Ford jobs on the line as China’s BYD circles German factory

Berlin — Ford will decide by mid-February how many jobs to cut in Europe, a union representative said on Tuesday, as reports surfaced that China’s BYD was in talks with Ford to buy one of the US carmaker’s German sites.

The future of the site in Saarlouis, a city in the German state of Saarland, has been unclear since last June when Ford picked a site in Spain to assemble its next-generation electric vehicle (EV) over the German plant, which will stop producing its current model, the Ford Focus, from 2025.

The Wall Street Journal reported on Tuesday that Ford officials were travelling to China next week to visit BYD and discuss selling the site to the Chinese EV maker, citing sources familiar with the matter.

Ford said it was in discussions with potential buyers, but declined to comment whether BYD was among them. BYD could not immediately be reached for comment.

Ford and the regional government of Saarland agreed last September to co-operate on finding new investors for the plant, with a final decision on a buyer to be approved by both parties.

Saarland’s regional economy minister Juergen Barke said in December 15 buyers were interested, without providing detail. A spokesperson for the ministry declined to comment on negotiations.

BYD, the world’s biggest seller of battery electric vehicles (BEVs) and plug-in hybrids in 2022, said in October it was looking to produce EVs in Europe, where it makes only electric buses at a plant in Hungary.

It sells three Chinese-made cars in a handful of European markets and said last November it plans to add more models and markets this year, one of numerous Chinese brands targeting Europe's growing EV market.

Separately, union representatives for Ford’s largest German site in Cologne will meet Ford’s management on Saturday to negotiate on planned job cuts across Europe announced by management to workers on Monday.

Management figures presented a worst-case scenario to 12,000 workers in a packed assembly hall of up to 2,500 job cuts in product development and a further 700 in administration. A second scenario was also on the table, the spokesperson said, declining to provide details.

Ford has declined to comment on the planned cuts, referring to a January 20 statement in which it said that the shift to EV production requires structural changes and it would not say more until plans are finalised.

The carmaker has committed to an all-electric line-up in Europe by 2030 and its US leadership has repeatedly flagged that EVs require less labour.

Its European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6% operating margin in the region, a goal thrown off course by the coronavirus pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales.

The workers’ council in Cologne has demanded that management commit to no layoffs before December 31, and that the 2,500 product development staff there remain part of the carmaker’s global development landscape.

Reuters