Ford Motor Company will reduce its UK workforce by approximately 800 positions over the next three years. This action aligns with a broader European restructuring initiative targeting 4,000 job cuts by 2027 to enhance operational efficiency.
The Detroit automaker revealed that Germany will be hardest hit by the job cuts, with a staggering 2,900 roles on the chopping block. Other European markets will face only minor reductions. The job reductions will predominantly impact employees in administrative, support, and product development functions. Additionally, a limited number of manufacturing roles will be eliminated.
Carmaker Cuts Workforce Amidst European Restructuring
The announcement follows a decline in European EV sales, driven by intense Chinese competition and growing consumer concerns about electric car ownership.
Ford Motor Company will implement a restructuring plan that will result in a 15 percent reduction of its 5,300-person UK workforce. The company has clarified that these changes will not affect its Dagenham and Halewood power unit plants and the Southampton logistics base.
However, six other UK sites, including the crucial Dunton R&D centre and the massive Daventry parts distribution hub, may also face job cuts, according to a report by DailyMail.com. Ford admitted that its European passenger vehicle business has suffered substantial losses in recent years, exacerbated by the disruptive shift to electric vehicles and intensified competition.
Job Cuts And Market Turmoil
"Making this announcement isn't something that anybody wants to do, and I appreciate it will have a very significant impact on our employees," Lisa Brankin, managing director of Ford Britain and Ireland, said in a statement.
"It's not the news anyone wants to hear at any time. So our aim is to try to deliver this through voluntary redundancy," she added. Ford's Dagenham plant in Essex produces diesel engines for vans, while Halewood builds gearboxes.
Ford is considering opening a massive new electric vehicle motor facility. The company is shifting away from mass-market petrol cars like the Fiesta to a more premium, electric-focused brand.
However, Ford's transformation has been fraught with challenges, with the latest job cuts coming just 20 months after a previous round of 1,300 layoffs.
A Broader Industry Struggle
Ford is not alone in its European struggles, as Volkswagen, Mercedes-Benz, and BMW have also witnessed significant profit declines this year. These brands grapple with soaring energy costs, sluggish EV demand, and intense competition from Chinese automakers.
In light of these challenges, Volkswagen is exploring the possibility of implementing significant operational adjustments, including potential factory closures in Germany. "We are proud of our new product portfolio for Europe and committed to building a thriving business in Europe for generations to come," said Dave Johnston, Ford's European vice president for transformation and partnerships.
"It is critical to take difficult but decisive action to ensure Ford's future competitiveness in Europe," Johnston added. Ford is forced to slash jobs as the government pushes for stricter EV mandates. The 22 percent ZEV mandate, introduced last year, is proving to be a major headache for many automakers.
Automakers Scramble To Meet ZEV Targets
Despite these flexible rules, automakers still struggle to meet the ZEV mandate. If they fail to meet quotas, manufacturers could face hefty fines of up to £15,000 per car. Despite these challenges, the ZEV mandate will rise to 28 percent next year, 33 percent in 2026, and 80 percent by 2030.
Manufacturers warn that the rapid acceleration of the ZEV mandate, coupled with sluggish EV demand, is forcing them to offer unsustainable discounts to meet targets. However, Vicky Read, CEO of Charge UK, believes weakening the ZEV mandate would be a mistake.
"The government must hold its nerve and use the meeting to signal support for a policy that is evidently working," she explained.
