Ford is set to inject up to €4.4bn of new capital into its German subsidiary, a move aimed at stabilizing its European car business amid mounting financial challenges. The recapitalisation, designed to help offset more than €5bn in debt, will also end the company's long-held commitment to cover any losses incurred by its German operations.
Vice-chair John Lawler told reporters that, while the investment is a crucial step in the transformation of Ford’s struggling European business, it also signals that further tough decisions are on the horizon. Lawler called on Brussels and Germany to provide additional incentives to stimulate demand for electric vehicles a sector where sales have significantly collapsed in major markets such as Germany and France following abrupt subsidy cutbacks. "We all have plenty of supply of EVs into the marketplace. It’s a demand issue," he stated.
As part of its broader restructuring strategy, Ford has announced plans to cut around 4,000 jobs across Europe, including 2,900 in Germany, and to reduce production of its electric Explorer SUV and electric Capri. The company has already invested $2bn to convert its Cologne plant for EV production, but global losses from its EV business reached $5bn last year, with break-even not expected until closer to the end of the decade.
Trade union IG Metall has fiercely opposed the job cuts, calling the decision “a very dirty trick” that exacerbates staff shortages in an already strained industry. Ford’s move to revitalize its German operations reflects broader challenges in the competitive European market, where rising costs and sluggish demand for electric vehicles have forced automakers to undertake radical measures to remain viable.
With the injection of fresh capital, Ford aims to not only stabilize its operations but also invest in further cost reductions and improvements in production efficiency. The company remains committed to its European presence, even as it seeks a new path to profitability in the rapidly evolving global automotive landscape.
