Ford Motor Co. will reduce its European workforce by 4,000 employees by the end of 2027, citing economic pressures, weaker-than-expected electric vehicle (EV) sales, and growing competition in the EV market, AAP reported.
The restructuring will primarily affect jobs in Germany and the United Kingdom, with a smaller impact across other European Union countries.
The automaker announced on Wednesday that 2,900 jobs will be cut in Germany, 800 in the UK, and 300 elsewhere in Europe. The reductions will be conducted in consultation with employee representatives. Ford currently employs 28,000 people across Europe and 174,000 worldwide.
Ford attributed the job cuts to significant disruptions in the global automotive industry as it transitions towards electrification. In a statement, the company said:
“The transformation is particularly intense in Europe where automakers face significant competitive and economic headwinds while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles.”
EU CO2 regulations and lagging EV sales
European automakers are under pressure to meet strict carbon dioxide (CO2) emission limits. New fleet-wide emission standards will take effect in 2025, with a longer-term EU goal to achieve zero emissions by 2035, effectively phasing out most internal combustion engine vehicles.
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By GlobalData
However, EV sales have been sluggish in the region, with a 5.8% decline in the first nine months of the year, according to industry data. Germany, Europe’s largest car market, recently reduced government subsidies for EV purchases, dampening consumer demand.
At the same time, European automakers face intensifying competition from Chinese EV manufacturers offering lower-cost alternatives. Ford’s European sales fell by 15.3% in the first nine months of 2024, reducing its market share to 3%, compared to 3.5% during the same period in 2023, according to the European Automobile Manufacturers’ Association (ACEA).
Production cuts and industry outlook
Ford plans to reduce working hours at its Cologne, Germany, plant, where it manufactures the Capri and Explorer EV models. The company’s global net profit also dropped by 26% to $892 million in the third quarter, partly due to a $1 billion charge for discontinuing a planned electric SUV project.
Ford Vice Chairman and CFO John Lawler recently urged the German government to implement clearer policies to support the EV transition. In a letter, Lawler highlighted the need for greater public investment in charging infrastructure, consumer incentives, and more flexible CO2 compliance targets to safeguard the future of the European automotive sector.
Ford’s announcement underscores broader industry challenges, with Volkswagen also reportedly considering plant closures in Germany due to similar pressures. ACEA has called for an accelerated review of EU CO2 targets scheduled for 2026, arguing that current policies may hamper the competitiveness of European automakers.
As Ford marks its 100th year of operations in Germany in 2025, the company faces the dual challenge of adapting to the EV transition while navigating an increasingly competitive and constrained European market.
