Ford to Cut 3,800 Jobs in Europe Amid Electric Vehicle Transition Speed-Up

Concerns Over Economic Slowdown... Strategic Move to Electric Vehicles
First Electric Car Produced in Germany to Launch Within the Year

[Asia Economy Reporter Haeyoung Kwon] American automaker Ford will cut a total of 3,800 jobs in Europe. As concerns over economic slowdown deepen, pressure to reduce costs has increased, and this move also serves as a strategic step to accelerate the transition to electric vehicles.

[Image source=Yonhap News]

On the 14th (local time), Ford announced that it will cut 3,800 employees across automobile production, development, and management sectors over the next three years. The scale of the layoffs corresponds to about 11% of its workforce in Europe, with plans to lay off 2,300 employees in Germany, 1,300 in the United Kingdom, and 200 in other European countries.

Ford stated, "This is part of efforts to create a leaner and more competitive cost structure in Europe," and added, "We will pursue reductions through voluntary layoffs."

Regarding this round of layoffs, Ford explained that it is intended to support the transition to electric vehicles. Ford plans to launch its first electric vehicle produced in Germany by the end of the year, in line with its policy to sell only electric vehicles starting from 2035. Meanwhile, production of the internal combustion engine model Fiesta will be discontinued.

In fact, analysts say that the transition to electric vehicles is at the core of Ford's large-scale layoffs. While an internal combustion engine vehicle contains about 30,000 parts per car, an electric vehicle has significantly fewer, about 19,000 parts. The assembly process is also simpler than that of internal combustion engine vehicles, allowing electric vehicles to be produced with much fewer personnel. Although Ford switched its focus from internal combustion engine vehicles to electric vehicles relatively late, the automotive ecosystem is now centered around electric vehicles, prompting a shift to a new production system.

Through this, Ford aims to drive the expansion of electric vehicle sales and achieve 600,000 units sold in Europe by 2026. According to the European Automobile Manufacturers Association (ACEA), Ford sold 516,614 vehicles in Europe last year, holding a market share of 4.6%.

Recent concerns about economic recession and interest rate hikes, among other unstable macroeconomic conditions, have also influenced the layoffs. Ford explained, "Unprecedented economic and geopolitical headwinds are also factors in the layoffs." Last year was particularly challenging for automakers. Following Russia's invasion of Ukraine, energy prices soared, causing raw material costs to skyrocket. As production costs surged, manufacturers reduced production, relocated some operations outside Europe, and carried out layoffs.

Martin Sander, Ford's head of Europe, said, "This was not a decision made lightly but a difficult one," and added, "We are aware of the uncertainty that (the layoffs) will cause, and we plan to provide maximum support to those affected."

While Ford is cutting jobs in Europe, it is expanding its electric vehicle investments in the United States. On the 13th, Ford announced plans to establish a battery factory in Michigan in partnership with Chinese electric vehicle battery maker CATL. The investment scale is $3.5 billion (approximately 4.5 trillion KRW).

This content was produced with the assistance of AI translation services.