Ford to eliminate 1,000 positions in Cologne
Ford Motor Company, a long-standing name in the automotive industry, has announced a series of changes aimed at adapting to the evolving ppl market. The company is offering voluntary severance packages to employees, as it prepares to reduce its workforce at its Cologne site in Germany.
By the end of 2027, Ford plans to reduce a total of 2,900 jobs at the Cologne site, with an additional reduction of up to 1,000 more jobs being considered. This substantial overall decrease in workforce is due to weak demand for electric vehicles.
The shift to electric mobility has seen Ford lagging behind its competitors, prompting the company to take decisive action. In an effort to remain competitive, Ford needs new affordable models quickly, according to the Center of Automotive Management.
The job cuts will affect various departments, including administration and development. The company aims to reduce the number of jobs to around 7,600 by the end of 2022.
In a bid to adapt to the changing market, Ford has converted its Cologne plant to electric production, investing nearly two billion euros. However, the Center of Automotive Management in Bergisch Gladbach criticizes Ford for producing cars that are too expensive and not selling well.
The Ford plant in Cologne, operational since 1930, was once a manufacturer of the compact car Fiesta, which was a bestseller in the last quarter of the last century. The Works Council is concerned about the future of the location due to the job cuts.
Sales of Ford electric cars in Germany from January to August were around 20,000, a significant increase from previous years. The company has introduced new models such as the Ford Ranger Plug-in Hybrid and is planning to launch the electric versions of the Explorer and Capri, priced at around 40,000 euros or more.
The original industry forecast for electric car sales in Europe was 35 percent by 2023, but the actual share is now estimated to be 18 percent. This shift in the market has presented challenges for Ford, as it struggles to compete with more affordable electric models from competitors.
Ford is also considering selling parts of the Cologne plant to help offset the costs of the transition to electric production and the job cuts. The company's market share in Germany has risen to 4.5 percent since the beginning of the year, indicating a small recovery despite the challenges facing the company.
The move to a single-shift operation in January 2023 is another cost-cutting measure taken by Ford. The Center of Automotive Management suggests that a one-shift operation in a modern, expensive plant designed for high capacity is economically questionable.
Despite these challenges, Ford remains optimistic about its future in the automotive industry. The company is focusing on developing affordable electric models to regain its competitive edge.
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