Ford plans to eliminate 1,000 positions in Cologne
Ford Motor Company has announced plans to reduce a total of 2,900 jobs at its Cologne production facility by the end of 2027. The reductions will impact various departments, including development, as part of a broader cost-cutting strategy.
Initially, the staff reduction does not involve dismissals for operational reasons. However, if the target is not met, dismissals could occur. The company is offering voluntary severance packages to employees as part of the plan.
The cost-cutting measures include the switch from a two-shift operation to a single-shift operation in January 2023. Ford's Cologne plant, which was converted to electric production at a cost of nearly two billion euros, will continue to focus on electric vehicle production.
The demand for electric vehicles has been weak, leading to poor sales for Ford's new electric models. According to Ford, the demand for electric vehicles in Europe is currently significantly below the original industry forecasts. The federal government's abolition of an electric vehicle premium has also contributed to a sharp drop in demand for electric vehicles.
Stefan Bratzel from the Center of Automotive Management (CAM) has been critical of Ford's strategy, stating that the company is selling cars that are too expensive and can't sell them. Bratzel also suggests that Ford's electric vehicles do not fit the brand's image, as they are priced above 30,000 euros. He considers a one-shift operation in a modern, expensive plant designed for high capacity to be economically questionable for Ford.
Despite the challenges, Ford's market share in Germany has risen from 3 to 4.5 percent since the beginning of the year. The overall sales of Ford passenger cars in Germany from January to August were approximately 74,000 units, with around 20,000 units of electric passenger cars sold during the same period.
The key decision-makers for the production of the 2024 Ford Ranger Plug-in Hybrid in Cologne include Ford's global product development executives and the management team at the Cologne manufacturing plant. Ford initially predicted that electric vehicles would account for 35 percent of all cars sold in the market by 2023, but this has been deemed overly optimistic.
Bratzel, however, believes that Ford is only trying to contain losses and needs new, affordable models quickly to succeed in the market. He emphasises the need for Ford to adapt to changing market conditions and consumer preferences to ensure its continued success.
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