German Unions Threaten Europe-Wide Disruption as Ford Motor Says 3,200 People Will be Laid Off

US carmaker Ford Motor is planning to trim as many as 3,200 jobs across Europe, according to reports. The carmaker will also move some product development jobs back to the United States, reports say, even as thousands of jobs in industries spanning technology, retail and finance have been lost in the last several months.

Ford shares rose nearly 4 percent on the back of the layoff announcement.

Ford logo
Ford logo Pixabay

Mostly Affect German Workers

The job cuts will mostly affect German workers. Reuters, citing trade unions, reported that as many as 2,500 jobs in product development and around 700 in administrative positions will be gone across German locations.

German trade unions have sounded a harsh warning to Ford, which had announced a $2 billion investment in the Cologne plant just two years ago. The IG Metall union said it would take action if the talks with the management fails and Ford goes ahead with the European job cuts.

Shift to Electric Vehicles

"If negotiations between the works council and management in coming weeks do not ensure the future of workers, we will join the process ... We will not hold back from measures that could seriously impact the company, not just in Germany but Europe-wide," IG Metall said, according to Reuters.

A Ford spokesperson in Michigan said the talks with German unions are ongoing but stressed that the automaker must remain more competitive as it pushes on with the transitions to electric vehicles.

Ford plant in Cologne
Ford plant in Cologne Wikimedia Commons

Ford's Cologne site employs about 14,000 people. The development centre in the Merkenich area alone employs around 3,800 people. Across Europe, the carmaker employs about 45,000 people. Ford Europe makes and sells vehicles in as many as 50 markets.

The job cuts come at a time when Ford is facing stiff challenges in the electric vehicles segment, owing to rising costs for battery materials and increasing competition. The aggressive price cuts announced by market leader Tesla have also affected the margin outlook of many of the carmakers.

According to Ford, the move to produce more electric cars will require structural changes. Ford's $2 billion investment in the Cologne plant is aimed at producing more all-electric models for the European markets.