LONDON -- Ford plans to cut thousands of jobs in Europe as the company continues to exit unprofitable segments amid its pivot to electric vehicles -- but the even that tally may not be enough, industry observers believe.
Development roles will be hardest hit by the latest jobs cull, with 2,500 jobs expected to go at Ford’s technical center in Merkenich in Germany and an unspecified number of roles at risk at Ford’s commercial vehicle development center in Dunton, England.
Ford will need far fewer engineers in Europe as it axes traditionally high-selling but low margin volume models while launching new battery-electric cars, first using Volkswagen's MEB all-electric platform, then after 2030, a new software-defined electric architecture developed by Ford in the U.S.
"Two shifts are taking place at Ford. The first is out of low-margin cars such as the Fiesta and the second is into EVs on the back of Volkswagen technology,” said David Bailey, professor of business economics at the UK-based Birmingham Business School.
“The job cuts are a consequence of both shifts, but especially the partnership with VW," Bailey told Automotive News Europe.
Production of Ford's first MEB-based EV, expected to be called Explorer Sport, starts in October at the automaker's factory in Cologne, with a second, also built at the plant, due next year.
Building EVs generally requires fewer workers, Bailey said
Ford need to tackle its high-cost structure in Europe to offset the higher costs of building EVs and to address its historically low profitability in the region.
"Ford is too small in the passenger car business to be able to face the fierce competition from the big players in Europe,” Ferdinand Dudenhöffer from the Center for Automotive Research in Duisburg told the German dpa news agency.
Ford’s efforts to right size the business in Europe to cope with the change will inevitably mean more job cuts. "That is not the end of the line," Dudenhöffer said.
Ford will stop building its best-selling Fiesta small car in Cologne in June and and will end production of the Focus compact at its Saarlouis plant in Germany by 2025. Ford is seeking alternative uses for the Saarlouis factory but most of the 4,600 workers there are expected to lose their jobs.
The automaker is also ending production of Ford S-Max and Ford Galaxy minivans in Valencia, Spain, in April. Ford said in August that it is delaying future production investments in Valencia, where it plans to build its next-generation electric vehicles, because of Europe's worsening economic outlook.
With the previous axing of other volume models such as the Mondeo midsize car, along with the C-Max and B-Max minivans, Ford no longer plans to offer cars across a wide spectrum of segments that rivals cover including Volkswagen, Peugeot, Hyundai and Kia.
Ford will switch its focus to EVs, last year announcing seven new electric vehicles, including a version of its current best-selling model, the Puma small SUV.
It will focus on high margin SUVs, including models imported from the U.S. such as the Bronco midsize SUV, and on its successful vans division in Europe, which builds the Transit in Turkey. Ford is Europe’s biggest-selling light commercial vehicles brand.
Question marks remain over Ford’s current manufacturing footprint, including the diesel engine plant in Dagenham, near London.
“Without a clear transition strategy the site will not have a future. Witness the closure of Bridgend [engine plant] in 2020,” Bailey said.
Ford said its shift to selling only full-electric passenger cars by 2030 and all-electric vans by 2035 "requires significant change in the way we develop, build and sell Ford vehicles.”
It added: "This will impact our organizational structure, talent and the skills we will need in the future."
Michael Knauer of Automobilwoche contributed to this report