The company said 2,300 positions in product development and administrative functions would be slashed in Germany, 1,300 in the UK and another 200 elsewhere in Europe over the next three years.

"These are difficult decisions, not taken lightly," said Martin Sander, general manager of Ford Model e in Europe.

"We recognize the uncertainty it creates for our team and I assure them we will be offering them our full support in the months ahead," Sander said.

The company said the decision was aimed at revitalizing its business in Europe and competing profitably with a new line-up of passenger vehicles.

"The company is taking action to restructure its business in Europe, creating a leaner, more competitive cost structure," Ford said.

The company said it was "responding to rapidly changing market conditions and a growing field of electric vehicle competitors entering the market."

The job cuts in Germany are lower than the 3,200 layoffs that the IG Metall union had expected in January.

The union expressed relief, saying the move "includes cost savings for the company and also safeguards its German sites."

But a union statement also warned the Ford case "shows that in an era of increasing digitalization and globalization, it is not just assembly and production jobs that could be relocated, but also those of highly qualified [workers]."

British union Unite said the job cuts in Britain were "another stark reminder that the shift to electrification needs a just transition that requires long-term investment and planning from automakers and a proper industrial strategy from government.

"That includes making sure electric vehicle batteries are built in the UK, along with a UK-based supply chain in electronic power drive systems and ensuring the domestic development and manufacture of autonomous driving systems," said a union statement, the PA news agency reported.

 

'Unapologetically American'

Ford said the job reductions would be done through voluntary departures and that it would maintain an engineering organization of around 3,400 roles in Europe focusing on vehicle design and development.

The US auto giant announced thousands of job cuts in the US and India in 2022.

Ford fell into the red in 2022 with a loss of US$2 billion.

Like its rivals, Ford has invested heavily in electric vehicles, unveiling emission-free versions of best-selling autos like the F-series pickup truck.

Ford said its plan to offer an all-electric fleet in Europe by 2035 was "unchanged."

"We are completely reinventing the Ford brand in Europe. Unapologetically American, outstanding design and connected services that will differentiate Ford and delight our customers in Europe," Sander said.

"We are ready to compete and win in Europe. Our first European-built electric passenger vehicle is being introduced this spring and will surely turn heads."

The European Union has agreed to ban sales of new petrol and diesel cars from 2035 as part of the 27-nation bloc's effort to build a carbon-neutral economy by 2050.

Electric car sales set a new market share record in the EU in 2022, accounting for 12.1 percent of new sales compared to 9.1 percent in 2021, according to industry figures.

 

Battery plant

In a separate development, Ford announced on Monday that it will build a new $3.5 billion battery plant in Michigan, diversifying its battery offerings with technology from a Chinese company as it boosts electric vehicle production.

Ford Chairman Bill Ford and other company brass joined Michigan Governor Gretchen Whitmer at an event to tout the venture, which involves a partnership with Chinese firm Contemporary Amperex Technology Co.

Whitmer, a Democrat, touted the announcement as "another win for Michigan," citing the addition of 2,500 new manufacturing jobs.

Ford had previously considered siting the factory in Virginia, but the idea was nixed by Republican Governor Glenn Youngkin in a move that was seen as a sign of Youngkin's ambitions to enter the 2024 Republican presidential race.

Ford said the Marshall, Michigan project, located about 160 kilometers west of Detroit, will diversify the company's battery profile away from its current exclusive use of nickel cobalt manganese (NCM), which are costly to produce because of raw material scarcity.

At Marshall, Ford will manufacture lithium iron phosphate batteries beginning in 2026. The technology involved less expensive raw materials and could tolerate more frequent and faster charging than NCM batteries, the company said.

Under the relationship with Contemporary Amperex, a wholly owned Ford subsidiary would manufacture the battery cells using lithium iron phosphate battery cell knowledge and services provided by Contemporary Amperex, Ford said.

The auto giant is targeting annual global output of 600,000 electric vehicles by end-2023 and two million by the end of 2026.

"Ford's electric vehicle lineup has generated huge demand," said Chief Executive Jim Farley.

He added that to get as many electric vehicles to customers as possible, Ford was the "first automaker to commit" to building both types of batteries in the US.