As part of the Ford Motor Company’s pivot towards electric vehicle (EV) production, it has announced job cuts across Europe. However, a disproportionate number are in the UK.
In an official statement Martin Sander, General Manager of Ford Model e in Europe, said: “Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build, and sell Ford vehicles. This will impact the organisational structure, talent, and skills we will need in the future,”
The statement went on to explain that the changes were due to Ford’s transition from conventional fuel-driven engines to electric powertrains. The engineering is less complex than in more traditional cars, and Ford’s ambition is to ensure that its offer in Europe is all-electric by 2035.
Severance scheme
Sander emphasised the decision to cut jobs was not taken lightly will all be lost through a voluntary scheme that will see workers compensated. In the months ahead, he has promised to offer staff full support through consultations.
John Baron, the local Conservative MP for Basildon and Billericay, has called the news “disappointing”. The Ford campus is a landmark feature in the area.
Jackie, a resident in neighbouring Brentwood, describes where she lives as having long been a ‘Ford town’, with many managerial staff homes having a Ford in the driveway, and employees from Europe and the US living in the town as temporary residents. She says Ford’s presence has been declining over recent years and offices have been sold off but, she believes, these present cuts will have an immediate effect on employment opportunities in the area.
Ford’s 50-year presence in Dunton
The site at Dunton was officially opened in 1967 by then Prime Minister Harold Wilson, and has seen design and development of the Focus, Kia and a number of internal combustion engines for Ford.
The job losses are part of a wider series of cuts across the continent that will involve a total of 3,800 jobs in product development and administration disappearing over the next three years. It’s happening in conjunction with company switching from production from traditional motor cars to EVs.
Brexit deal may be a factor
Although it has not specifically mentioned in the official statement, prior to the referendum, Ford warned that Brexit posed a threat to its UK business. More recently, experts have highlighted specific risks to the British motor industry more broadly that comes from the combined result of electrification of vehicles and Brexit.
Chris Grey, Professor of Organisation Studies at Royal Holloway says though the UK isn’t the only country affected by the Ford cuts, the Trade and Cooperation Agreement (TCA) between the UK and the EU is a major threat to the industry. This is because the Brexit deal has a “rules of origin provision” on EV batteries which he says was predicted to have a negative impact on inward investment in the auto industry.
“Rules of origin”
Professor David Bailey, a car industry expert at Birmingham University explains what this means. From 2027, the TCA requires that “batteries in EVs have to be assembled in the UK or the EU for the vehicle to qualify for tariff-free trade between the two,” Bailey explains. “The problem is that the UK is lagging well behind EU countries in attracting investment in battery-making capacity, and the Britshvolt collapse into administration throws this into sharp relief.” Bailey is referring to the collapse of lithium-ion battery start-up Britishvolt into bankruptcy, leaving £120 million in debt.
The Ford job losses are a symptom of a much larger existential threat to the UK’s automotive industry which the company understands and will have gamed out. If the UK fails to build a significant battery industry in the next three years, Britain will be unable to export EVs to the EU. It could be that Ford’s decision is just another chapter in the terminal decline of volume car-making in this country.
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