Ford has announced that it plans to cut 3,800 jobs across Europe in product development and administration over the next three years. Rising costs and the need for a leaner structure to support the production of electric vehicles were cited as reasons for the cuts. The reductions will be achieved through voluntary programmes, and around 2,300 jobs will go at the carmaker’s Cologne and Aachen sites in Germany, 1,300 in the UK, and 200 in the rest of Europe. Unions had previously warned of a worst-case scenario of 2,500 job cuts in product development and 700 in administration.
The company has said that the cuts are needed to “revitalise business in Europe”. It has also signalled that further cost cutting will be necessary, with Chief Financial Officer John Lawler stating that Ford will be “very aggressive” in reducing expenses in manufacturing and supply chain operations. Lawler also noted that productivity of engineers in Europe is currently 25-30% lower than it should be.
Despite the job cuts, Ford plans to retain around 3,400 engineers in the region who will build on core technology provided by their US counterparts and adapt it to European customers. European passenger electric vehicle chief and head of Ford Germany, Martin Sander, has said that “there is significantly less work to be done on drivetrains moving out of combustion engines” and that “we are moving into a world with less global platforms where less engineering work is necessary”. He added that this was the reason for the adjustments.
Sander also stated that nothing has changed in the carmaker’s electrification strategy, with the goal of offering an all-electric fleet in Europe by 2035 still in place. Ford is due to launch its first electric vehicle in Europe, built on Volkswagen’s MEB platform, in Cologne later this year. The company is also considering bringing a Ford platform to Europe, possibly to its plant in Valencia.
The latest job cuts are a blow to Ford’s European staff, who saw a wave of cuts in 2019 and 2020 as the carmaker pursued a 6% operating margin in the region. This goal was thrown off course by the pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales. Despite the difficult economic and geopolitical headwinds, Sander has said that Ford is “preparing our organisation to compete and win in a region facing unprecedented” challenges.