Ford has announced that one in nine of its European employees will be cut, following the company’s aggressive electrification plan.
Earlier this year, German union representatives first sounded the alarm about possible job cuts from Ford Europe, estimating roughly 2,500 employees would be cut on the continent, with the majority coming from Ford’s Cologne facility. This turns out to have been a severe underestimation as Ford announced it would cut 3,800 jobs from the continent, mainly from Germany and the United Kingdom.
According to Reuters, of the 3,800 jobs being cut, 2,300 are coming from the German plants in Cologne and Aachen, 1,300 are coming from Ford U.K., while the last 200 are coming from the rest of the continent.
Ford has long warned that its $50 billion electrification plan was likely to come at the expense of jobs, especially outside its home market of North America. This was not only due to the shrinking number of employees needed to build electric components compared to gas vehicle parts but also because of Ford’s plan to slim its model line as it moves towards 100% EV production in Europe and eventually in North America.
“There is significantly less work to be done on drivetrains moving out of combustion engines. We are moving into a world with less global platforms where less engineering work is necessary. This is why we have to make the adjustments,” said the Head of Ford Germany, Martin Sander.
Ford CFO John Lawler also noted that, despite the continuing investment, Ford engineers in Europe were roughly 25-30% less productive than their benchmark.
The CFO’s finding likely contributes to Ford’s choice to move jobs to North America. According to Ford’s battery production announcement yesterday in Michigan, Ford is establishing ten new facilities in the United States, including battery production, parts production, and assembly factories.
With Ford’s electrification plan being so expensive and so aggressive, there is no wonder why the company is looking to cut weight. Hopefully, these job cuts can be done less frequently as automakers globally continue to electrify. Thanks to the ever-growing demand for EVs, these jobs may even return in the coming years.
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