Ford to slash 14% of European workforce

LONDON

Ford Motor Company has announced a substantial restructuring of its European operations, revealing plans to eliminate approximately 14% of its workforce in the region, primarily targeting positions in Germany and the United Kingdom. The decision underscores the profound challenges facing traditional automotive manufacturers as they navigate the complex transition to electric vehicle (EV) production.

The job cuts, affecting approximately 4,000 employees, represent approximately 2.3% of Ford's global workforce of 174,000. This strategic move comes in response to significant market challenges, including weak electric vehicle demand, insufficient government support, and intensifying competition from emerging automotive manufacturers.

The announcement highlights the broader industrial transformation occurring in Europe's automotive sector. Ford's sales in the region have declined dramatically, with a 17.9% drop through September, significantly outpacing the industry-wide decline of 6.1%. This performance reflects the mounting pressures facing traditional automakers in an increasingly competitive and technologically demanding market.

European governments, particularly Germany, have been criticised for their inconsistent approach to electric vehicle transition. Berlin's decision to terminate EV subsidies in December 2023 has substantially impacted market dynamics, with German EV sales plummeting by 28.6% in the first nine months of the year. Ford's chief financial officer, John Lawler, explicitly called for more comprehensive policy support, emphasising the need for public investments in charging infrastructure and meaningful incentives.

The restructuring is part of Ford's ongoing painful transformation in the European market. The company had previously announced 3,800 job cuts in February 2023 and is proceeding with the closure of its Saarlouis plant in Germany, further demonstrating the scale of its strategic realignment.

This move mirrors similar actions by other automotive manufacturers, including Nissan, Stellantis, and General Motors, who are also grappling with the complex challenges of electric vehicle market transition. The industry is simultaneously contending with growing competition from Chinese rivals, waning demand in traditional markets, and the economic complexities of developing affordable electric vehicle technologies.

The European Union has attempted to mitigate some competitive pressures by imposing tariffs on Chinese-made electric vehicles, arguing that these manufacturers benefit from unfair government subsidies. However, the fundamental challenges of technological transition and market adaptation remain significant.

Ford's restructuring reflects a broader industrial recalibration, where traditional automotive manufacturers must rapidly innovate and transform their operational models to remain competitive in an increasingly electrified and technologically sophisticated market landscape.

The job cuts are expected to be implemented by the end of 2027, providing a structured approach to workforce reduction that allows for managed transition and potential retraining opportunities.