Automaker Ford to retrench staff at its European operations as it shifts to EV

Another big company, Ford, is planning to retrench its staff and that is the word reaching BusinessTech Africa.

It is widely reported that Ford will dismiss some 11% of its workforce in Europe as the American carmaker cuts cost in the latest sign of industrial disruption caused by the automotive sector’s shift to electric vehicles.

Ford said of the total 3,800 jobs to go, workers in Germany and the United Kingdom will be hardest-hit with about 2,300 and 1,300 positions to be eliminated respectively over the next three years, Ford said Tuesday.

Germany’s IG Metall last month estimated around 3,200 people would lose their jobs.

“Electric vehicles are much less complex,” Martin Sander, general manager of Ford’s electric-vehicle business in Europe, said in an interview with Bloomberg Television.

“The whole industry is going to get significantly leaner than it was in the past.”

The United States-based motor company is shifting its model line-up in Europe to battery-only by 2035 and has previously said that the reduced time and effort to develop and make electric cars would lead to smaller product-development teams.

It is reported that the company is also trimming jobs in the U.S. as Chief Executive Officer Jim Farley targets more than $3 billion in annualized savings while investing more than $50 billion in EVs through 2026.

Boasting about 173,000 employees around the world, Ford had some 35,000 positions in Europe as of the end of last year, with Cologne its biggest plant with 14,000 workers.

In England, the company has roughly 7,000 direct employees across three main sites and it intends to make the reductions through voluntary agreements, it said on Tuesday per IOL.

An analyst affiliated with Benchmark, Michael Ward, said restructurings in Europe are generally tough and costly owing to government and union approvals.

“The region was barely profitable in 2022 and has lost money in three of the last five years,” he said.

“We view the actions as necessary and positive.”

Ward also believes that the elimination of 3,800 jobs will cost the automaker at least $4 billion over the next three years.

Ford fell 1.2% in early trading in New York, taking declines over the past year to 23%.