EV transition: Ford to axe 3,800 jobs in Europe, create 2,500 in America
Ford has outlined plans to downsize its engineer base in Europe by 2,800 people and will also axe 1,000 corporate and distribution roles over the next three years. But it is also creating 2,500 jobs in battery manufacturing in the US.
The carmaker announced the plans to axe the European jobs over a three-year period on Tuesday (14 February). The UK will be one of the main markets affected by the plans. 1,300 jobs in the UK will be phased out – equivalent to one in five of the jobs Ford currently hosts here. 1,000 of the roles are in product development and the remaining 300 are in product development functions.
In Germany, a total of 2,300 jobs are set to be cut.
Ford said in a statement that it was a “difficult decision, not taken lightly”. The statement elaborated that the firm is “in consultation with social partners” to achieve the reductions in roles through voluntary agreements with staff.
Ford justified the move by stating that it needed to make its cost structure “leaner”, with 1,000 jobs across Europe set to go in fields including administration, marketing, sales and distribution. It also noted that its transition to a “smaller, more focused and increasingly electric product portfolio” was a key reason to reduce its engineer base.
“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,” said Ford Model e’s general manager in Europe, Martin Sander. “This will impact the organisational structure, talent, and skills we will need in the future.”
Last March, Ford began restructuring its business to create two separate divisions – one for electric vehicles (EVs) and one for petrol and diesel vehicles. It is aiming for one-third of all global sales to be accounted for by EVs by 2026, increasing to half by 2030.
Sales in Europe, it has stated, should pick up more rapidly than in North America, due to a more supportive legislative and regulatory environment. Ford is set to offer a portfolio of nine pure-electric cars and vans in Europe by 2024.
By 2035, all new Ford vehicles sold in Europe will be electric.
While the rocky economic outlook in the UK, Germany or other European markets is not mentioned in Ford’s release, Ford in Britain’s chairman Tim Slatter told the BBC that this was a key consideration in taking the decision.
North American battery boon
Ford has committed £380m to transform its gearbox factory at Halewood on Merseyside into an electric motor manufacturing hub.
However, it is clear that it sees the North American market as crucial to achieving its EV manufacturing targets. It is aiming to deliver an annual run rate of 600,000 EVs globally by the end of 2023.
Earlier this week, Ford announced that it will invest $3.5bn in a new EV battery plant in Marshall, Michigan. Production of lithium iron phosphate batteries at the factory is slated to begin in 2026, with an initial cohort of around 2,500 staff. As production scales up, Ford will have the option to explore hiring more staff.
Ford is also expecting its overall EV investments in North America to create more than 118,000 jobs, directly and indirectly.
The new plant in Michigan will add approximately 35GWh per year of new battery capacity for Ford– equivalent to around 400,000 pure-electric cars and vans annually.
In a statement, Ford noted that “building in Michigan, Ford will benefit from the Inflation Reduction Act (IRA) – creating one of the lowest-cost U.S.-produced batteries when the plant comes online”.
Passed last summer, the IRA is the biggest spending package on measures to reduce emissions and improve climate adaptation from any national government. It was scaled back due to strong opposition from Republicans and some rebel Democrats, but still allocated a total of $369bn to climate action, including $26bn of subsidies for low-carbon transport.
The pressure is now on the EU, UK, and other markets to rival the Act or face losing out in the global cleantech race. EU lawmakers are in the process of finalising the details of a new ‘Green Deal Industrial Plan’ with this in mind. Europe is particularly concerned about the IRA’s impact on EV manufacturing and trading.
The Green Deal Industrial Plan’s pillars are ensuring more rapid access to funding – public and private – for cleantech firms; implementing regulations that enable the net-zero transition; closing skills gaps and cooperating globally on the trade of low-carbon goods and services.