Ford Motor Company (NYSE:F) will cut up to 3,200 jobs in Europe as part of a shift to US-based product development and a price war sparked by electric vehicle (EV) competitor Tesla.
Most cuts will be centred around its German plants, but UK and Belgian sites could also be targeted, with as many as 65% of its European jobs under threat, according to IG Metall union.
Job cuts come as Ford looks to slash costs and become “more competitive” in the worsening economic environment, suggested a company spokesperson to Reuters.
Added pressure has come from Tesla’s recent decision to lower the prices of several of its vehicles, including its Model 3 and Y cars, by up to 20% in the US and Europe and 24% in China.
“This was both a defensive and offensive move,” said Wedbush analyst Daniel Ives, “to defend its EV turf and gain a competitive edge, especially in key markets”.
With the move putting “pressure on all competitors,” according to UBS analyst Patrick Hummel, Ford will be among those prompted to react, as it increases EV output to meet a 2035 European net zero target.
Incentives in the US also aim to attract EV manufacturers across the Atlantic, especially through August’s Inflation Reduction Act.
Under the act, the US government scrapped a 200,000-unit per year cap on EV production for manufacturers, while also offering tax breaks to customers aimed at bolstering domestic production.
To qualify, EV producers must build cars in North America and source 40% of battery components there.
Ford added it had told its German wing about the plans "as far back as October," suggesting it needed "to further improve performance in Europe and elsewhere".