The union says that Ford will cut up to 3,200 jobs in Europe, and they promise to fight.
Ford Motor Co. (F.N.) wants to cut up to 3,200 jobs in Europe and move some product development work to the U.S., the IG Metall union in Germany said on Monday. If the cuts go through, the union said it would take action against the car company all over Europe.
Automakers are under pressure to cut costs because the cost of materials for electric vehicle batteries is going up and the US and European economies are expected to slow down. Analysts say that the EV price war that Tesla Inc. (TSLA.O) started at the beginning of this month has made the situation worse.
IG Metall said that the company wants to get rid of up to 2,500 jobs in product development and up to 700 jobs in administration. Most of these jobs are in Germany.
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The plans were told to the 14,000 people who work at the US carmaker’s Cologne site, including 3,800 at a development centre in the Merkenich area, at work council meetings on Monday.
Ford’s spokeswoman in Germany didn’t want to say anything. She pointed to a statement the company made on Friday, in which it said that making the switch to making electric vehicles (EVs) will require structural changes and that the company won’t say more until plans are finalised.
A spokesperson at the automaker’s headquarters in Michigan said that talks with the German works councils were still going on and that the company needed to be “more competitive” as it moved to EVs. He wouldn’t say anything about his job plans.
Ford said last year that it would spend $2 billion to make its Cologne plant bigger so it could make an all-electric model for the mass market. The plant makes engines and transmissions, as well as the Ford Fiesta.
As part of a big push for electric vehicles (EVs) on the continent, the car company, which employs about 45,000 people in Europe, is planning to build seven new EVs there, as well as a battery assembly plant in Germany and a joint venture in Turkey to make nickel cells.
It also works with Volkswagen (VOWG p. DE) to build 1.2 million electric cars on Volkswagen’s MEB platform over the next six years.
Representatives from Ford and Volkswagen said that the partnership is still in place. However, a spokesperson for Ford in the U.S. said that Volkswagen’s role in Ford’s next generation of electric cars for Europe has not yet been decided.
But in June last year, it warned of “significant” job cuts in the near future at its factory in Spain and its plant in Saarlouis, Germany. This was because the switch to making electric vehicles (EVs) would mean fewer hours of work were needed to build cars.
For the first nine months of 2022, Ford’s pre-tax profit margins in Europe were only 2.2% of sales, which is a lot less than in North America. It also warned in October that the economy in Europe was getting worse.
“We will join the process if talks between the workers’ council and management in the next few weeks don’t ensure workers’ futures,” IG Metall said.
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“We won’t back down from actions that could hurt the company a lot, not just in Germany but all over Europe.”
On Monday afternoon in New York, Ford shares went up 3.9% to $12.89. General Motors Company (GM.N) shares went up 3.1% to $36.45, while Tesla shares went up 7.6% to $143.60.