The Dearborn, Michigan auto industry stalwart has just announced massive job cuts in Europe, primarily affecting the production of gasoline-powered cars.
Ford no longer bets on gasoline cars for its future.
In October, the Dearborn, Michigan automaker had announced the recall of the Ford Fiesta sedan, a model produced since 1976.
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“Time to say goodbye to the little car that has touched us all,” Ford of Europe tweeted on October 26. “As one era ends, another is just beginning, and we can’t wait to show you what’s to come.”
Production of the small compact will halt at the Cologne, Germany, plant in June. Marketed since 1976 and sold exclusively in Europe since 1996, the Fiesta has sold a total of 22 million units in 47 years.
Some 3,800 jobs will be eliminated
The Fiesta is one of the collateral victims of Ford’s new era designed by CEO Jim Farley. It is Ford’s participation in the electric revolution.
While the Blue Oval is careful not to upset American consumers, it depends on public environmental policies in Europe to make a radical shift toward electric vehicles.
The legacy automaker plans to sell 600,000 all-electric cars on the continent by 2026 before going 100% electric by 2035. And that means Ford is focusing on its zero-emissions future models by saying goodbye to parts of its current range.
Ford has stopped producing the Mondeo, while the Focus will no longer be sold in 2025. Production of the Ford S-Max and Ford Galaxy will end in 2024.
At the same time, the maker of the iconic F-150 truck/pickup is adapting its industrial tools. The Cologne plant will soon start producing a new electric SUV model designed in collaboration with German giant Volkswagen. (VWAGY) – Get a free report
Ford will use the MEB electric platform developed by the German automaker. This platform allows the assembly of several different car models on the same technical base. Last March, Ford pumped $2 billion into this site, where the first electric vehicles will roll off the production line later this year.
A reorganization of European factories was therefore expected, and has only just begun, with Ford cutting some 3,800 jobs in Europe, or nearly 11% of Ford’s workforce on the continent, to create “a structure of more efficient and competitive costs.
By 2025, Ford plans to downsize its European engineering footprint, which will result in 2,800 fewer jobs, the company said in a statement. statement. These changes are driven by the transition to all-electric powertrains and reduced vehicle complexity.
Ford will maintain an engineering organization of some 3,400 positions in Europe, focused on vehicle design and development, as well as creating connected services.
In addition, a lower cost structure will be created for Ford’s administrative, marketing, sales and distribution functions in Europe, which includes the elimination of 1,000 positions.
The company, which had 35,000 employees in Europe, said it will now consult with its social partners “with the intention of achieving the reductions through voluntary separation programmes.”
CEO Jim Farley speaks on February 15
In detail, around 2,300 jobs will be cut in Germany, 1,300 in the UK and 200 in the rest of Europe. The largest European factory is Cologne, where Ford employs almost 14,000 people.
“We are completely reinventing the Ford brand in Europe,” said Martin Sander, general manager of Ford Model e in Europe. “Paving the way to a sustainably profitable future for Ford in Europe requires broad-based action and change in the way we develop, build and sell Ford vehicles. This will have an impact on the organizational structure, talent and skills we will need in the future. .”
Notably, it is an official from Ford e, the Ford division in charge of electric vehicle development, who is commenting on the new job cuts. It’s a clear signal about the automaker’s priorities.
The size change to make way for electric vehicle development should come quickly as Ford is in talks with potential buyers of its German plant in Saarlouis, which employs nearly 4,600 people. This factory produces the Focus, which Ford will stop producing in 2025.
In the US, Ford also plans to cut costs and aims to save $3 billion annually.
Globally, the company is investing more than $50 billion in electric vehicles through 2026. Its goal is to catch up with Tesla, (TSLA) – Get a free reportwhich currently dominates the electric vehicle market.
With this in mind, Ford indicated on February 13 that it would continue to partner with Chinese supplier Contemporary Amperex Technology, or CATL, to build an electric vehicle battery factory, despite ongoing tensions between China and the US.
This factory, which will be based in Michigan, is estimated to cost $3.5 billion and employ about 2,500 people. It will be operational in 2026.
Farley and CFO John Lawler will discuss the company’s transformation plan on February 15 at the upcoming Wolfe Research 2023 Global Auto, Automotive Technology and Auto Consumer Conference in New York City.