Ford to reassign 400 Bronco plant workers, cut 4,000 jobs in Europe

Posted by Admin November 20, 2024 Infra

Ford Motor Co. on Wednesday said it’s reassigning about 400 workers to other southeast Michigan plants for reduced production at its Bronco plant in Wayne and is reducing its workforce by 4,000 in Europe by the end of 2027.

Although Bronco SUV sales were up 105% year-over-year in October, deliveries are down 10% overall in 2024. The transfers from Michigan Assembly Plant in Wayne that employs nearly 6,000 people will happen over the course of the first quarter of 2025, spokesperson Lars Weborg said. United Auto Workers-represented employees first will apply by seniority to take transfers to Dearborn Engine Plant, Monroe Parts Depot and other locations.

“We are adjusting production to best serve our customers,” Weborg said in a statement. “We are encouraged by the momentum heading into the end of the year, which, along with this production adjustment, should further balance inventory of model year 24 vehicles as we head into the launch of model year 25.”

Michigan Assembly, which also builds the midsize Ranger truck, will be down the first two weeks in January to prepare for the model-year changeover. The plant will retain the third crew it added earlier this year when it moved the Dearborn Electric Vehicle Center to one shift.

Automotive News first reported the reduction at the Bronco plant.

In Europe, the workforce reduction are resulting from pressure created by the economy, increased competition and underperforming sales of electric vehicles, the transition to which is disrupting the industry as Chinese rivals push deeper into the market there.

The Dearborn automaker has emphasized its need to reduce costs across its business to be competitive. A $2 billion annual reduction in costs for materials, manufacturing, freight and labor remained insufficient for covering product-freshening, inflation at the company’s joint venture in Turkey and warranty costs, contributing to a 25% decrease in net income in the third quarter alongside a charge for canceling an electric three-row SUV program.

“We’re going to be aggressive in restructuring where we see the need to do so,” Chief Financial Officer John Lawler said during the Barclays Global Auto and Mobility Conference about the workforce reductions.

Most of the job cuts will be in Germany and the United Kingdom. They will occur in conjunction with talks with employee representatives, according to Ford. It also will decrease production hours for workers at its Cologne, Germany, plant. It makes the Capri and Explorer EVs there.

Lawler said previous restructuring in Europe, India and South America have contributed to a positive free cash flow position. He expects the layoffs will create larger margins and lower capital expenditures. Ford is projecting its annual adjusted operating earnings will come in around $10 billion for 2024.

“It is critical to take difficult but decisive action,” Dave Johnston, Ford’s European vice president for transformation and partnerships, said in a statement, “to ensure Ford’s future competitiveness in Europe.”

The situation particularly is “intense” in Europe, according to a news release, resulting from increased competition from new Chinese-subsidized vehicle entries, economic headwinds and “misalignment” between regulations seeking to reduce carbon dioxide emissions and lack of consumer demand for EVs.

A new lower limit for fleet average carbon dioxide emissions takes effect in 2025 in Europe. Inflation and Germany’s elimination of consumer subsidies for EV purchases have produced headwinds against increased EV sales. With even lower emissions limits set for 2026, the European Automobiles Manufacturers’ Association, a trade group for the industry, has urged that a review of those rules take place quickly.

“What we lack in Europe and Germany,” Lawler said in a statement, “is an unmistakable, clear policy agenda to advance emobility, such as public investments in charging infrastructure, meaningful incentives to help consumers make the shift to electrified vehicles, improving cost competitiveness for manufacturers, and greater flexibility in meeting CO2 compliance targets.”

Ford shares were falling 3% to $10.70 on Wednesday afternoon.

There are continued worries about the pain Ford is seeing, not just in Europe, but in the United States, as well. President-elect Donald Trump has suggested the up-to-$7,500 plug-in vehicle tax credit could on the chopping block, and Tesla Inc. CEO Elon Musk could play a large decision-making role in the administration.

“They need to make proactive cuts,” said Daniel Ives, analyst at financial services firm Wedbush Securities Inc., “because it’s going to be tough sledding in the six to 12 months in Europe. Ford is not alone. They’re seeing the same headwinds as many others. Unfortunately, they need to rip the Band-Aid off.”

Ford this year also cut its F-150 Lightning plant in Dearborn to a one-shift operation in April, a move affecting 1,400 jobs, with about 700 workers transferring to Michigan Assembly. The EV plant on Friday began idling and will continue to do so into the new year as the company seeks to prioritize profitability over sales on the money-losing Lightning.

Other automakers also have made job cuts in recent months. General Motors Co. on Friday said it was laying off 1,000 people, including hourly and salaried in various departments globally, with a majority working out of the Detroit automaker’s Global Technical Center in Warren. GM in August also laid off more than 1,000 salaried employees working in its software and services organization.

This fall, Stellantis has cut, or made plans to cut, nearly 4,000 factory jobs in southeast Michigan and Toledo, Ohio, as the struggling automaker looks to trim costs and deal with falling sales of several key models. It also has sought to reduce its white-collar workforce, efforts this year that included buyouts and the layoff of about 400 engineering and software employees in March.

Nissan Motor Co. Ltd. earlier this month said it planned to cut 9,000 jobs and reduce capacity by a fifth to cut costs after sales declines in China, Japan and North America.

Rivian Automotive Inc., the California-based EV maker, has ordered multiple layoffs this year, including a 10% reduction in its workforce in February. The moves were made to “right-size the business,” a company spokesperson said after it laid off about 1% of the workforce in April.

German automaker Volkswagen AG, after struggling with its business in China and Europe, in late October said it plans to close at least three plants in Germany.

Musk said in April that Tesla, the Texas-based EV maker, would cut more than 10% of its global workforce.

bnoble@detroitnews.com

@BreanaCNoble

Staff Writer Kalea Hall contributed.