Ford Employees Warn of Potential Strike at Two German Facilities
In the face of challenging market conditions, Ford is implementing a significant restructuring plan for its German operations. The automaker announced plans to cut about 2,900 jobs across its German business, a move that has sparked threats of a strike at two Ford plants in Cologne.
The restructuring efforts form part of a broader cost-cutting and adjustment plan aimed at improving profitability. Ford's financial update for Q2 2025 reveals a net loss of $36 million, primarily due to special charges and EV program cancellation costs. Despite this, the company expects an adjusted EBIT between $6.5 billion and $7.5 billion for the full year 2025, factoring in approximately $2 billion in tariff-related headwinds.
Ford's re-capitalization plan for its German Ford of Europe business unit includes a 14% reduction in overall staff numbers and additional investment. The company has agreed to inject $4.8 billion into its German unit, a decision that has caused protests from the German auto worker union, IG Metall, as it overrides a 2006 deal that Ford would cover the subsidiary's losses.
Labor representatives have insisted at each stage of talks that management find alternative measures to restructure its business. Despite these objections, Ford presses on with its plans, citing the slowing demand for battery-electric vehicles as a key factor. The need for job cuts is also being affected by the loss of government-backed buyer incentives for battery-electric vehicles in several countries.
Last week, plant workers voted in favor of industrial action. The Ford auto workers in Germany are planning to strike this week, a move that represents a broader pattern of labor unrest in Germany’s auto and supplier industries. Companies like ZF and Thyssenkrupp are also undergoing painful downsizing and restructuring.
The German auto industry is currently facing declining sales, supply chain issues, and economic challenges, leading to widespread job reductions in both OEMs and suppliers. The European Union's proposed ban on internal combustion engines has been a topic of discussion, with Mercedes-Benz calling for a rethink on the ban.
Other automakers, such as Mercedes-Benz and Stellantis, have also withdrawn their full-year financial forecasts due to the unsettled trading atmosphere caused by U.S. auto tariffs. The uncertainty surrounding vehicle exports due to these tariffs has led Ford to join other automakers in withdrawing its full-year financial forecast.
As Ford navigates these challenging times, it aims to find a balance between cost controls, operational shifts, and managing significant labor unrest. The company's re-capitalization plan is a crucial step in this process, but the potential for industrial action could further complicate matters.
The re-capitalization plan encompasses a 14% reduction in staff numbers and a $4.8 billion investment for Ford of Europe, which is part of the broader financial adjustment in response to the slowing demand for electric vehicles and the loss of government-backed incentives. Ford's aim in navigating these challenging times is to balance cost controls, operational shifts, and managing significant labor unrest, as strike action from its German auto workers could further complicate matters in the automotive industry facing declining sales, supply chain issues, and economic challenges.
