Ford to cut thousands of jobs in Germany

2024-11-21 10:10:00, Tech CNA

American carmaker Ford will cut 2,900 jobs in Germany. Most jobs will be cut at the Cologne plant. The concern argues the decision, among other things, with the drop in demand.

By the end of 2027, around 4,000 jobs will be cut in Europe, while 2,900 jobs will be cut in Germany alone, the company announced. Details will be negotiated with employee representatives. The concern refers to the difficult situation of the automobile industry in Europe and the weak demand in the market, high costs in the process of transition to the production of electric cars, strong competition and strong bureaucratic rules.

Dilemma: Pagan waiver instead of factory closure?

The union IG Metall and the works councils have presented their project against the savings plan to the leadership of the concern.

Ford, according to its data, has almost 16,500 employees in Cologne, Saarlouis and Aachen. The European headquarters of the concern as well as the factory for the production of two models of electric vehicles are located in Cologne. According to data from the company council, Ford currently has around 11,500 jobs in Cologne, which means that one in four jobs could be cut here. Expectations from the production of electric vehicles at this plant have not been met so far. In the years 2023 and 2024, almost two billion euros were invested in the Cologne factory to enable the production of electric cars. Production of the combustion engine Fiesta has been discontinued. Ford has also had problems with the departure of several leading managers since the head of the concern in Germany, Martin Sander, this summer suddenly withdrew by accepting a position at the Volkswagen concern.

By 2018 Ford had about 20,000 employees in Cologne, while by the end of 2027 less than half will remain. The company council stated that there is no understanding for this business decision. "It's a black day for Ford," said company chairman Benjamin Gruschka, scathingly criticizing management. "I don't remember ever having such an unreasonable action by the concern." According to him, "there will be a strong resistance in the coming weeks and months". At Ford in Cologne, there will likely be a confrontation between the entrepreneur and the employees, as never before. "We will not support the cuts," the company's council said. The union IG Metall also expressed a similar opinion, warning that the plans for cuts are massively threatening the existence of German production centers.

Wüst: "Another heavy blow for the automotive industry"

The premier of North Rhine-Westphalia, Hendrik Wüst, considered the announcement of job cuts to be "another heavy blow for Germany as a center for automobile production" and a "serious signal for Cologne as a center for automobile production ". The state government will follow this process. "I expect from Ford that the company will continue to stick to its promises, by not terminating employment contracts," the Christian Democrat politician told the Kölner Stadt-Anzeiger newspaper. He said, that "the company council has been consulted regarding the background and next steps". The prime minister of the country is also in contact with the management. Wüst called for a "strong signal from the federation to deal with the current problem of falling demand for electric vehicles with effective and long-term measures".

Ford's manager, Marcus Wassenberg, emphasized that he wants a strong business in Europe for future generations as well. "We must therefore take tough measures to ensure Ford's ability to compete in Europe." Management focused its appeal to federal policy on the need to improve market conditions. In Germany and Europe, there is a lack of "a consistent and clear political agenda for the promotion of electromobility", criticizes the management of Ford.

Big losses in the non-Ford car segment

The car manufacturing segment has created huge losses for Ford in recent years, the concern said further. In this segment, the costs of switching to the production of electric vehicles are very high. In addition, the enterprise also refers to problems with competition and strict objectives for the reduction of carbon dioxide emissions. Such objectives in Ford's view are an obstacle to the separation of the business into the production of combustion engine and electric vehicles.

But Ford is not the only concern with problems in this regard. Other vehicle manufacturers are also under pressure. After the removal of the state subsidy for electric vehicles, the weak economic situation and the fear of jobs have restrained consumers from purchasing new vehicles. Even Germany's largest car manufacturer, Volkswagen, has announced factory closures and job cuts in Europe. The union IG Metall and the company council are ready to accept wage cuts in order to cut production costs./ DW