Europe: Ford has announced its intention to eliminate 3,800 positions in product development and administration across Europe over the next three years. The reason for “Ford Europe Layoffs” is increased costs and a desire for a more streamlined structure to accommodate the shift to electric vehicles.
The plan will result in the loss of approximately 2,300 positions in Germany (at the Cologne and Aachen sites), 1,300 in the UK, and 200 in the rest of Europe. The company aims to execute these cuts through voluntary programs.
Unions have expressed disappointment over the announcement, as they had previously estimated a maximum of 2,500 job losses in product development and 700 in administration across Europe.
What company said on “Ford Europe Job Cuts”?
In a statement, Ford explained that the cuts were necessary to revitalize its business in Europe.
In a recent results call, Ford indicated a need for further cost reductions. CFO John Lawler stated that the company plans to reduce manufacturing and supply chain operations expenses aggressively.
During the same results call, Lawler stated that the productivity of engineers in Europe is currently 25-30% below the expected level.
According to Martin Sander, the head of Ford Germany and the company’s European passenger EV chief, Ford will keep roughly 3,400 engineers in the region to leverage their U.S. counterparts’ core technology and tailor it to European customers. Sander shared this information during a press call.
What Martin Sander (Ford’s Germany Head) says on “Ford Europe Layoffs”?
Sander explained that as the automotive industry shifts away from combustion engines, there will be less engineering work required for drivetrains. Additionally, with fewer global platforms, there will be less need for engineering work overall. This is why the company needs to make adjustments.
Sander confirmed that the carmaker’s electric vehicle strategy remains unchanged, and they still plan to have an all-electric fleet available in Europe by 2035.
According to Sander, Ford intends to launch its first electric vehicle in Europe later this year using Volkswagen’s MEB platform in Cologne. The company is also exploring the possibility of bringing a Ford platform to Europe, potentially to the Valencia plant.
“Our goal is to ready our organization to thrive and emerge victorious in a region that is currently grappling with severe economic and geopolitical challenges,” Sander said.
In order to achieve a 6% operating margin in the region, Ford’s European workforce experienced a round of job cuts in 2019 and 2020. However, the pandemic disrupted this objective, and the company’s pre-tax profit margins for the first nine months of 2022 in Europe only reached 2.2% of sales.
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