by BERLIN, Feb 14 (Reuters) – Ford (FN) plans to cut one in nine product development and management jobs across Europe as part of a global effort to cut costs and compete in the electric vehicle market, it said the US automaker on Tuesday.
A total of around 3,800 jobs will be cut, including 2,300 at the German sites in Cologne and Aachen, 1,300 in the UK and 200 in the rest of Europe, the company said, adding it intends to achieve the cuts through voluntary schemes.
The news comes as a blow to unions, who said in late January the worst-case scenario would be to shed 2,500 jobs in Europe in product development and a further 700 in administration.
Nevertheless, the car manufacturer has promised not to make any redundancies at its locations in Cologne or Aachen before the end of 2032 in order to relieve the employees, said works council chairman Benjamin Gruschka in a press conference.
“Employees know that the reduced model range will mean fewer jobs in the coming years. The exclusion of redundancies for operational reasons gives security – we don’t throw anyone out,” said Gruschka.
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Ford is spending $50 billion to electrify its lineup, moving to a leaner, higher-priced lineup to offset the rising cost of manufacturing electric cars.
Chief Financial Officer John Lawler warned in early February that the American automaker faces $5 billion higher costs this year and said the company will be “very aggressive” in reducing costs in its manufacturing and supply chain operations .
Lawler also said at the time that the productivity of engineers in Europe was 25-30% lower than it should be.
The US group will retain around 3,400 engineers in the region who will build on the core technology provided by their US counterparts and adapt it to European customers, said Martin Sander, head of European Passenger Electric Vehicle (EV) and head of Ford Germany , in a press conference.
Cuts in the UK, amounting to one in five of its workforce, will be made mainly at the automaker’s research center in Dunton, south-east England.
The cuts in Germany correspond to around 12% of the workforce there.
“There is significantly less work to be done on powertrains that come out of internal combustion engines. We are moving into a world with fewer global platforms, where less development work is required. That’s why we have to make the adjustments,” said Sander.
Nothing has changed in the automaker’s electrification strategy, Sander added, with the goal of offering a fully electric car range by 2030 and a fully electric fleet in Europe by 2035.
Ford is due to launch its first EV in Europe later this year, based on Volkswagen’s MEB platform in Cologne, and is considering bringing a Ford platform to Europe, possibly to its Valencia plant, Sander said.
Still, the Dearborn, Michigan-based company said last March that its EV business wouldn’t be profitable until next-generation models begin production in 2025.
Ford’s European workforce last saw a wave of job cuts in 2019 and 2020 as the automaker aimed for a 6% operating margin in the region, a target thrown off course by the pandemic, with pre-tax profit margins in Europe in the first nine months of 2022 only 2.2% of sales.
Reporting by Victoria Waldersee Editing by Kirsten Donovan and Mark Potter
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