The American automaker says the cost-cutting measure will help it compete with Chinese rivals.
Ford Motor Co. said it would cut 4,000 jobs in Europe as the company grapples with slowing demand for electric vehicles and growing competition from Chinese companies. The automaker announced that the workforce reduction, which will take place until the end of 2027, is part of a broader reorganization plan aimed at strengthening the European business. The downsizing mainly affects the German and British plants. Ford added that it will reduce production of the electric version of the Explorer sports car in the first quarter of 2025, which will mean shortened shifts at the Cologne plant.
The company said it is committed to building a thriving business in Europe. “It is critical that we take difficult but decisive steps to ensure Ford’s future competitiveness in Europe,” Dave Johnston, Ford’s European vice president of transformation and partnerships, said in the statement.
The automotive industry is trying to navigate the turbulent transition to electric vehicles. The growth rate of electric car sales has slowed down in several European countries this year. Ford has also struggled to sell as many battery-powered models as it had hoped in the United States, and said in August that it would reduce the pace of investment in such vehicles. Other automakers, including Volkswagen and Mercedes-Benz, have also changed their strategy after selling fewer battery-powered vehicles than expected. According to the Association of European Automobile Manufacturers, sales of electric cars in the 27 member states of the European Union fell by 5.8 percent in the first nine months of the year.
In addition, automakers face strong competition from Chinese companies such as BYD and Geely, which have made inroads into our continent with relatively affordable electric and hybrid vehicles. Volkswagen reported a 42 percent drop in profits in the third quarter and is considering closing up to three car plants in Germany, the first such move in the company’s 87-year history in its home country.
Ford called on industry leaders, policymakers, union officials and others in Europe to work together to smooth the industry’s bumpy transition. Last month, the European Union voted to raise tariffs on imported electric vehicles made in China by up to 45 percent. Some Chinese automakers have responded by teaming up with European companies to produce electric vehicles locally or build their own factories there.
China responded to the increased tariffs by imposing temporary sanctions on brandy from Europe and warning of possible tariffs on other European goods. Rising trade tensions between China and the European Union have prompted some companies to rethink their business strategies. Hennessy, which belongs to the LVMH conglomerate, is considering bottling its products in China in order to avoid higher costs, but the workers of the company’s factory in southwestern France are already on strike because of the plan.
Source: sg.hu
