Ford’s European division is facing significant financial difficulties, prompting a crucial recapitalization effort from the company’s headquarters in Detroit.
While this injection of 4.4 billion euros into Ford Werke aims to stabilize the European operations, it comes with a strict plan for cost-cutting and restructuring.
Ford struggles in Europe
In recent years, Ford has invested heavily in Europe, particularly in transforming its Cologne plant—previously dedicated to Fiesta production—into a facility for electric vehicle assembly. However, the timing has proven difficult, with market demand for EVs failing to grow as expected. Meanwhile, the future of the Saarlouis plant remains uncertain following the planned discontinuation of the Focus model in November 2025.
Sales figures further highlight the struggles Ford faces in Europe, with just 31,500 units sold in January and a declining market share of 3.2%. The company is now under pressure to realign its strategies to regain competitiveness.
Ford Werke carries approximately 5 billion euros in debt. Unlike past practices since 2006, Ford’s Detroit headquarters will no longer absorb these liabilities. John Lawler, Ford’s Vice President, explained the reasoning behind the recapitalization in an interview with the Financial Times, stating:
“Through the recapitalization of our operations in Germany, we are supporting the transformation of our business in Europe and strengthening our ability to compete with a fresh model lineup.”
However, Lawler also acknowledged the necessity for further cost reductions and operational efficiencies to establish a sustainable business model in Europe.
The outlook for Ford’s workforce in Europe is bleak. The company had already announced plans to cut 4,000 jobs by the end of last year, and further reductions could follow as Ford continues to streamline its operations.
Lawler noted that the EV transition has been slower than anticipated, necessitating difficult decisions:
“The transition to electric vehicles has not progressed as quickly as we all expected. Tough decisions will need to be made, and we must work together.”
Profitability over volume
Looking ahead, Ford plans to introduce a cost-efficient EV architecture by 2027, shifting its focus to more profitable models rather than broad volume production. Currently, the Puma Gen-E stands as Ford’s primary electric offering, built in Craiova, Romania, alongside several commercial vehicle models—an area that remains a stronghold for the brand.
Ford’s other electric models, including the Mustang Mach-E, the Explorer, and the Capri, are all built on Volkswagen’s MEB platform. Meanwhile, the company’s remaining combustion-engine lineup has been trimmed down to the Puma, Kuga, Focus (as said, production ends this year), Bronco, Tourneo, and the niche Mustang model.
