European Electric Vehicle Crisis! Ford announces a 14% reduction in European employees to cope with the winter

On November 20th, Eastern Time, American automaker Ford Motor Company announced that due to continuous losses in recent years, the company has decided to lay off approximately 14% of its workforce in Europe. This layoff is expected to affect about 4,000 employees, primarily concentrated in Germany and the UK, accounting for 2.3% of Ford's total global workforce of 174,000.

Ford is the latest automaker to announce layoffs, following Nissan, Stellantis, and General Motors. The reasons for the losses include weak demand for electric vehicles, insufficient government support for the electrification transition, and fierce competition from rivals. Additionally, the entire electric vehicle industry faces challenges with high prices that consumers find difficult to afford.

Ford's layoff plan could have a significant impact on the German economy. Germany is the largest economy in Europe, the largest automobile producer, and one of Ford's major markets in Europe. Meanwhile, Germany's largest automaker, Volkswagen, is also considering closing factories, cutting wages, and laying off thousands of workers to improve competitiveness. Furthermore, Germany's deepening political crisis presents more uncertainty for businesses, which are also struggling to cope with the impacts of former U.S. President Donald Trump's election.

Ford stated that the layoff plan in Europe will be completed by the end of 2027, with specific implementation details still to be discussed with labor unions. In Germany, it is expected that 2,900 jobs will be cut, while 800 will be cut in the UK. Additionally, Ford's factory in Cologne, Germany, will reduce production of the Explorer and Capri electric vehicle models.

Peter Godsell, Vice President of Ford Europe, stated:

"We are facing weaker demand for electric vehicles than previously anticipated, while also continuously facing challenges in operating costs. Therefore, we need to take decisive action to restructure the business. Ford hopes that this layoff will address the company's current issues, but if market conditions worsen, we certainly cannot rule out the possibility of taking additional measures."

As of September this year, Ford's sales in Europe have declined by 17.9%, far exceeding the overall industry decline of 6.1%. Ford has also specifically called on the German government to provide more incentives and better charging infrastructure to help consumers transition to electric vehicles.

The Berlin government ended electric vehicle subsidies last December, leading to a 28.6% decline in electric vehicle sales in Germany in the first nine months of this year. Ford's Chief Financial Officer John Lawler emphasized in a letter to the German government the lack of a clear and unambiguous policy agenda in Europe and Germany to promote the development of electric mobility, including public investment in charging infrastructure, meaningful incentives, and greater flexibility in meeting carbon dioxide emission compliance targets.

Ford's restructuring in Europe is not the first; it announced layoffs of 3,800 people back in February 2023 and plans to close its factory in Saarlouis, Germany, next year, which will lead to more job cuts. Marcus Wassenberg, General Manager of Ford Germany, stated that this layoff reflects the transformation the automotive industry is undergoing, especially given the high labor and energy costs in Germany