BERLIN—Ford plans to cut one in nine jobs in Europe, axing 3,800 roles in product development and administration as part of a drive to lower costs in the region and concentrate engineering know-how in the United States, the automaker said on Tuesday
The U.S. carmaker leads the European market for commercial vans, but has struggled to make strong profits from passenger cars, and warned this month it would be “very aggressive” in reducing manufacturing and supply chain expenses this year.
CEO Jim Farley has repeatedly flagged that electric vehicle (EV) production would require less labor and significant cost cutting to remain competitive.
“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,” European passenger EV chief Martin Sander said on Tuesday.
Around 2,300 jobs will go at Ford’s Cologne and Aachen sites in Germany, 1,300 in the UK, and 200 in the rest of Europe, the company said, adding it intended to achieve the reductions through voluntary programs.
The news comes as a blow to unions who said in late January the worst-case scenario was 2,500 job cuts in Europe in product development and a further 700 in administration.
Still, the carmaker agreed to no compulsory redundancies at its Cologne or Aachen sites before the end of 2032, providing some relief to workers, works council chair Benjamin Gruschka said on a press call.
“Workers know that the reduced model palette in coming years means fewer jobs. The exclusion of operational redundancies provides safety—we are not kicking anyone out,” Gruschka said.
Ford will retain around 3,400 engineers in the region who will build on core technology provided by their U.S. counterparts and adapt it to European customers, European passenger EV chief and head of Ford Germany Martin Sander said on a press call.
Cuts in the UK, which amount to one in five of the workforce there, will be mostly at the carmaker’s research center in Dunton, southeast England.
The cuts in Germany equate to around 12 percent of the workforce there.
Meanwhile, the company announced on Monday plans to invest $3.5 billion in a battery factory in Michigan, adding 2,500 jobs.
Ford’s European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6 percent operating margin in the region, a goal thrown off course by the pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2 percent of sales.
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