Whatās Going On Here?Ford announced on Tuesday that itās breaking up with 3,800 workers across Europe and the UK as it transitions to fully electric vehicles (EVs). What Does This Mean?Talk about timing: the US carmaker chose Valentineās Day, of all days, to announce a so-called āvoluntaryā separation program for 2,300 German and 1,300 UK workers, with another 200 elsewhere also on the chopping block. This move will cut close to 10% of Fordās employees across Europe, and comes as the carmaking giant accelerates toward a fully electric future. For now, Ford thinks EVs are simpler than old-fashioned gas guzzlers, and reckons they take less manpower to assemble. Thatās all well and good for the auto colossus, but itās cold comfort for the spurned workers. Why Should I Care?Zooming out: Europeās stalling.
Ford announced 3,000 US layoffs back in August ā but a quick napkin calculation shows that hit a far smaller percentage of the regionās 90,000-strong workforce than these European cuts do. Cynics might argue thatās because the USās Inflation Reduction Act gives carmakers all kinds of generous handouts, making it easier to keep Americans on the books. But watch this space: Fordās move will hit Germanyās vital auto industry where it hurts, which could get European lawmakers scribbling their own version of Americaās policy before long.
The bigger picture: Electric dreams.
Fordās accelerating its electric efforts so fast that it expects its entire car lineup to be gasoline-free by 2035. And it's not the only one with ambitions like that: most major carmakers have similar plans, and some governments are even aiming to ban gas-fueled car sales by the mid-2030s. But EVs donāt come cheap, and someoneās got to foot the cost of the transition. So sure, America's act helps, and EV production will get cheaper over time ā but itās likely that drivers and carmakers will ultimately have to swallow some of the cost. | 