AutoBeta(AutoBeta.net)11/21 Report--

On Nov. 20, local time, Ford plans to cut 4000 employees in Europe, accounting for 2.3 per cent of the world's 174000 employees. Ford said the job cuts were mainly due to industry turmoil, including weak demand for electric cars, lack of government support and pressure from Chinese competitors.

It is understood that Ford's layoffs are mainly concentrated in the UK and Germany, and plan to complete the layoffs by 2027, but still need to negotiate with the unions. Among them, Ford plans to cut about 2900 jobs in Germany and about 800 in the UK.

In the UK, Ford operates an engine factory in Dagenham and a gearbox factory in Halliwood. In Germany, Ford has two car production plants, of which the Cologne plant is crucial to Ford's business in Europe, which mainly produces Explorer and Capri and is expected to produce the upcoming electric Mustang. Ford currently has about 11500 jobs in Cologne, which means about 1/4 of Ford jobs are likely to be cut, according to the labor commission.

After entering 2024, the competition in the European automobile market is becoming more and more fierce, and the rise of electric cars makes traditional automakers feel great pressure. In order to cope with this change, Ford has to make strategic adjustments, and layoffs are one of the fastest and most effective measures. Although layoffs are out of the needs of the development of the company, it is undoubtedly a heavy blow to employees. After Ford announced the layoffs, the labor board and trade unions protested.

On October 29th, Ford released its results for the third quarter of 2024, which exceeded market expectations, but the company's share price fell more than 8% after the results were released, wiping out more than $3.8 billion in market value. Ford reported third-quarter revenue of $46.2 billion, up 5.5 per cent from a year earlier, while net profit fell 25.6 per cent to $892 million.

Ford motor business is composed of Ford Pro, Ford Blue and Ford Model e, corresponding to commercial vehicle business, passenger vehicle business and electric vehicle business, respectively. Ford fuel vehicles still show a strong market drive, with a profit before interest and tax of $1.6 billion in the third quarter, which is the main source of profit for Ford. Ford Model e's performance is worrying. The division still lost $1.2 billion before interest and tax in the third quarter. Faced with severe challenges. In other words, while Ford remains competitive in the commercial and fuel vehicle markets, overall performance will be difficult to improve if the problems in the electric vehicle division are not addressed.

Based on this, Ford lowered its profit forecast for 2024 and expected adjusted earnings before interest and tax of about $10 billion, down from the previous forecast of $12 billion. Of this total, full-year profit before interest and tax for Ford Pro is expected to reach $9 billion, Ford Blue is expected to be $5 billion, and Ford Model e is expected to have a full-year loss of $5 billion.

At present, foreign fuel car brands have lost their resistance in the new energy era. Ford's layoffs in Europe are just a microcosm of the industry, after Volkswagen, Stellantis, Nissan and Audi announced that they would cut a total of more than 16000 jobs worldwide in the next few months, of which Nissan will cut 9000 jobs worldwide, Stellantis will cut 2600 jobs in the United States and Spain, and Audi will cut 4500 jobs in Germany. In addition to carmakers, auto parts giants are also cutting jobs, including Bosch, Schaeffler and ZF.

With the difficulty of electrified transformation and the decline of automobile consumer demand, automobile enterprises and spare parts enterprises have to adjust their strategies and optimize their internal organizational structure in order to improve efficiency and reduce costs. layoffs are a direct and effective means to increase efficiency and reduce costs. Next, with Chinese car companies going out to sea, if multinational manufacturers fail to turn around in the electric vehicle business, production cuts, shutdowns, and bankruptcy may become the norm in the industry.

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