Ford has been quite up front about its struggles in Europe recently, a region where its sales declined by 17 percent in 2024 versus the year prior. Facing a bleak future in Europe amid weak demand for EVs and passenger vehicles in general, The Blue Oval is shuffling its leadership team and shifting its focus more toward the commercial side of the business, which is enjoying tremendous success there, at least, all while calling for robust government incentives in an effort to drum up demand for electric vehicles. In the meantime, Ford plans to infuse a large mount of cash in its German operations to keep things afloat – but that may not be enough.
As Ford Authority reported yesterday, FoMoCo plans to sink €4.4bn (around $5 billion USD) into its struggling German unit, which is currently roughly €5bn ($5.4 billion USD) in debt. The company’s vice chair, John Lawler, was quick to note that Ford doesn’t intend to pull out of Europe altogether, but according to a new report from Automotive News, union leaders at Ford-Werke – which runs The Blue Oval’s European passenger car business and manufacturing in Germany and Spain – still fears that Ford Germany is on the verge of bankruptcy, regardless, after the automaker withdrew its insolvency protection.
“In principle, it is now possible that the German subsidiary could go bankrupt in a few years if the situation does not improve. The mother has always been there for her daughter in the background, but that is over now,” said Benjamin Gruschka, who is the top union official at Ford-Werke. With credit lines no longer available, the thought is that Ford could simply consolidate its money-losing endeavors in Europe in Ford-Werke GmbH to shield the parent company from insolvency risk.
Regardless of what happens, Ford’s weak passenger vehicle and EV sales in Europe figure to represent massive headaches in the near future, even as it ramps up its commercial business to compensate. As Ford Authority previously reported, poor sales of both the Ford Explorer EV and Capri EV have already prompted the automaker to cut production of those models on more than one occasion, after it invested $2 billion in Germany’s Cologne Electric Vehicle Center, where they’re built.
Comments
Be smart. With the economy about to crumble and Ford offerings in Europe declining, just pull out and take your losses.
That is hardly smart walking away. It is what Ford have been doing for years, walking away from different market segments and then looking at the sales figures and not fully understanding why? Ford used to produce some great cars, reference in particular, the Focus. It has been neglected and left to decline with no replacement. The Focus could have been updated as a plug in hybrid and given a complete overall in design and interior. It was once one of the best cars on the market, they let it go stale.
That doesn’t mean that handing 5 billion dollars to the European subsidiary that is going to try to build EVs that will have to compete against several Chinese brands is a good idea.
Yup.
Nothing like the logic of throwing more money at something that is already in the tank. And why depend on Government handouts when Government is going broke.