Ford to lay off 14% of European employees due to weak demand for electric vehicles and fierce competition from China

Ford Motor Co. decided to lay off 14% of its European workforce on Wednesday, November 20, due to weak electric vehicle (EV) demand, weak government support for the transition to electric vehicles and fierce competition from subsidized Chinese rivals, the news agency reported. Reuters.

The car company said it would cut 4,000 jobs, or nearly 2.3% of its 174,000-strong workforce, mainly in Germany and the United Kingdom. Ford is the latest among companies including Nissan, Stellantis and General Motors to cut costs as the industry faces challenges such as electric vehicles being too expensive for consumers to buy.

Ford shares fell 1.8% after the agency’s report, which would be a heavy blow for Germany, with Volkswagen, Europe’s largest automaker, threatening to close factories, cut wages and cut thousands of jobs to allow it to Compete better. Report.

Ford is trying to reduce costs in its global operations while also lagging behind General Motors in the U.S. market. Ford has been grappling with quality, warranty and supplier issues.

The company said the job cuts will take place before the end of 2027, pending union discussions. According to reports, Ford said it would cut 2,900 vehicles in Germany and 800 in the United Kingdom, and that production of the Explorer and Capri EV models at the Cologne plant would also be reduced.

Peter Goldsell, vice president of Ford Motor Europe, said the company’s “demand for electric vehicles is weaker than we previously forecast and our operating costs remain challenging.”

Ford needs to “take decisive action to restructure our business,” the agency reported, adding that while the company hopes the layoffs will resolve its issues, he cannot rule out further steps if market conditions worsen.

About Ford’s performance

Ford’s sales in Europe fell 17.9%, much higher than the industry-wide decline of 6.1%.

German unions said they would not accept the plans because there were alternatives and asked Ford’s European management to negotiate on the future of the business.

Knut Giesler, head of the German union branch of IG Metall in the state of North Rhine-Westphalia, where Ford’s main Cologne plant is located, told the agency: “If there is no will to do this, we also Get ready for a tough fight.”

The company has asked the German government for more incentives and better charging infrastructure to help consumers transition to electric vehicles.

Berlin ends electric car subsidies in December 2023. In the first nine months of this year, German electric car sales fell by 28.6%.

Ford’s CFO said: “What we lack in Europe and Germany is a clear, unambiguous policy agenda to advance electric vehicles, such as public investment in charging infrastructure, meaningful incentives… greater flexibility,” the news agency quoted John Lawler as writing to the German government.

The European Union has imposed tariffs on Chinese-made electric cars, saying they benefit from unfair government subsidies.

Markus Wassenberg, managing director of Ford Germany, said the move reflected ongoing changes, noting in particular Germany’s high labor and energy costs. All German job cuts will occur at Ford’s main Cologne plant, which accounts for 24% of the plant’s workforce, according to the agency’s report.