Ford of Europe was a success not so long ago, building great cars that customers loved in droves. It then decided to end production of some of those cars, most notably the Mondeo and Fiesta, to focus on crossovers and electric cars. It’s a bet that hasn’t paid off. Ford announced today it is cutting 4,000 jobs across Europe, mainly in Britain and Germany, representing about 14% of its workforce there.
The layoffs will be completed in 2027. In a press release, Ford said: “Of particular concern is the health of Ford’s passenger vehicles in Europe, where the company has suffered significant losses in recent years and where the industry’s move to electrified vehicles and new competition have been highly disruptive.”
It’s true that there are significant headwinds for automakers in Europe, with strict emissions regulations for internal combustion cars, regulatory uncertainty, lower-than-expected demand for electric cars and the disruptive rise of Chinese imports. But it is also true that Ford simply stopped production of popular models. Reuters reports that while new car sales across Europe fell 6.1% percent through September, Ford sales fell 17.9%. Without mainstays like the Fiesta, and soon the Focus, Ford will inevitably suffer.
Yet Ford is quick to place the blame elsewhere, at least publicly. As it notes in its press release, the company’s CFO John Lawler recently wrote a letter to the German government saying: “What we are missing in Europe and Germany is an unmistakable, clear policy agenda to promote e-mobility, such as public investments in charging infrastructure, meaningful incentives to help consumers make the switch to electrified vehicles, improving cost competitiveness for manufacturers and greater flexibility in meeting CO2 targets.”
That may be true, and Germany did end its EV incentive this year, but with Ford’s decline sharply outpacing the rest of the industry, the problems can’t all be external.
Ford will also reduce production targets for its latest European electric vehicles, the Capri and Explorer, both of which are built on Volkswagen’s MEB platform. The blue oval will soon also have an electric version of the popular Fiesta-based Puma crossover. But will that be enough to stop the bleeding? Especially as Europeans continue to buy small petrol and diesel cars?
Ford, for its own sake, needs to realize that many of its problems in Europe are of its own making.