Cologne Site inauguration with the character of a state ceremony: On Monday, the US car manufacturer Ford ceremonially opened its “Cologne Electric Vehicle Center” in Cologne. In front of the US car manufacturer’s workforce in Cologne, Chancellor Olaf Scholz (SPD) spoke of a “new era” for Ford in Cologne and praised the largest investment in the company’s history.
Ford has invested two billion US dollars in the plant. This is “good news for car production in Germany, for e-mobility and the awakening,” praised Scholz.
Company founder-great-grandson Bill Ford also spoke in Cologne of the “beginning of a new generation of clean production processes and electric vehicles in Europe”. While other US automakers said goodbye to Europe, Ford is committed to the location. Bill Ford was alluding to the withdrawal of General Motors, GM had sold its German subsidiary Opel to Stellantis in 2017.
The prominent visitor and the big words show that there is a lot at stake for Ford in Cologne. As early as 1930, entrepreneur Henry Ford and later Chancellor Konrad Adenauer, who was still the mayor of Cologne at the time, laid the foundation stone for the factory. Since then, almost 18 million cars have rolled off the assembly line at the site. Alongside Opel and VW, Ford has become the most important mass producer in the German car market. But things have been going downhill since the turn of the millennium – most recently Ford manufactured the Fiesta, a small combustion engine car, in the Niehl district.
Ford Europe is being rebuilt
But that is over now. With the “EV Center”, Ford is officially starting the transformation towards electromobility in Europe. The plant in the north of Cologne is the first of the US carmaker on the continent to exclusively produce electric cars. “Ford has great ambitions in the direction of e-mobility worldwide. In Europe in particular, however, the transformation is late,” says Stefan Bratzel, head of the Center of Automotive Management (CAM) in Bergisch Gladbach.
The prominent visitor and the big words show that there is a lot at stake for Ford in Cologne.
(Photo: dpa)
The plan for the future sounds all the more ambitious. According to this, Ford only wants to sell electric cars by 2030, and by 2024 the Americans want to have nine electric models, including vans, on the market. In Cologne, two pure Stromer are to be built in the near future.
Ford presented the first model, the all-electric compact SUV Explorer, in Cologne in March. Base price: less than 45,000 euros. Another electric model is planned for the site in 2024.
“Ford is in a very difficult position in Europe in the car business,” says auto expert Ferdinand Dudenhöffer. From January to April, the market share in the EU was less than four percent. In 2020 it was still a good seven percent. Experts see four major challenges.
1. The economy
Ford is one of the few automakers that treats its electronics business like a startup and reports results separately. The company wants to achieve an electromobility margin of eight percent by 2025. The carmaker is still making significant losses with its electric vehicles. In the first quarter alone, the drop in what Ford called “Model E” totaled $722 million worldwide.
Ford’s new electric explorer shows where the manufacturer is headed in Europe and with the new “EV Center”: The car looks beefier and more American than previous Fords from Europe.
>> Read about this: Ford discloses billions lost with electric cars – German manufacturers give little insight
Behind the step to become more American and thus larger in construction, there are also economic constraints. Because the compact class, once Ford’s hobbyhorse, can hardly be brought into the profit zone electrically at the moment. “Ford must therefore ensure that it is not crushed in its sandwich position between players like Stellantis and VW,” says Dudenhöffer.
2. Technological development
“Ford is getting an increasingly realistic view of its own possibilities in e-mobility,” says CAM manager Bratzel. In Ford’s case, that means you don’t necessarily have to do everything yourself. Only recently did the US automaker in America announce an alliance with Tesla for the charging infrastructure. The “Supercharger” network is a key reason for many Tesla customers to buy.
Ford is also entering into partnerships in Europe. The technical platform of the Elektro-Explorer is based on Volkswagen’s MEB modular electrical construction kit.
The procedure is considered indispensable by industry experts in order to quickly get a foot on the ground in electromobility. But it also harbors dangers. “The downside is that Ford currently still has very little value creation to fall back on when it comes to key technologies in the electromobility sector,” says Bratzel. Here Bratzel expects new impulses from the new “EV Center” in Cologne.
>> Read also: This SUV is intended to initiate Ford’s electric offensive – with the help of VW
Germany and Europe boss Martin Sander remained quite general with his announcements about the new electrical center on Monday. It will redefine car production, he said, and “use advanced technologies to build fully connected, software-defined vehicles.”
But he made a clear commitment towards his own vehicle platform. This is developed globally at Ford in America and adapted for Europe. However, Sander did not say when the first car with this new platform will be launched.
3. The employee side
Car expert Dudenhöffer evaluates cooperations like the one with VW as a “pragmatic solution for Ford”. However, for the production capacities and the locations “it is a very risky journey”.
In Europe, Ford has been on the back burner for some time. Recently there was speculation about a sale of the Saarland Ford plant to the Chinese competitor BYD. According to a report by the Bloomberg news agency, Ford is in advanced talks with a total of three bidders, including BYD.
In Saarlouis, Ford is currently still producing the Focus with around 4,600 employees; the model is to be scrapped in 2025. Most recently, Ford announced major job cuts in Europe in February, German locations are also affected.
4. The customer orientation
European boss Sander said at the opening of the EV center in Niehl that they wanted to produce in Europe for their European customers. From the point of view of car expert Bratzel, the decisive factor is how many Europe-specific equipment and developments the “EV Center” brings into the cars. Otherwise, differentiation from the US models would be difficult for Ford.
Ferdinand Dudenhöffer sees another point. Ford is actually better known for the small and compact segment in Europe. The fact that the larger US models are now being adapted for Europe could “lead to disappointment among previous Ford customers”. At 45,000 euros, the Explorer is also priced higher than previous bestsellers such as the Fiesta and Focus.
The start of the electric Puma should therefore be interesting. The small SUV is comparable in size to the Fiesta and is scheduled to be produced in Romania in 2024 as the battery-electric successor.
More: Ford is cutting 12 percent of its jobs in Germany.