Ford To Cut 11% Of Its European Workforce In EV Push
In a shocking and dismal turn of events, Ford has announced its plans to cut 3,800 jobs in Europe due to the tumultuous economic climate and its strong inclination towards electric vehicles (EV). The announcement came on Tuesday, stating that 2,300 jobs would be axed in Germany, 1,300 in the United Kingdom, and 200 scattered throughout the rest of Europe over the next three years. This decision will impact the company's product development and administrative departments, with the cuts accounting for approximately 11% of Ford's staff in the region.
Ford stated that the move is part of its strategy to establish "a leaner, more competitive cost structure for Ford in Europe," with the job cuts planned to be achieved through voluntary redundancies. This tough call has been primarily influenced by Ford's shift towards electric vehicles, as well as a reduction in "vehicle complexity." The veteran automaker aims to launch its first European-made EV passenger car later this year, marking a significant step towards its goal of transitioning its entire European fleet to electric by 2035.
"The uncertainty it creates for our team is not lost on us, and we understand that these are difficult decisions, not taken lightly. I assure them we will be offering them our full support in the months ahead," said Martin Sander, general manager of Ford Model e in Europe.
According to a Ford spokesperson, the job cuts were also brought on by "unprecedented economic and geopolitical headwinds" in the region. European manufacturers have had a tough year, with the cost of energy skyrocketing after Russia's invasion of Ukraine in February of last year, reaching a record high of €338 (around Ksh.48,329) per megawatt-hour in August. The costs of raw materials have also soared, burdening producers and leading some to cut production, relocate parts of their operations outside Europe, and lay off staff.
Although inflation in energy prices has slowed down in recent months, the European Central Bank has promised to "stay the course" and hike interest rates to bring down high inflation in consumer prices, which could impede economic growth in the 19 countries that use the euro, according to Berenberg bank.