Ford warns of ‘significant’ job cuts as it picks Valencia for electric car plant

Ford has selected its Spanish plant to make battery cars and will cease vehicle production at a rival site in Germany as the carmaker reshuffles its European factories ahead of going all-electric in the region.

The US carmaker also plans “significant” staffing cuts, even at the Spanish plant in Valencia because electric cars need fewer staff to build them, it said on Wednesday.

Carmakers in Europe are shifting some factories to make electric vehicles as the region prepares to shift to selling only electric or hydrogen models.

Plants such as Ford’s German factory in Saarlouis that fail to secure electric car production face the risk of closure once the region switches.

Europe is set to phase out sales of petrol or diesel models by 2035 following a European parliament vote, though some countries such as Norway are moving earlier.

The US carmaker wants to switch all its cars to electric in the region by 2030, and vans by 2035.

Ford was choosing between Valencia and Saarlouis for the investment in the company’s in-house electric car technology.

The group has already announced it will make electric cars at Cologne in Germany using Volkswagen’s technology, and in Romania through a joint venture, and will make battery-powered vans in Turkey.

Wednesday’s decision means Saarlouis, which has 4,600 staff, is the only current Ford vehicle plant in the region that has not been allocated electric vehicles for the future.

Ford’s new in-house system will be used in factories globally, but the company expects to have only one European production centre for the vehicles that use the technology.

Ford’s European president Stuart Rowley said Ford was “seeking alternative opportunities . . . both in Ford and outside of Ford”, for the German site, but added that the US carmaker “does not have additional product at this point in time” to make at the site when the current car, the Ford Focus, ends production in 2025.

But even in Valencia, which has 6,000 staff, there will be a significant number of job reductions.

“We will need to restructure both of our plants in Saarlouis and Valencia to compete against existing incumbents and new competitors,” Rowley said. “We will require less employees to build new electric vehicles.”

Ford, which has roughly 40,000 staff in the region, has already cut 12,000 jobs across Europe as sales fall and the carmaker tries to increase its profit margins in one of the world’s most competitive auto markets.

Jim Farley, Ford chief executive, on Wednesday said: “The European auto industry is extremely competitive, and to thrive and grow we can never settle for less than unbelievably great products, a delightful customer experience, ultra-lean operations and a talented and motivated team.”