Car manufacturer Ford has announced it is cutting 800 jobs in the UK and 4,000 in Europe at large as it struggles with low growth in demand for electric vehicles (EVs) and competition from Chinese firms.
The BBC reports that the cuts will take place over the next three years, and will see the loss of 2,900 jobs in Germany. Together with the UK cuts, this will mean a loss of around 14% of Ford’s European workforce.
‘Difficult but decisive’
Vice president of Ford’s European division Dave Johnston reaffirmed the company’s commitment to operating in Europe by saying that it is “critical to take difficult but decisive action to ensure Ford’s future competitiveness” in the region.
The cuts are likely to affect administrative and product development roles, the BBC noted, and they follow the loss of 1,300 jobs at the UK arm of the car giant in 2023.
Lisa Brankin, managing director of Ford of Britain and Ireland, said that “making this announcement isn’t something that anybody wants to do”, but that it was necessary given the challenges being faced by those in the car industry as a result of disruption related to the shift to EVs.
“The automotive industry is going through a period of massive disruption at the moment. We’ve got unprecedented competition, regulation and lots of economic headwinds.”
Competition
The largest car manufacturer in Europe, Volkswagen, is also planning to close three of its German sites and to cut tens of thousands of jobs, according to the FT.
This is as a response to slowing demand for new cars, as well as price competition from Chinese manufacturers. Additionally, Ford’s CEO Jim Farley believes that EV manufacture will require 40% fewer workers than internal combustion engine (ICE) cars.
Ford chief financial officer John Lawler has also sent a statement to the German government to say that there is a need for greater flexibility on emissions targets:
“What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility.”
EV horizon?
The implementation of new rules from the government requiring manufacturers to transition away from ICE cars towards EVs, the Zero Emission Vehicle (ZEV) Mandate, has caused concern among some manufacturers.
According to the Society of Motor Manufacturers and Traders (SMMT), the UK car industry “will likely miss” targets for the sale of EVs this year, and EV sales in the UK market are around 18% of the total.
The BBC reports that some manufacturers are seeking a reduction in the penalties for firms who fail to meet targets, while the SMMT has called for the government to provide support for buyers of EVs.
A Nissan spokesperson said that “changes are required now to reflect the reality of the market, as we continue to work together to encourage more drivers to make the switch”.
Transport secretary Louise Haigh, however, has said that the government is “absolutely in listening mode.”
Haigh added that the ZEV Mandate “will not be weakened”.
