FRANKFURT – Ford Motor Co. says it will reduce its workforce by 4,000 in Europe and the U.K. by the end of 2027, citing headwinds from the economy and pressure from increased competition and weaker than expected sales of electric cars.
Ford said Wednesday most of the job cuts would come in Germany and would be carried out in consultation with employee representatives.
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Of the total, 2,900 jobs would be lost in Germany, 800 in Britain and 300 in other European Union countries. Ford has 28,000 employees in Europe, and 174,000 worldwide.
“The global auto industry continues to be in a period of significant disruption as it shifts to electrified mobility,” the company said in a statement. “The transformation is particularly intense in Europe where automakers face significant competitive and economic headwinds while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles,” the statement said.
In Europe, automakers must sell enough electric vehicles to meet new, lower limits for fleet average carbon dioxide emissions in 2025, and face a longer term 2035 EU goal of reducing emissions to zero, which would mean the elimination of most vehicles with internal combustion engines.
EV sales however have lagged as consumers weary of inflation have held back on spending and after major car market Germany dropped government purchase incentives for EVs. Electric vehicles sales fell by 5.8% in the first nine months of the year in an overall shrinking market for cars. Carmakers are also facing increasing competition from Chinese-made electric vehicles.
The company said that it would also reduce working time for workers at its Cologne, Germany plant where it makes the Capri and Explorer electric vehicles.
Ford sales fell 15.3% in the first nine months of the year compared to the same period last year, according to the European Automobile Manufacturers' Association. The company's market share shrank to 3% from 3.5% The Dearborn, Michigan, headquartered automaker saw company-wide net profit fall by 26% to $892 million in the third quarter as it took $1 billion in accounting charges to write down assets for a canceled three-row electric SUV. The company cited higher warranty and other costs.
Ford is an established brand in Europe and will mark its 100th anniversary of doing business in Germany next year. Its main plant in Cologne started production in 1931; the groundbreaking was attended by Henry Ford and then-Mayor Konrad Adenauer, later Germany’s chancellor.
Ford is not alone in suffering from headwinds. Volkswagen has said it is contemplating closing as many as three of its German plants, according to its chief employee representative. European Automobile Manufacturers’ Association has called for a speedier review of lower C02 limits slated for 2026.
Ford said company vice chairman and CFO John Lawler had written a letter to the German government reiterating Ford's commitment to climate goals but urging action to improve market conditions and ensuring the industry’s future success.
"What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility, such as public investments in charging infrastructure, meaningful incentives to help consumers make the shift to electrified vehicles, improving cost competitiveness for manufacturers, and greater flexibility in meeting CO2 compliance targets,” Lawler said.