Additional Workforce Reduction Following Early Last Year
14% of Total Workforce in Europe
American automaker Ford will cut an additional 4,000 jobs in Europe due to the electric vehicle "chasm" (temporary growth stagnation). The incoming administration of U.S. President-elect Donald Trump is also considering abolishing the tax credit benefit of up to $7,500 based on the Inflation Reduction Act (IRA), raising concerns that difficulties in the electric vehicle industry could intensify.
On the 20th (local time), Ford announced in a statement that it will carry out workforce reductions of this scale in Europe by the end of 2027.
It plans to cut 3,000 jobs in Germany and 800 in the United Kingdom, which accounts for 14% of its total 28,000 employees in Europe. Earlier, Ford had announced it would cut a total of 3,800 jobs in Europe at the beginning of last year, and this is an additional workforce reduction measure.
Dave Johnston, Vice President of Ford Europe, explained, "It is important for Ford to take difficult but decisive measures to secure future competitiveness in Europe."
As the growth of the electric vehicle market slows and price competition with Chinese electric vehicle companies intensifies, global automakers are facing pressure to close factories and reduce staff in various regions including Europe. Ford has continued layoffs in Europe over the past several years while incurring losses. To focus on more profitable models, it has also reduced its vehicle lineup. Volkswagen, the largest automaker in Europe, plans to close at least three factories in Germany and cut tens of thousands of jobs due to a sharp decline in market share in China and a slump in automobile demand within Europe.
John Lawler, Ford's Chief Financial Officer (CFO), stated, "There is a lack of a clear and definite policy agenda to advance electric vehicles in Europe and Germany."
Following the slowdown in electric vehicle growth, if the Trump administration, which will take office in January next year, abolishes the IRA electric vehicle tax credit benefit, the automotive industry is expected to face a double hardship. Earlier, U.S. media reported that the Trump transition team is considering abolishing the IRA electric vehicle tax credit to secure funding necessary to fulfill its tax cut promises.
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