Ford Cutting One in Nine Jobs in Europe

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Facts

  • US automaker Ford said Tuesday it plans to cut thousands of jobs across Europe over the next three years as part of a global effort to reduce costs and be competitive in the electric vehicle market.1
  • Ford plans to cut one in nine jobs, approximately 3.8k jobs total, including 2.3k at the carmaker's Cologne and Aachen sites in Germany, 1.3k in the UK, and 200 in the rest of Europe. The company plans to achieve reductions through voluntary programs.2
  • These numbers are higher than unions — which previously said the worst-case scenario would involve 2.5k job cuts in Europe in product development and another 700 in administrative positions —  had forecast.3
  • Currently, Ford employs approximately 34K people in Europe. The automaker plans to offer an all-electric fleet by 2035 and expects production of its first European-built electric passenger vehicle to start later this year.4
  • The planned cuts account for roughly 40% of its European product development staff, in line with CEO Jim Farley’s prediction that the company can successfully develop battery-powered models with a smaller workforce.5
  • Many companies in the global auto industry are reducing their workforces and cutting costs while shifting their focus to electric vehicles. This transition has largely been prompted by government efforts to reduce carbon emissions, causing competition among automakers.6

Sources: 1Al Jazeera, 2Reuters, 3Us news & world report, 4CNBC, 5The irish times and 6Washington Post.

Narratives

  • Narrative A, as provided by CNBC. The competition in the EV market is stiff, and after a brutal fourth quarter, Ford needs to make some painful changes. Ford isn’t just cutting jobs; it’s restructuring how it operates in an attempt to turn things around and be successful in the long term, in addition to the short term.
  • Narrative B, as provided by International business times. German trade unions can't tolerate these types of job cuts, and they’ve sounded a warning to Ford not to go through with them. If talks with Ford fail, however, the unions can — and likely will — bring Europe-wide disruptions that will seriously impact the company.

Predictions