Ford Motor to lay off 14% of Europe employees amid weak EV demand and tough Chinese competition | Company Business News

Ford Motor Co. has decided to lay off 14 per cent of its Europe workforce on Wednesday, November 20, amid weak electric vehicle (EV) demand, poor government support for the EV shift and tough competition from subsidized Chinese rivals, reported the news agency Reuters.

The auto company said that it will cut 4,000 jobs, nearly 2.3 per cent of its total workforce of 174,000, primarily in Germany and Britain. Ford is the latest amongst other companies like Nissan, Stellantis, and GM to reduce costs as the industry faces challenges like EVs being too expensive for consumers to buy. 

Ford shares fell 1.8 per cent after the agency’s report, which will be a big blow in Germany, where Europe’s biggest carmaker, Volkswagen, is threatening to close factories, cut wages and axe thousands of jobs to allow it to compete better, as per the report.

Ford is fighting to reduce its global business costs while also lagging in the US markets to GM. Ford has struggled to deal with its quality, warranty, and supplier issues.

The company said the layoffs would happen by the end of 2027, pending union discussions. Ford said 2,900 cuts would be in Germany and 800 in Britain, and production of its Explorer and Capri EV models at its Cologne plant would also be reduced, as per the report. 

The company has been experiencing “weaker demand for electric vehicles than we had previously forecast and we continue to have challenges around our operating costs,” said Peter Godsell, vice president of Ford Motor Europe.

Ford needs “decisive action to restructure our business,” he said, adding that while the company hoped the job cuts would address its problems, he could not rule out further measures if market conditions worsen, reported the agency.

About Ford’s Performance

Ford’s sales in Europe dropped 17.9 per cent, significantly more than an industry-wide fall of 6.1 per cent.

The German unions said they would not accept the plans as there were alternatives and asked Ford’s Europe management to enter talks over the future of the business.

“If there is no willingness to do so, we are also prepared for a tough confrontation,” Knut Giesler of IG Metall, who runs the German union’s branch in the state of North Rhine-Westphalia, home to Ford’s major Cologne plant told the agency. 

The company has asked the German government to provide more incentives and better-charging infrastructure to help consumers transition to EVs. 

Berlin ended EV subsidies in December 2023. EV sales in Germany in the first nine months of this year were down 28.6 per cent.

“What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility, such as public investments in charging infrastructure, meaningful incentives … and greater flexibility in meeting CO2 compliance targets,” according to Ford’s chief financial officer John Lawler letter to the German government cited by the news agency.

The European Union has slapped tariffs on Chinese-made EVs, saying they benefit from unfair government subsidies.

Marcus Wassenberg, managing director at Ford’s German division, said the move reflected ongoing changes and singled out Germany for its high labour and energy costs. All the German job cuts would be at Ford’s main site in Cologne which marks 24 per cent of the factory’s workforce, as per the agency report.