Ford to make call on Europe job cuts by mid-Feb as buyers circle German site

Published On : 01/25/2023

By Victoria Waldersee and Christina Amann

BERLIN (Reuters) -Ford will decide by mid-February how many jobs to cut in Europe a German union said on Tuesday, as reports surfaced that China’s BYD was one of 15 investors interested in buying the U.S. carmaker’s site in Saarlouis, Germany.

The future of the Saarlouis site has been unclear since last June when Ford picked a site in Spain to assemble its next-generation electric vehicle (EV) over the German plant, which will stop producing its current model, the Ford Focus, from 2025.

The Wall Street Journal reported on Tuesday that Ford officials were travelling to China next week to visit BYD and discuss selling the site to the Chinese EV maker, citing sources familiar with the matter.

BYD and Ford declined to comment. A spokesperson for the regional economy ministry, which is cooperating with Ford on finding a new investor, also declined to comment on a possible BYD bid, as did the chief of the workers council at the Saarlouis plant.

It is of secondary importance which continent a possible investor comes from – if a carmaker comes, that’s what we would like to see, because it’s what we do,” works council chief Markus Thal said to Reuters.

Negotiations with possible investors – including companies in energy and car assembly as well as original equipment manufacturers (OEMs) – had accelerated in recent months and the carmaker aimed to present a solution for the future of the plant by the end of the first quarter, Thal said.

We need a plan urgently,” he added, saying workers would not wait until 2024 for a solution.

BYD, the world’s biggest seller of BEVs and plug-in hybrids in 2022, told Reuters in October it was looking to produce electric cars in Europe, where it currently only makes electric buses at a plant in Hungary.

It sells three Chinese-made cars in a handful of European markets and said last November it plans to add more models and markets this year, one of numerous Chinese brands targeting Europe’s growing EV market.

Separately, union representatives for Ford’s largest German site in Cologne will meet with Ford’s management on Saturday to negotiate on planned job cuts across Europe announced by management to workers on Monday.

Management figures presented a worst-case scenario to 12,000 workers in a packed assembly hall of up to 2,500 job cuts in product development and a further 700 in administration.

A second scenario was also on the table, the union spokesperson said, declining to provide details.

Ford has declined to comment on the planned cuts, referring to a Jan. 20 statement in which it said that the shift to EV production requires structural changes and it would not say more until plans are finalised.

The carmaker has committed to an all-electric lineup in Europe by 2030 and its U.S. leadership has repeatedly flagged that EVs require less labour.

Its European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6% operating margin in the region, a goal thrown off course by the coronavirus pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales.

The workers council in Cologne has demanded that management commit to no layoffs before Dec. 31 of 2032, and that the roughly 2,500 product development staff there remain part of the automaker’s global development landscape.

(Reporting by Victoria Waldersee and Christina Amann; Editing by Paul Carrel, Alexander Smith and Andrea Ricci)

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