Dusseldorf The more than 40,000 Ford employees in Germany and other European locations need patience above all at the moment. It will probably only be clear next year whether and how things will continue in several vehicle and engine plants.
The worries are particularly great in Saarlouis, where the Focus compact model is currently still rolling off the production line. Capacity utilization of the factory is only guaranteed until spring 2025.
“From the product cycle, you have to say where you want to go much earlier,” said Ford Germany boss Gunnar Herrmann in an interview with the Handelsblatt. However, he did not want to be more specific.
Investment decisions in the automotive industry are very long-term. When production is phased out, the decision on a successor model has to be made a few years in advance. The Ford Focus will be built in Saarlouis until 2025. How it will continue after that is unclear.
Ford is currently not determining whether the plant in Saarlouis with around 5000 employees will even get a new model that would ensure its continued existence. The German Ford boss Hermann instead points out that the US company must also decide how things will proceed at several European engine locations. Saarlouis is only part of a larger overall concept. As it was also said in corporate circles, a decision about the factory in Saarland could not be made until next year at the earliest.
After 2026, internal combustion engines at Ford will gradually be phased out. From 2030 on, there will only be purely battery-electric cars in Europe. “We have to see that we consolidate sensibly,” said Hermann to the engine works. In Saarlouis, Ford is investing in the current Focus model, the car is now being renewed again.
Electric models go to Cologne
There is significantly more security for the approximately 5000 employees at the Ford assembly plant in Cologne. The small car Fiesta will be manufactured there for about two years until 2023. After that, the factory will get at least one new electric vehicle, which guarantees the future of the factory.
It is currently unclear whether further e-models will be added. For cost reasons alone, there is a lot to suggest that Cologne will very likely receive another e-model. Because car production in a high-wage location like Germany is only worthwhile with higher quantities.
The fact that the US parent company is investing around one billion euros in Cologne for the new electrical production is a success from the perspective of the German Ford management. “With this we have taken a decisive step,” added Hans Jörg Klein, Gunnar Hermann’s deputy in the Germany management team. The key foundation for this was laid with the renovation program that was started about two years ago.
The restructuring of Ford Europe also had its price: Around 10,000 jobs were cut at the European locations of the US group, around half of them in Germany. Ford hopes this will cut annual costs by about a billion dollars.
5000 employees currently work at the location of the US car manufacturer.
(Photo: obs)
An improvement is now clearly visible. “The past six quarters have been profitable in the core business”, Hermann summarized the effects of the European austerity program. Ford has thus created a “new basis for robustness” in Europe. In previous years, Ford’s European subsidiary had suffered billions in losses.
The Ford employees in Saarlouis, who fear for their jobs after 2025, are currently not helped by the success of the previous austerity program. In the internal competition for future models, the factory in southwest Germany does not have the best cards.
SUVs and cheap labor
The Saarlanders not only compete with Cologne, but also with other European locations. Major SUVs such as the Ford Kuga roll off the assembly line in Valencia, Spain. The US company is likely to keep this factory. The low wage costs alone speak in favor of the Ford plant in Craiova, Romania. In addition, some time ago Ford issued the motto of thinning out the model range with classic cars – which further reduces Saarlouis’ chances.
The switch to electric drive means that jobs are being lost in the entire automotive industry, including at Ford. However, completely new jobs are being created, such as in the production of battery cells. However, this effect will be limited in the case of the US carmaker’s European offshoot.
Because for the production of its first generation of European electric vehicles, Ford obtains the electric platforms from its Wolfsburg competitor Volkswagen – including the finished batteries. Ford has saved billions in development costs, but does not need its own cell production in Europe. In an initial contract, Volkswagen has guaranteed the delivery of 600,000 electric platforms for a new European Ford E-model. “But we could deliver more, even for a second model,” added VW in Wolfsburg.
Ford does not shy away from unpopular decisions itself. Ford announced its complete withdrawal from India just last week. Auto production in India will also be discontinued. The Americans consciously accept that this will cost two billion dollars. It is more important to them to withdraw permanently from India. A few months ago, Ford announced that it would also give up business in South America.
Lack of chips is a problem
In addition to the long-term strategic issues, the German Ford management has to deal with the consequences of the chip shortage. There were several weeks of production downtime this year in both Saarlouis and Cologne. Nobody at Ford really believes that the delivery gaps will end quickly. Gunnar Hermann can even imagine that the supply situation for semiconductors will remain tense until 2024.
“The semiconductor crisis is hailing our results,” said Germany Vice Hans Jörg Klein about the current situation. The US automaker is also seriously affected by the lack of chips at its European subsidiary. On the other hand, there is an exceptionally high order backlog. “We have a very healthy order bank and there is still strong demand,” Klein continued.
Gunnar Hermann can still see something positive about the semiconductor crisis. Before the implementation of the latest restructuring program, Ford would have been hit much harder by the lack of chips in Germany and Europe. But today the company is cushioning problems such as the chip supply. “We can simply deal with such risks much better,” emphasized the Ford Germany boss. A “certain normality” had been achieved.
More: Electric car subsidy madness: How the state wastes billions and slows down innovations
.