Ford to confirm Europe job cuts by mid-Feb as buyers eye German site

US CARMAKER Ford will decide how many jobs to cut in Europe by mid-February, a German union said on Tuesday (Jan 24), after reports surfaced that Chinese electric vehicle (EV) maker BYD and car contract manufacturer Magna were keen to buy one of its sites in Germany.

The site, in the town of Saarlouis, will stop producing its current model, the Ford Focus, from 2025. Its future has been uncertain since last June, when Ford picked an alternative site in Spain to assemble its next-generation electric vehicles (EVs).

The site’s works council chief, Markus Thal, told Reuters that among 15 potential investors in the German site were companies dealing in energy and car assembly, as well as original equipment manufacturers. The Wall Street Journal reported on Tuesday that Ford officials would be travelling to China next week, to discuss the site’s sale with BYD.

BYD is one of numerous Chinese brands targeting Europe’s growing EV market. It currently produces only electric buses there, but it told Reuters in October 2022 that it was looking to also make electric cars in the continent. A month later, it said it planned to add more models to its current line-up of three China-made cars, and expand into more European markets in 2023.

Autos publication Automobilwoche reported that Magna and Dutch carmaker VDL Nedcar were also among the interested investors. Spokespeople for both companies declined to comment.

Thal said it was of “secondary importance which continent a possible investor comes from”.

“If a carmaker comes, that’s what we would like to see, because it’s what we do,” he said. He added that negotiations with possible investors had accelerated in recent months, and that Ford aimed to present a solution for the future of the plant by the end of the first quarter.

“We need a plan urgently,” he added, saying workers would not wait until 2024 for a solution.

A spokesperson for Ford said the carmaker was “in ongoing discussions with a number of potential buyers”, but declined to comment on the individual companies named.

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Separately, union representatives for Ford’s largest German site, in the city of Cologne, will meet on Saturday to discuss planned job cuts.

The works council informed workers of the cuts in meetings on Monday. Management figures were invited to present their plans to the workforce, but did not provide any details, the council said.

The carmaker’s US leadership has flagged repeatedly that producing EVs requires less labour. It has committed to an all-electric line-up in Europe by 2030.

A union spokesperson said the worst-case scenario would be up to 2,500 job cuts in product development, and a further 700 in administration. A second scenario was also on the table, they added, declining to provide details.

A Ford spokesperson declined to comment on the planned cuts. They referred to a statement made on Jan 20, in which the carmaker said that the shift to EV production required structural changes, and that it would not say more until plans were finalised.

Ford’s European staff last saw a wave of job cuts in 2019 and 2020, as the carmaker pursued a 6 per cent operating margin in the region. This goal was thrown off course by the Covid-19 pandemic, with its pre-tax profit margins in Europe at just 2.2 per cent of sales in the first nine months of last year.

The works council in Cologne demanded that management commit to no layoffs before Dec 31, 2032. It also asked that the roughly 2,500 product development staff there be kept part of the carmaker’s global development landscape. REUTERS