Ford aims to save costs as the industry struggles with declining demand and is attempting to switch to electric vehicles.
Ford has announced that it plans to cut 4000 jobs in Europe and is the latest automaker to attempt cost-cutting measures due to the slow growth in electric vehicle sales and competition in China.
The US automaker announced that it would cut 800 jobs in the UK and 2900 in Germany, but this will not affect the operations in UK factories in Dagenham and Halewood.
The layoffs, around 14% of Ford or 28,000 employees in Europe, will be over by the end of 2027.
Ford aims to save costs as the industry struggles with declining demand and is attempting to switch to electric vehicles.
The company is also reducing its production of the new electric Explorer and Capri models due to the weak economic situation and lower demand for electric cars. Now, it is reducing production hours in the German plant after investing $2 billion to upgrade it to produce battery cars.
So many carmakers like Ford’s US, Japan’s Toyota, Sweden’s Volvo, and Bentley in the UK have announced that they are going to increase sales of hybrid cars, which combine smaller batteries with an internal combustion engine.
Ford claimed that European carmakers face significant economic and competitive challenges and deal with a mismatch between CO2 legislation and consumer demand for EVs.
The reduction will affect Europe’s product development and administrative areas, including government affairs, finance, and human resources.
Ford employs about 6500 people in the UK for the technical center where it develops the Transit van in Dunton, Essex, but has not specified where it would cut jobs in the UK.
While automakers have seen a decline in sales across their models, they are also frustrated with the regulations in the UK and EU that force them to sell more battery cars. Representatives from Ford, Volkswagen, Nissan, and Tesla met the UK Transport Secretary Louise Haigh and Business Secretary Jonathan Reynolds to discuss automotive industry policies.
In the discussion, automakers asked for more flexibility on the UK zero-emission vehicle (ZEV), which forced them to sell an increasing proportion of EVs annually. Some carmakers want the government to allow them to sell more hybrids in the upcoming years when the target for EV sales would be difficult to meet.
A transport department spokesperson said that the government realized the challenges faced in the industry and will work to transit to electric vehicles by 2030. The government has allowed the possibility of making changes to rules to ensure that they don’t restrict economic growth.
Peter Godsell, a vice president of Ford in Europe, states that the ZEV mandate in the UK is challenging, and the market conditions are so unstable that it is making it not feasible to work.
Manufacturers are very vocal about disapproving of the rules. But The charger company and fleet owners argue that changing the rules would jeopardize billions of pounds of investments.
John Lawler, Ford’s chief financial officer, stated that automakers need the government to improve the market conditions in Europe.
Manufacturers in Europe and Germany need a clear policy agenda to promote e-mobility, such as public investments in charging infrastructure, incentives to encourage the switch to EV, increased flexibility to meet the CO2 compliance target, and improved cost competitiveness.
Globally, this cut in the European workforce will impact 2.3% of 174000 employees at Ford.
Early last year, the company laid off around 1300 employees in the UK as a bigger plan to cut 3800 jobs in Europe due to rising costs and the need to switch from petrol and diesel engines to EVs.
This layoff will affect the UK workers and their families. Even though Ford did it for commercial reasons, they will still publish a full plan explaining their intentions to reduce the impact in the UK.