Ford to Cut Up to 1,000 Jobs in Cologne Amid Electric Vehicle Demand Struggles

Ford Motor Company has announced plans to reduce its workforce in Cologne by up to 1,000 positions, reflecting ongoing challenges in the demand for electric vehicles. Despite significant investments to transition its Cologne facility for electric vehicle production, the company is facing a downturn in sales for models like the Explorer and Puma Gen E.

Since 1930, Ford has been a key player in the Cologne automotive industry. In recent years, the company allocated substantial resources to modernize its plant to support the production of electric vehicles. However, the anticipated demand for models such as the Explorer and Capri has not materialized as expected, prompting Ford to intensify its cost-cutting measures.

Earlier this year, Ford transitioned from a two-shift operation to a single-shift model at the Cologne plant. This decision followed a previous cost-saving plan that resulted in protests and the first strike in the history of Ford's Cologne operations. Recently, employees accepted this cost-cutting initiative, which aims to eliminate a total of 2,900 jobs by the end of 2027 across various departments, including administration and development.

The current announcement extends the job cuts to include up to 1,000 additional positions, but the exact number remains uncertain. Ford expects to engage with employees regarding voluntary departures, offering severance packages and opportunities for early retirement. The terms for these voluntary exits will mirror those established in the initial cost reduction plan.

The company has indicated that the reduction in workforce is necessary due to a significant gap between actual demand for electric vehicles in Europe and earlier industry forecasts. When Ford invested billions into the Cologne plant, it anticipated that electric vehicles would constitute 35% of total automotive sales by 2023. Currently, that figure stands at approximately 18%, according to the Federal Motor Transport Authority (KBA).

Ford's substantial investment of nearly two billion euros in converting the Cologne plant to electric vehicle production was initially met with optimism among employees, who believed in the site's future potential beyond the era of internal combustion engines. High-profile politicians, including the former Chancellor and the Minister-President of North Rhine-Westphalia, expressed support during the plant's modernization launch.

However, the start of electric vehicle production was marred by challenges, notably the government's withdrawal of incentives for electric vehicle purchases, which led to a sharp decline in consumer interest. The company launched the Explorer and Capri models during this downturn, with base prices set around EUR40,000 and EUR36,900, respectively. These prices have resulted in customer dissatisfaction, especially among those relying on company vehicles for tax purposes.

From January to August, approximately 74,000 Ford vehicles were registered in Germany, with around 20,000 being electric models. This includes vehicles produced outside of Cologne. While Ford's market share in Germany increased from 3% to 4.5% in recent months, the company acknowledges that growth has not been rapid enough to justify its current workforce levels. As a result, Ford has implemented short work schedules in its production facilities and is now pursuing permanent job reductions as part of its restructuring efforts.