Ford Motor Co. will dismiss some 11% of its workforce in Europe as the US carmaker cuts costs in the latest sign of industrial disruption caused by the automotive sector’s shift to electric vehicles.
Of the total 3,800 jobs to go, workers in Germany and the UK will be hardest-hit with about 2,300 and 1,300 positions to be eliminated respectively over the next three years, Ford said Tuesday. Germany’s IG Metall last month estimated around 3,200 people would lose their jobs.
“Electric vehicles are much less complex,” Martin Sander, general manager of Ford’s electric-vehicle business in Europe, said in an interview with Bloomberg Television. “The whole industry is going to get significantly leaner than it was in the past.”
Ford is shifting its model lineup in Europe to battery-only by 2035 and has previously said that the reduced time and effort to develop and make electric cars would lead to smaller product-development teams. The company is also trimming jobs in the US as Chief Executive Officer Jim Farley targets more than $3 billion in annualized savings while investing more than $50 billion in EVs through 2026.
The company, with about 173,000 employees globally, had some 35,000 positions in Europe as of the end of last year, with Cologne its biggest plant with 14,000 workers. In the UK, the company has roughly 7,000 direct employees across three main sites. The company intends to make the reductions through voluntary agreements, it said Tuesday.
The US manufacturer’s confirmation of further cuts at its European business add to a lengthy period of decline in the market. Years of restructuring have seen the sale or closure of a number of factories amid broad job cuts. Its passenger car market share last year was 4.4% with sales totaling just over 510,000 cars, according to the European Automobile Manufacturers’ Association.
“The region was barely profitable in 2022 and has lost money in three of the last five years,” Michael Ward, an analyst at Benchmark Co., said in a report, noting restructurings in Europe are generally tough and costly owing to government and union approvals. “We view the actions as necessary and positive.”
The analyst estimates the elimination of 3,800 jobs will cost the company at least $4 billion over the next three years. Ford fell 1.2% in early trading in New York, taking declines over the past year to 23%.
Ford is likely to cut even further in the coming years, with its plant in Saarlouis, Germany, that employs 4,600 workers slated to cease making Focus compact cars by 2025. The company has no plans to produce other vehicles there after that and is in talks with potential buyers of the plant, including China’s BYD Co., according to people familiar with the matter.