Ford Europe announced Tuesday plans to slash 3,800 hourly and salaried jobs in Europe over three years, eliminating mostly people who work in product development, as the automaker pivots from gas-powered to all-electric vehicles.
This is the latest move that reflects Ford’s talent transition from internal combustion engines to electric vehicles and technology. In the near term, gas-powered vehicles subsidize electric vehicles that are not yet profitable.
This announcement follows a grim 2022 earnings report where Ford CEO Jim Farley vowed to dramatically cut costs to shore up a healthy checkbook needed to fund the future aspirations of the 120-year-old automaker.
Ford said it had an estimated 35,000 workers in Europe currently and 173,000 globally at the end of 2022. Ford is hoping to achieve its job reductions through voluntary separations, the company said.
“By 2025, Ford plans to resize its European engineering footprint, resulting in 2,800 fewer jobs,” the release said. “These changes are driven by the transition to fully electric powertrains and reduced vehicle complexity. Ford will maintain an engineering organization of approximately 3,400 roles in Europe, focused on vehicle design and development, as well as the creation of connected services.”
Germany is slated to lose 1,700 people in product development and 600 in administrative roles, while the United Kingdom will see cuts of 1,000 and 300, respectively. Other parts of Europe will cut 200 jobs evenly divided between product development and administrative roles.
The company declined to reveal to the Detroit Free Press potential cost savings related to the cuts at this time.
This latest restructuring impacts both white-collar and blue-collar jobs, Ford said. The plan does not include joint venture projects or partnerships at this time.
‘Sweet spot’
While Ford has planned to tighten up operations outside North America, the effort to create a leaner Ford Europe accelerated with the economic changes globally, material costs, geopolitical headwinds and intense competition. The changes are intended to make Ford more competitive overall with a new vehicle lineup inspired by Ford’s heritage and a new strategy to market, distribute and sell products, Ford said.
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“I think we’ll really hit a sweet spot in the European market,” Ford Europe spokeswoman Elvira Schachermeier told the Free Press from Cologne, Germany.
Ford is scheduled to offer an all-electric fleet of vehicles in Europe by 2035, a timeline that’s unchanged.
“We are completely reinventing the Ford brand in Europe. Unapologetically American, outstanding design and connected services that will differentiate Ford and delight our customers in Europe,” Martin Sander, general manager of Ford Model e in Europe, said in a news release. “We are ready to compete and win in Europe. Our first European-built electric passenger vehicle is being introduced this spring and will surely turn heads.”
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Job cuts are “not taken lightly,” Sander said. “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.”Ford Europe will continue to invest in the design and development of electric passenger vehicles, the company said.
Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid