Ford follows the same path as Opel in Europe

Ford's employees in Europe thought the worst was behind them when the automaker's two-year restructuring program was completed at the end of 2020, resulting in 10,000 layoffs and the closing of parts plants in Britain and France, along with car factories in Russia.

But it now seems Ford has not yet reached the lowest point. Ford plans to slash up to 3,200 jobs in Germany, with small reductions possible at Ford's operations in the UK and Belgium.

This latest jobs cull is particularly dramatic because the layoffs could result in the loss of 2,500 of the 3,800 jobs at its technical center in Merkenich, Cologne.

The reduction in development capacities means that the Ford's U.S. management is permanently withdrawing potentially important value-creating activities from Europe and is also an admission that it can no longer recapture the lost market share.

In this respect, the move is reminiscent of the enormous loss of importance of the Opel development center in Ruesselsheim after Opel was acquired from General Motors by PSA Group in 2017 and later integrated into Stellantis. Before the purchase, the center had more than 6,600 employees, who developed GM vehicles for global markets including the U.S. and China.

Through buyouts, attrition or transfers to a French partner, Segula, that number has been cut by about 75 percent, and the center's functions have been greatly reduced from 15 "centers of competence" announced in 2018 to just a few now. Opel's vehicles are now underpinned by Stellantis platforms with most of the development work done outside of Germany.

Ford's product development in Europe is going the same way. Ford is using Volkswagen Group's MEB electric platform for electric cars it will launch this year and next year. Its product lineup has shrunk by around half with models such as the Fiesta and Focus currently being phased out, and models such as the midsize Mondeo, Galaxy minivan and Ka minicar already discontinued.

As Ford switches to an electric-only brand in Europe, its next-generation EVs will use a new software-defined electric architecture developed in the U.S. by Ford engineers.

About 65 percent of Ford's development jobs in Europe will be no longer needed, according to the IG Metall union. Workers representatives in Cologne have asked Ford for a commitment that its German product development staff will remain part of the automaker's global development landscape.

Ford has been struggling in Europe for decades with the problem of being a comparatively smaller manufacturer in the volume segments compared with rivals such as Volkswagen, while having to offer a very large portfolio of passenger vehicles. Its European market share last year was 4.4 percent with sales of just over 510,000 cars, according to industry association ACEA.

Ford will in the future mainly be present in the lucrative light commercial van business and in selected, higher-margin passenger car segments such as SUVs and crossovers.

Better small and profitable than large and loss-making, seems to be the motto.