Ford of Europe was a success not that long ago, building great cars customers loved in huge numbers. Then it decided to end production of a number of those cars, notably the Mondeo and Fiesta to focus on to crossovers and EVs. It's a bet that hasn't paid off. Ford announced today that it's cutting 4,000 jobs across Europe, mostly in the UK and Germany, representing around 14% of its workforce there.
The layoffs will be complete by 2027. In a press release, Ford said "[o]f particular concern is the health of Ford’s passenger vehicle business in Europe, where the company has incurred significant losses in recent years, and where the industry shift to electrified vehicles and new competition has been highly disruptive."
It's true that there are significant headwinds for automakers in Europe, with tough emissions regulations on internal-combustion cars, regulatory uncertainty, less-than-anticipated demand for EVs, and the disruptive rise of Chinese imports. But it's also true that Ford simply ended production of popular models. Reuters reports that while there was a 6.1% percent decline in new-car sales across Europe through September, Ford's sales declined by 17.9%. Without mainstays like the Fiesta, and soon, the Focus, Ford is inevitably going to suffer.
Still, Ford is quick to lay blame elsewhere, at least publicly. As it points out in its press release, the company's CFO John Lawler recently wrote a letter to the German government saying "[w]hat 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."
That may be true, and Germany did end EV incentives this year, but with Ford's decline sharply outpacing the rest of the industry, its problems can't be all external.
Ford will also cut production targets for its newest European EVs, the Capri and Explorer, both of which are built on Volkswagen's MEB platform. Soon, the blue oval will also have an electric version of the popular Fiesta-based Puma crossover. But will that be enough to stanch the bleeding? Especially as Europeans keep buying small gas and diesel cars?
For its own sake, Ford needs to realize that many of its problems in Europe are of its own making.
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