- by Rolf-Herbert Peters
- 3 Min
Ford's fatal encounter in Cologne is necessary for his survival. - Ford in Cologne needs to be eliminated to thrive or persist
This week, the Ford workers in Cologne returned to their workstations, leaving strike action behind. For the first time in the plant's 95-year history, workers pumped the brakes on production.
The Storm: Two Days in Cologne's Ford Plant
The strikers refrained from steering the assembly line, instead choosing the role of the disgruntled protester at the factory gates. The line hummed along to "I'm Still Standing" and "Miracles Happen Again," rallying spirits. And, since nothing in Cologne happens without a touch of carnival, Stephan Brings, the vocalist of the Brings carnival combo, showed up with his guitar. A Ford love song was crooned especially for the occasion.
Still, perhaps the "Internationale," the battle hymn of the socialist labor movement, would've been more appropriate. It would have captured the situation along the Rhine better: "People, hear the signals! On to the final battle!" The data suggests that the fight is underway for Ford's European workforce. The possibility of Ford ending its reign as an independent European car manufacturer seems imminent if drastic changes don't ensue. This perspective is diagonally significant, given that Ford's parent company is no longer keen on assuming insolvency protection for its European counterpart. Out of the current 11,500 jobs, 2,900 are eyeing the chopping block, exclusively in Cologne.
The predicament of Ford can largely be attributed to a flawed model strategy. Ford Europe aimed high by putting their eggs solely in the electric mobility basket, an undeniably wise decision considering the future of the industry. However, the two new electric offerings, the Explorer and the Capri, left much to be desired, being too costly for the mass Ford consumer brand. Combined, they managed only 3,185 sales in Germany from January to April, compared to the 10,407 new registrations of Volkswagen ID.4 and ID.5 counterparts. Even the models from the Romanian Craiova, the Ford Puma Gen-E, and the commercial vehicles (Transit, Tourneo) couldn't offset this clerical error. Undoubtedly, this is a far cry from the numbers needed to survive as Ford Europe in one of the world's most cut-throat markets.
With the grim reality staring at them, the crucial question arises: Is survival even possible? And if so, where lies the hope?
Potential Lifeboats for Ford Europe
Collaborations Aplenty:Industry experts are urgently pressing the management to forge alliances with big players, like the ailing Opel did with Stellantis. Perhaps with Renault? Auto expert, Ferdinand Dudenhöffer from the Bochum-based Autoinstitut Car (Center Automotive Research), advocates this path. Renault, wholly committed to electric vehicles and selling 2.2 million vehicles worldwide in 2024, has yet to express public interest. However, experts still assert that a strategic partnership is within reach. Renault's German market share took a massive tumble, a situation similar to Ford's brand ethos of crafting reliable, mass-market vehicles.
The Factory Wall Comes Down?:The sprawling Cologne plant, boasting the capacity to produce 200,000 vehicles per year, struggles to achieve even 20% utilization. Chinese manufacturers may express interest in the facility, potentially offering new employment opportunities to dismissed Ford workers. Though discussions with Asian counterparts are unreported yet, Ford did engage in sales talks with BYD for its Saarlouis plant—the final resting place of the Focus, which rolled off the assembly line in November. The large Chinese manufacturers plan to bolster European production, in part, to sidestep tariffs.
A Phoenix Rising over Europe?:Ford could theoretically start anew in Europe—after a painful reset. Increased job cuts would be necessary to streamline production sites and rebuild Ford's financial footing. The focus would shift primarily to commercial vehicles, which have remained Ford's stronghold in Europe. Considering abandoning the Explorer and Capri, both powered by proprietary VW technology under costly licensing, could be a strategic move. Ford might invest time and resources into creating its own profit-generating electric passenger cars for the European market, catering to anticipated demand rather than purely relying on US imports.
In whichever direction the winds blow, one thing seems certain: the demise of the old Ford precedes the birth of a new one.
- Ford
- Cologne
- Renault
- Europe
- Strike
- Car
- Job cuts
- Car Industry
- Electric Vehicles
Insights:
- Ford's European operations may invest in partnerships, triggering potential collaborations with companies like Renault.
- The future of Ford's Cologne plant could include restructuring, potentially through sale or optimization, as a means of addressing operational challenges and maximizing efficiency.
- Ford's strategic focus could pivot towards commercial vehicles, a segment where it holds a competitive advantage over rivals, as the company seeks to streamline operations and improve profitability.
- The industry experts are advocating for Ford to forge alliances with other major players, such as Renault, in an effort to ensure the survival of Ford Europe.
- The Cologne Ford plant, which currently struggles with low utilization, might attract interest from Chinese manufacturers, potentially providing new employment opportunities for dismissed workers.
- Ford Europe may choose to focus on commercial vehicles, a segment in which they have a competitive advantage, as part of a larger strategy to restructure and improve profitability.
