Ford has revealed its intention to eliminate 3,800 positions throughout Europe, citing challenging economic circumstances. This BNN news today reflects its significant push towards electric vehicles. The American automaker stated on Tuesday that over the next three years, approximately 2,300 jobs would be eliminated in Germany, 1,300 in the United Kingdom, and 200 throughout the rest of Europe, primarily in its administrative and product development divisions. These reductions represent roughly 11% of Ford’s personnel in the area.
Ford’s place in the automotive industry
Ford is a well-known company in the automotive sector. Over the years, Ford has produced many popular car models, such as the Mustang, F-150, Explorer, Focus, and Fiesta, among others. The company has a loyal customer base, and its vehicles are renowned for their reliability, affordability, and performance. Additionally, Ford has made significant strides in the development of electric vehicles, which has helped attract a new segment of customers who are interested in environmentally friendly cars.
About the new plan
According to a press release, this strategy is a component of the corporation’s drive to establish “a more competitive, streamlined cost structure for Ford in Europe.” The firm stated that it intends to execute the staff reductions via voluntary severances.
The seasoned automobile manufacturer claimed that the workforce reductions were primarily caused by its transition to electric vehicles and a reduction in the “complexity of the vehicles.” Ford aims to begin manufacturing its first electric passenger car in Europe later this year, a critical milestone in its goal of transforming its entire European fleet into electric vehicles by 2035.
The general manager of Ford Europe further stated in the press release, “In light of the circumstances, these are tough decisions that we haven’t made lightly. We recognize the anxiety it may create for our staff, and I guarantee them that we will provide them with our complete support in the coming months.”One spokesperson from the company added that the workforce reductions are also a response to the “unpredictable economy and geopolitical challenges” confronting the area.
European manufacturers have faced a tough year, with energy costs soaring following Russia’s invasion of Ukraine in February last year. Prices peaked at €338 ($363) per megawatt per hour in the month of August. The cost of raw materials also surged. These exorbitant expenses placed a burden on manufacturers, prompting some to decrease production, move some of their operations outside Europe, and reduce their workforce.
Although energy prices have eased in recent months, inflation in this area has been a concern. Wholesale gas prices, a crucial component for much of Europe’s heavy industry, have now returned to pre-conflict levels. However, the European Central Bank has committed to maintaining the current path of raising interest rates to address elevated inflation in consumer prices. With this BNN news today, it could curtail economic growth in the near term for the 19 euro-using count