BERLIN — Ford plans to cut 3,800 product development and administration jobs in Europe in the next three years, the company said on Tuesday, citing rising costs and the need for a leaner structure as it pivots production to electric vehicles.
Around 2,300 jobs will go at the carmaker’s Cologne and Aachen sites in Germany, 1,300 in the UK and 200 in the rest of Europe, the company said, adding it intended to achieve the reductions through voluntary programs.
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The news comes as a blow to unions who said in late January the worst-case scenario was 2,500 job cuts in Europe in product development and a further 700 in administration.
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The cuts were needed to “revitalize business in Europe,” Ford said in a statement.
The automaker signaled more cost cutting on its results call in early February, and Chief Financial Officer John Lawler said it would be “very aggressive” in reducing expenses in manufacturing and supply chain operations.
Lawler also said at the time that productivity of engineers in Europe was 25-30% lower than it should be.
The U.S. group will retain around 3,400 engineers in the region who will build on core technology provided by their U.S. counterparts and adapt it to European customers, European passenger electric vehicle (EV) chief and head of Ford Germany Martin Sander said on a press call.
“There is significantly less work to be done on drivetrains moving out of combustion engines. We are moving into a world with less global platforms where less engineering work is necessary. This is why we have to make the adjustments,” Sander said.
Nothing has changed in the carmaker’s electrification strategy, Sander added, with the goal of offering an all-electric fleet in Europe by 2035 still in place.
Ford is due to launch its first electric vehicle in Europe built on Volkswagen’s MEB platform in Cologne later this year and is considering bringing a Ford platform to Europe, possibly to its plant in Valencia, Sander said.
“We are preparing our organization to compete and win in a region facing unprecedented economic and geopolitical headwinds,” he said.
Ford’s European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6% operating margin in the region, a goal thrown off course by the pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales. (Reporting by Victoria Waldersee Editing by Kirsten Donovan and Mark Potter)