Ford Motor Company has announced that it will cut 3,800 jobs in Europe over the next three years in a bid to streamline its operations and focus on the production of electric vehicles.
The company plans to reduce 2,300 positions in production development and administration in Germany, 1,300 in the UK, and 200 roles elsewhere in Europe. However, it will keep around 3,400 engineering positions in Europe focused on vehicle design and development, in addition to creating linked services.
According to Ford, the restructuring will not affect its aim of offering an all-electric fleet by 2035. The company expects to begin producing its first European-built electric passenger vehicle later this year. Martin Sander, General Manager of Ford Model e in Europe, commented that “paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build, and sell Ford vehicles. This will impact the organizational structure, talent, and skills we will need in the future.”
The decision to cut jobs comes as the US automaker faces challenges in Europe, as well as the global market. Ford’s Chief Financial Officer, John Lawler, blamed the company’s depressed earnings on execution and supply chain management hurdles, as the vehicle producer fell short of expected sales by 100,000 units last year.
The company posted $11 billion in losses in the final quarter of 2021, down from the same period of the previous year, and falling $1.1 billion short of its own guidance, News About Nigeria reports.
Ford’s restructuring plan in Europe is part of a broader initiative by the automaker to make its business more efficient and profitable. During a presentation of the company’s fourth-quarter results, CEO Jim Farley noted that the company’s EV business was not yet profitable, a year after separating it from its internal combustion engine business and upping its expected investment in EVs and other technologies to $50 billion by 2026.
The decision to cut jobs at Ford highlights the challenges that automakers face as they transition to producing electric vehicles. Many traditional car manufacturers are finding it difficult to compete with newer EV companies like Tesla, which are able to produce vehicles more efficiently and at a lower cost.
However, with the launch of its first European-built electric passenger vehicle later this year, Ford is hoping to be able to close the gap and become a leading player in the EV market.