford says is a lack of government support for electric vehicle adoption, The Associated Press reported.

The layoffs will mainly affect Germany and the United Kingdom, where Ford will cut 2,900 and 800 jobs respectively. An additional 300 jobs will be cut in other European countries. The automaker, which employs 174,000 people globally and 28,000 in Europe, stressed that the job cuts would be implemented in consultation with employee representatives, the report added.

“The global auto industry continues to be in a period of severe disruption as it transitions to electric vehicles,” the company said in a statement. “The transition is particularly intense in Europe, where automakers face significant competition,” the Associated Press quoted the statement as saying. and economic headwinds, while also addressing the inconsistency between CO2 emissions regulations and consumer demand for electric vehicles.”

ford sales

The company’s sales figures reflect the challenges it faces. Ford’s sales in Europe plunged 17.9% in the first nine months of 2023, in sharp contrast to the overall industry decline of 6.1%. Ford’s market share will shrink to 3% from 3.5% in 2022 as it struggles to compete with low-cost electric vehicles produced by Chinese automakers.

Germany, Ford’s main market, saw electric vehicle sales plummet 28.6% during the same period. The country ended subsidies for electric vehicles in December 2022, further complicating the automaker’s transition.

In response, Ford urged the German government to take decisive action. In a letter, Ford Chief Financial Officer John Lawler called for “clear policy measures” to support the adoption of electric vehicles, including investments in charging infrastructure and incentives for consumers, according to the Associated Press.

The layoffs come as Ford also scales back production at its Cologne plant, which makes the Explorer and Capri electric vehicles. The company will also reduce hours for employees at the plant.

Ford’s woes are consistent with broader challenges in the European auto industry. Tough European Union regulations require carmakers to reduce carbon emissions across their entire fleets by 2025 and phase out most internal combustion engine vehicles by 2035, accelerating the transition to electrification. However, high inflation and inadequate infrastructure have slowed consumer adoption of EVs.

Another major player, Volkswagen, has also hinted at possible plant closures in Germany, signaling broader concerns within the industry.

Ford will celebrate 100 years of operations in Germany next year and remains committed to the European market. However, the company’s latest actions highlight the urgent need for greater government and industry collaboration to guide the transition to electric vehicles.

(With information from AP, Reuters)