Ford plans to axe 3,800 jobs in Europe and U.K. citing economic crisis and its push toward electric vehicles
The United States (U.S.) based carmaker – Ford has announced plans to axe 3,800 jobs across Europe and the United Kingdom (U.K.) over the next 3 years, citing difficult economic conditions and its major push toward electric vehicles.
Of the 3,800 jobs, 2,300 jobs will be axed in Germany, 1,300 in the U.K. and 200 across the remainder of Europe. The layoffs will be made in the company’s product development and administrative departments.
The cuts amount to about 11% of Ford’s staff in the region. The plan is part of the company’s efforts to create a leaner, more competitive cost structure for Ford in Europe. The company said it intends to achieve the job cuts through voluntary redundancies.
Ford plans to start production of its first European-made EV passenger car later this year, a key step toward turning its whole European fleet electric by 2035. In the U.K., most of the cuts will be at its research site at Dunton in Essex. Several hundred back-office posts are also expected to be closed at sites across the country. However, production sites at Halewood, Dagenham and Daventry will not be affected. The announcement comes less than 2 years after Ford closed its engine plant in Bridgend.
Speaking on the occasion, Chairman of Ford in Britain – Tim Slatter said, “Here in Europe we’ve got a pretty difficult economic situation, and the outlook is uncertain. High inflation, higher interest rates, the ongoing war in Ukraine, cost of energy and so on.”
By 2030, it expects all the cars it builds in the U.K. to be fully electric. Two out of three commercial vehicles will be either electric or plug-in hybrids by the same date. Ford also wants to reposition itself from being seen as a mass-market supplier of relatively cheap and everyday transport. Instead, it wants to develop a slimmer line-up of more exotic vehicles, which exploit evocative brand names, something it has already done with the Mustang Mach-E and the F-150 Lightning electric pick-up truck. Besides, it also wants to focus on its portfolio of commercial vehicles, the Transit.
It has already ceased production of the ‘Mondeo’ car. In June 2023, the final Fiesta will roll off the production line in Cologne in Germany. The one-time best-selling runabout is no longer considered viable to make, and there will be no direct successor.
Ford will invest some $ 50 billion (£ 41 billion) over the next few years for transitioning to electric vehicles. As part of this scheme, it has committed £ 380 million to transform its gearbox factory at Halewood on Merseyside in U.K. into a facility capable of producing hundreds of thousands of electric motors every year. It believes that as development of traditional petrol and diesel vehicles tails off, it will require fewer product development staff. While they may require sophisticated software, electric cars are mechanically pretty simple.
The European Head of Ford’s Electric Vehicles Division – Martin Sander said, “These are difficult decisions, not taken lightly. We recognize the uncertainty it creates for our team, and I assure them we will be offering them our full support in the months ahead.”
The past year has been difficult for European manufacturers. The cost of energy skyrocketed following Russia’s invasion of Ukraine, hitting an all-time high of € 338 ($ 363) per MW hour in August 2022. The prices of raw materials also shot up. Manufacturers were compelled to slash production, relocate parts of their operations outside Europe and lay off staff.
