Ford will cut 5000 jobs nationwide
Author: Mario Schmidtgen
Plant in Cologne particularly affected
Ford plans to cut 5,000 jobs at its German plants. The carmaker announced this in a letter to all employees on Friday afternoon. “For Ford’s plants, this means structural cost savings of at least 500 million euros and thus a streamlining of the entire organizational structure. “In Germany, this is accompanied by a personnel reduction of more than 5,000 jobs (including temporary workers)” according to the mail.
The letter comes from Ford Germany boss Gunnar Herrmann and managing director Rainer Ludwig. It also states that employees will be offered severance payments and early retirement at all three Ford locations in Germany. “We have to see how the programs are accepted,” said a company spokesman.
Cologne most affected
A total of around 24,000 employees work for Ford in Germany. 6,000 are employed in Saarlouis, around 18,000 in Cologne and 200 in Aachen. There are also temporary workers but the exact number of them is unclear. The job cuts affect the core workforce and temporary workers.
Ford did not announce at which location most of the jobs would be cut. It depends on how many employees accept the severance pay and leave the company voluntarily. However, the Cologne plant is expected to be most affected.
Implementation of the savings program
According to the company spokesman, the aim now is to pursue the restructuring program initiated in January in order to “return to profitable business in Europe as quickly as possible”.
According to a letter from the management to the employees, a total of 500 million US dollars shall be saved. Operational terminations will be avoided. Employees who are up to 49 years old are supposed to receive severance pay and employees over 50 years old are supposed to receive early retirement.
Difficulties in European business
Business in Europe has not been going well for Ford for quite some time. Costs are relatively high and sales are not going well enough. In the past fiscal year, an operating loss (EBIT) of around 400 million dollars was generated in Europe. Furthermore, the number of vehicles in the European trade dropped by around three percent to 1.533 million.
According to employee representatives, management is mainly to blame for the current situation. European works council member Martin Hennig accused the management of structural mistakes. In addition, it is unfair that Ford has to pay more money to suppliers in Europe than in the USA.
Withdrawal from Europe possible?
Experts in the automotive industry have already predicted hard cuts. “That was to be expected,” commented Ferdinand Dudenhöffer of the University of Duisburg-Essen.
However, he doubted that Ford would return to profitability as a result of the job cuts. “It may be that this is not the end of the line yet”. It is possible that the car manufacturer will withdraw completely from Europe and sell the business. However, this is also critical, as there are no brand rights to sell on the Ford brand.