Ford Germany Secures Financial Aid from U.S. Headquarters

Ford Germany is set to receive financial assistance from its parent company in the United States due to sluggish business performance. This support aims to grant the German division greater financial independence.

The initiative involves a capital infusion of up to EUR4.4 billion, intended to significantly reduce the company's debt, which currently stands at EUR5.8 billion. Additionally, several hundred million euros will be allocated over the next four years to enhance operational efficiency.

As part of this strategy, Ford Germany will assume more financial responsibility, which results in the withdrawal of a guarantee from 2006 that ensured the parent company would cover the debts of its German subsidiary.

Despite a substantial investment of nearly EUR2 billion to upgrade its Cologne facility for electric vehicle production, Ford Germany has faced disappointing sales figures for its electric models, the Explorer and Mustang. The anticipated sales have not materialized, and efforts to improve production efficiency using technology from Volkswagen have not yielded the expected results.

To further streamline operations, Ford plans to reduce its workforce in Germany, with plans to cut 2,900 jobs by the end of 2027, primarily at its Cologne site. Across Europe, Ford is aiming to eliminate a total of 4,000 positions, including 800 in the UK and 300 in other EU countries. Currently, Ford employs around 12,000 people in Cologne and nearly 15,000 across Germany.

In announcing this restructuring plan, Ford emphasized that the financial assistance from the U.S. headquarters will not only help with immediate needs but will also bolster competitiveness through a revamped product lineup.