Ford is reportedly laying of thousands of workers from its payroll in Europe as it kick starts a major restructuring in the company to evolve better and profitable model in an industry increasingly leaning towards e-mobility. The company in the recent statement said that surplus labor will be reduced to undertake structural cost adjustments. It is also planning to close some plants in near future.
The company based in Dearborn, Michigan employees over 53,000 workers in its European production facility located at Cologne, Germany. The company in the statement did not disclose the exact number of job cuts but said that the company will negotiate with employee representatives and unions to ensure that voluntary departures occur. The move comes after the company announced in 2018 to reduce white collar jobs across the global expanse of the company.
The company is shifting to electric vehicles and is working out a more profitable business model. Every model form now onwards will have a battery version, with some dual models having both battery and internal combustion. Steven Armstrong, the company’s vice president of Europe, Africa and Middle East said that as Ford continues transition to e-mobility based model, it will optimize its human resources to look for more profitable models and by exiting from the less profitable ones.
Global automotive giants are facing challenges from a move towards autonomous and battery powered vehicles as well as transportation service providers like car-sharing and ride-hailing smartphone apps. Consumers are also leaning towards sport utility vehicles from the earlier preferences like hatchbacks and sedans. Ford has also remodeled its global operations buy exiting from sedan business in USA. Traditional automakers are forced to grapple with ground breaking technology changes, trade tensions and stricter environmental regulations.
The trend is not just limited to Ford Motor Company. The global slowdown in car sales is also seen in China which historically is a major contributor in fueling the industry’s growth. Auto sales in China fell for the first time in last two decades, this has raised concerns in the industry as well as markets.
General Motors in November 2018 announced that it would cut 14,000 white collar and factory jobs from its North American business, and has put five plant closures in waiting. Volkswagen reported an unspecified number of cuts in jobs as it moves towards electric car production. BBC reported that 5000 job reductions are expected by Tata Motors Ltd.