Ford's troubles continue. Its stock price slumps as automaker plans job cuts

MW Ford's troubles continue. Its stock price slumps as automaker plans job cuts

By Louis Goss

Carmaker says 'the industry faces unprecedented competitive, regulatory, and economic headwinds' in Europe

Ford Motor Company has outlined plans to lay off 4,000 of its European employees in response to a series of losses it blamed on troubles with Europe's car market and slow uptake of electric vehicles.

In a statement on Wednesday, Ford $(F)$ put forward plans to reduce the size of its European workforce by 4,000 by the end of 2027 in order to "ensure the long-term sustainability of its business in Europe" in the face of a major slump in Europe's automotive sector.

Ford's stock fell over 3%, taking this year's share-price slide to 13% in a market where the S&P 500 has gained 24%.

In explaining the cuts, Ford noted it had "incurred significant losses in recent years" from its passenger-vehicle business in Europe, made worse by slower-than-expected uptake of electric vehicles among European consumers and competition from low-priced EV makers in China.

Ford said the cuts were being made in response to the widespread troubles facing the global automotive sector, which it blamed on a "period of disruption, especially in Europe, where the industry faces unprecedented competitive, regulatory, and economic headwinds."

The job cuts will mainly affect workers in Ford's U.K. and German divisions, with minimal reductions in other European markets. Ford currently employs around 34,000 people across Europe, including 5,300 workers in the U.K. and 16,500 in Germany.

In a letter, John Lawler, Ford's vice chair and chief financial officer, separately called on the German government to put forward a clear set of policies aimed at advancing uptake of EVs inside Europe's largest economy.

"What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility, such as public investments in charging infrastructure, meaningful incentives to help consumers make the shift to electrified vehicles, improving cost competitiveness for manufacturers, and greater flexibility in meeting CO2 compliance targets," Lawler said.

Ford has invested heavily in pivoting toward the market for electric vehicles over the past four years, including through the launch in June 2023 of its $2 billion EV-manufacturing facility in Cologne, Germany, which currently employs more than 4,000 workers.

In response to slow EV sales, the Dearborn, Mich.-headquartered Ford outlined plans to cut production of its Explorer and Capri electric SUVs that include a shortened workday at its Cologne facility starting in the first quarter of 2025.

Ford's plans come as Europe's top carmakers have suffered over the previous year due to high energy prices, slow uptake of EVs, competition from China and a slump in sales of new cars throughout Europe's major economies.

In October, Volkswagen (XE:VOW3) outlined plans to its works council to close three factories in Germany, in what would be the first closures of plants inside its home country in the entirety of its 87-year history.

Volvo (SE:VOLCAR.B) in September separately scrapped ambitions it set out in 2021 to transition into a 100% EV company by 2030, as the carmaker warned that "it is clear that the transition to electrification will not be linear."

-Louis Goss

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November 20, 2024 12:15 ET (17:15 GMT)

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