Ford plans to lay off 4 more employees due to challenges in the electric transition. The lack of incentives and infrastructure are obstacles to electric mobility in the global market.
Amidst a global scenario of uncertainty, the Ford announced a new round of cuts to its workforce in Europe, intensifying a downturn that reflects the challenges faced in the transition to electric vehicles.
Around 4 jobs will be eliminated by 2027, mainly in its operations in Germany and the United Kingdom.
The decision, which has already provoked reactions from unions and governments, highlights the impact of the slowdown in the electric automotive market, a trend that has also led to landmark decisions in other parts of the world.
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This news brings back painful memories in Brazil, where, in 2021, Ford closed its industrial operations.
More than 5 workers lost their jobs directly, while thousands of indirect jobs were eliminated. This movement marked one of the biggest industrial downturns in the country's recent history.
Why is Ford cutting jobs in Europe?
The cuts announced by Ford account for 14% of its workforce in Europe.
According to the company, the decision is a response to the need to reevaluate its strategy in the electricity market, which faces obstacles such as the lack of recharging infrastructure, reduced government incentives and broad economic challenges.
In Cologne, Germany, the automaker has already confirmed the reduction in production of electric models, such as the Explorer and Capri.
According to John Lawler, the company's vice president and chief financial officer, the transition to electric vehicles requires more robust support from governments.
“What is missing in Europe and Germany is a clear and effective political agenda to drive e-mobility,” said Lawler.
He also highlighted the need for more public investment in infrastructure, as well as significant tax incentives to accelerate the adoption of electric vehicles.
The impact on the electric vehicle market
Since 2021, Ford has committed to dramatically overhauling its European operations, with the goal of becoming nearly all-electric by 2030.
However, the global automotive market has shown signs of slowing down, with competitors such as Volkswagen and Stellantis issuing profit warnings and revised targets.
The slowdown in electric vehicle sales also reflects a shift in consumer behavior, which faces high inflation and rising interest rates.
Furthermore, governments' withdrawal of subsidies for the purchase of electric vehicles is directly affecting automakers' projections.
Ford's exit from Brazil: a wound still open
Although the current focus is on Europe, the decision rekindles memories of Ford's exit from Brazil, which occurred in January 2021.
After more than 100 years of operating in the country, the automaker closed its factories in Camaçari (BA), Taubaté (SP) and Horizonte (CE), closing its industrial operations and profoundly impacting the local economy.
Around 5 thousand direct jobs were lost, in addition to thousands of indirect vacancies.
The cities that housed the factories suffered major economic shocks, with supplier companies declaring bankruptcy and the population facing high unemployment rates.
The reason given by Ford was the need to redirect investments to more profitable markets, especially in the electricity sector.
However, the departure was also seen as a reflection of the difficulties faced by the Brazilian industrial sector, such as high tax burden and inadequate infrastructure.
An uncertain future for the electric transition
Despite the challenges, Ford remains committed to electrifying its fleet.
However, the automaker's steps have been more cautious, reflecting a reality that affects the global automotive sector.
The European Union and the United Kingdom have tightened their CO2 emissions reduction targets, requiring carmakers to make an additional effort to produce cleaner vehicles.
However, experts point out that, Without robust charging infrastructure and consistent incentives, the transition to electric vehicles may be slower than expected.
Reflections for Brazil and the global market
Ford's decision to continue adjusting its operations in Europe also has lessons for Brazil.
While the country is still dealing with the economic impacts of the automaker's exit, the domestic automotive market is facing similar difficulties, such as the need for incentives for more sustainable vehicles and an infrastructure that supports the transition to new technologies.
The Ford case highlights the complexity of adapting to a changing industry, where local and global decisions are intertwined.
And you, do you think Ford's exit from Brazil was a strategic decision or a mistake? How do you assess the impact of mass layoffs on the global industry?