Ford clearly understands that the future of European cars is electric. And also that he is going to fire 4,000 employees for this.

Ford is going through one of its most difficult moments. And Europe is acutely feeling the consequences. The company announced that it would lay off 4,000 employees in Europe to adapt to real demand for its products. A product that should be converted to electric but is not finding buyers.

4000 layoffs. With a statement and warning that workforce cuts will be focused on Germany and the UK. In other markets, they note, there will be a “minimal contraction.” Ford confirmed Hataka that Spain will not be affected by this wave of layoffs.

The company explains that this is about adapting the workforce to the demand for the cars that Ford places in Europe. Between January and October (the latest data available), ACEA indicates that Ford sold 44,000 fewer units than last year, adding a total of 262,410 units and recording a decline of 14.5%.

Adaptation to demand. Ford notes that these 4,000 layoffs must be resolved by 2027, arguing that the company has suffered “significant losses in recent years, and the industry’s shift to electrified vehicles and new competition have had a highly disruptive impact” on the passenger vehicle auto market.

In recent years, we’ve seen Ford ditch heritage European-market models like the Fiesta and Focus to focus on its SUV lineup. At the same time, electric vehicles are not gaining momentum. The price of the Ford Mustang Mach-E has increased, causing it to disappear from the market, and electric cars don’t seem to have received the expected response.

In fact, the company is announcing a restructuring at its Cologne plant. Right at launch, the Americans are already cutting production of the Ford Capri and the electric Explorer, two models that should be in the first stage of growth, and increasing production now that they are on the market.

European competitiveness. In its statement, the company said manufacturers must contend with “significant competitive and economic headwinds while addressing the mismatch between CO2 emissions regulations and consumer demand for electrified vehicles.”

This speech seems familiar to us because it is the same speech that much of the industry has warned about or that other giants such as Michelin have been highlighting, which will close two factories in France. Issues of emissions and labor costs have come into focus in recent days, fueling the decision to lay off thousands of employees.

Emissions. To understand why companies are focusing on these two issues, we must remember that new emissions rules will come into force next year. Regulation setting new emissions limits at 93.6 grams of CO2/km. To give us an idea, a less equipped and less powerful Toyota Corolla (hybrid) emits 100g CO2/km.

This limit will force companies to make two decisions. The first is obvious: sell more connected cars. Both hybrids and pure electric vehicles will significantly reduce average emissions. The second option seems unnatural. We’re talking about selling fewer internal combustion engine cars. Thus, the weight of the plugins increases in the company’s quota, and emissions are once again reduced to mitigate possible millions in fines.

Labor costs. We Europeans charge too much money. At least that’s the thinking of car manufacturers who believe they can’t produce in Europe at a competitive price. This is something that Stellantis, Volkswagen support and of course it looks like Ford supports too.

In fact, all indications are that if Chinese manufacturers want to establish themselves in Europe, they will do so by producing in the east of the continent, in Turkey or Morocco, where labor costs are lower. These latter two countries also have trade agreements with Europe that will allow them to bypass tariffs.

And a strategy that doesn’t seem to work. While Ford didn’t point out self-criticism in its statement, it seems clear that the plan to split the company into two parts (electric and software on the one hand, and combustion on the other) is not producing the expected results. The idea is that both companies will function as a see-saw, where fuel combustion will support electricity costs, little by little, electricity revenue will support combustion. But they don’t stop counting their losses.

And while it’s still early days, it looks like the idea of ​​extending the “two families” idea across its range isn’t yielding the expected results. Ford has teamed up with Volkswagen to speed up production of electric vehicles and cut costs. But the electric Explorer and Capri, despite having their own philosophy in their setup, continue to receive problems inherited from the Germans.

These cars were meant to represent Ford’s “cheap” cars, and in addition we can imagine a second line that would boast made in Ford with the Mustang or Bronco as the best representatives. The cars are born and developed within Ford and, curiously, do without any emblem to remind us of the company.

Photo | Ford

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