Ford will lay off 3,200 employees in Europe. How the US and China are winning the electric car battle

The plan is clear: lay off 3,200 Ford employees in Europe and take part of the work to the United States. A movement that is beginning to be common, with manufacturers who are finding the place to manufacture their electric vehicles or batteries on the other side of the pond. Pressured or of their own free will, the truth is that brands are investing in this country. And Europe watches from a distance.

3,200 layoffs. Of which 2,500 employees work in product development and another 700 are in charge of administrative tasks. Most of Ford’s layoffs will focus on Germanywhere the company has its plant in Cologne and Saarlouis, but it is expected that they will also be produced at its factory in Almussafes, in Valencia.

This last plant has been risking its future with the German factory in Sarrlouis with the award of new electric models. Finally, Volkswagen’s decision to install its battery factory in Sagunto ended up deciding the company to give priority to the Spanish plant and, for now, it seems that Spain will not bear the brunt of these layoffs.

Labour. This is what Ford is claiming to carry out these more than three thousand layoffs. They assure that the less complexity in the assembly of the electric car will force the company to reduce labor between 30 and 50%. Confirmation that cuts are also expected in the future in Almussafes even though they have been awarded the electric car.

But not just labor. The problem for the employees of Amussafes and, from what we are seeing, of Europe is that in the face of manufacturers we remain as manufacturers and that we do not have key people in the development of R&D of future electric vehicles, their batteries or their software.

Volkswagen has arranged for its batteries and software to be developed in Germany but more and more manufacturers (including Volkswagen itself) are taking positions in the United States, where there are great economic incentives to focus production there and, furthermore, it is raising significant barriers to the entry of manufacturers that do not produce in the country.

This is made here. Joe Biden, president of the United States, has been clear and direct with the intentions of his Inflation Reduction Act: to manufacture as many components as possible in the country to promote the takeoff of the electric car and favor the local industry. I eat? With tax breaks which may reach 100% by 2028 for batteries and vehicles assembled in the United States.

Minerals are required to be mined in the United States or in a country with which it has a free trade agreement. The same happens with the recycling of batteries or the production of their vehicles. Political maneuvering is also one more tool to secure supply chain in the production of the electric car, which is currently dominated by China.

a tweezer. Europe finds itself at a difficult crossroads in which, for the moment, it has not taken sides. She has decided to bet without qualms on the electric car, but at the same time she sees how China is the largest producer of electric vehicles in the world and, furthermore, it is landing strongly in the European market, with an offer that embraces all prices.

In addition, he watches with dread at the enormous influence in the supply chain that this country has for its supply of minerals and rare earths. The response from the United States has been clear and forceful: those who manufacture in the country will have a beneficial treatment for their accounts. This country is also coming to a agreement with South Korea to favor their commercial dealings and, at the same time, in Spain we are having problems getting European funds to arrive, since the required terms do not take into account the time limits of some firms, such as those of Stellantis in Vigo.

How do we do it? There are more and more voices warning of the dangerous path that has been taken in Europe. The institutions want to give way to the electric car but not enough batteries are manufactured and a huge deficit is expected. They also want to be a power in this sector but China’s strength in the supply chain is very high.

All this has led some voices in the sector to clearly demand that tougher tariffs be imposed on Chinese firms. So Carlos Tavares has requested it, CEO of Stellantis, repeatedly. At the moment, the budget to produce the necessary batteries that will be claimed in the coming years is already amounting to 100,000 million euros.