AutoBeta(AutoBeta.net)05/11 Report--

On May 10, it was reported online that Ford China began to lay off as many as 1300 people, and those who were laid off will be compensated in accordance with Ninten3.

In response to the news, Ford China responded: "China is a vital market for Ford, and our commitment to promoting the sustainable development of our business in China remains unchanged." At the same time, Ford China said it was building a more streamlined and flexible organizational structure, devoting resources to core businesses with advantages, and striving to achieve its business goals in China.

At present, Ford's development in the Chinese market is not going well. For the whole of 2022, Ford's sales in China fell 33.5 per cent to 496000 vehicles from a year earlier, while market share fell 0.3 per cent to 2.1 per cent year on year, with a loss before interest and tax of $572 million, according to the data. In this context, Ford China began to develop a new plan to reduce investment to improve profitability. "We will develop a less invested, leaner and more concentrated business in China, with a strategic focus on commercial vehicles, electric vehicles and exports," Ford CEO Jim Farley made clear on the earnings call.

In fact, this is not the first time Ford has reported layoffs. In February, Ford announced that it would cut 3800 jobs over the next three years in an effort to cut costs and remain competitive in the electric car market. According to previous reports by Automotive Industry concern, Ford's layoffs are mainly aimed at Europe, including Germany and the UK, and engineers and some managers. Of these, 2300 were laid off in Germany, accounting for about 12 per cent of the company's local workforce; 1300 in the UK, or about 1/5 of the company's local workforce, mostly at its research centre in Dunton, south-east England; and another 1300 will come from other parts of Europe. In response to the layoffs, Ford said the aim of the layoffs is to create a leaner and more competitive cost structure. In short, the layoffs are part of Ford's efforts to reduce costs as it promotes electrification.

A month earlier, there were media reports that Ford planned to cut about 3200 jobs in Europe, including as many as 2500 product development jobs and 700 executive positions, with Germany being the most affected. The layoffs will eliminate about 65 per cent of the carmaker's jobs in Europe, while Ford will also transfer some product development work to the US. However, Ford officials did not respond to the news at the time.

In fact, under the background that electrification has become a major trend of automobile development in the future, the demand for personnel in vehicle R & D and manufacturing has also changed obviously, and layoffs are not uncommon in the automobile industry. In April, Stellantis plans to lay off about 3500 hourly workers in the United States and offer voluntary severance programs, including $50000 to workers hired before 2007. GM laid off hundreds of contract workers at the Global Technology Center in Warren and elsewhere in early May with a view to cutting its budget by $2 billion by the end of next year. On May 4th Volvo announced plans to cut 1300 jobs in Sweden and will continue to cut jobs in the future, also to cut costs.

It was previously reported that Ford is spending 50 billion dollars to accelerate its electric transformation, which is relatively easy to build compared to traditional fuel cars, does not require too many engineers, and layoffs could help Ford revive its European operations. Ford's cumulative revenue in the first quarter of 2023 was $41.5 billion, up 20 per cent from a year earlier, according to the latest earnings figures.

Automobile manufacturing is a project whose investment cost is relatively high but it is difficult to get a return in the short term. at present, the automobile market is in a critical stage of transition to new energy vehicles, and in the predicament of transformation, many automakers choose to lay off staff or to increase revenue and reduce expenditure. "Automotive Industry concern" believes that with the change of the electrification pattern of the domestic car market, the life of the joint venture brand with relatively slow electrification transformation in the Chinese market will become more and more difficult.

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