Plant Closure Risk

author: FutureCar Staff    

Ford recently engaged in negotiations with a Chinese investor regarding the sale of its plant in Germany. Unfortunately, these negotiations did not reach a successful conclusion. As a result, the future of the production center is uncertain, with two possibilities being considered: closure in 2025 or conversion into a technology center.

In an effort to reduce costs and focus on selling electric cars exclusively by 2030, Ford is scaling down its production network in Europe. The company plans to introduce seven electric vehicles to the European market in 2025, with the electric version of the Puma crossover leading the way. The plant in Saarlouis, Germany, currently produces the Ford Focus, a model that will be phased out by 2025 without an electric replacement, making the continued operation of the plant in the region impractical.

The potential investor, whose name has not been disclosed by Ford, conducted a feasibility study and determined that proceeding with the transaction would not be beneficial. Consequently, the investor withdrew from the negotiations. Given the interest that Asian automakers have shown in the European market, the involvement of a Chinese automaker would not have been surprising. Building cars for the European market within Europe itself would be more cost-efficient, mirroring the approach of German carmakers who manufacture vehicles for the Chinese market in China.

Earlier this year, the plant's works council revealed that fifteen potential investors had expressed interest. Among them were the Chinese car giant BYD and Chery Automotive. Ford and the German state of Saarland held discussions with BYD, several smaller manufacturers, and a German solar panel modules manufacturer, according to Bloomberg.

Ford's Europe passenger cars boss, Martin Sander, informed the plant's workers that the company is exploring alternative plans to preserve the jobs of 1,000 out of the current 4,400 employees. One potential option for the future is the conversion of the car plant into a technology center.

The decline of the Saarlouis plant began in 2022 when Ford selected the production center in Valencia, Spain, as the site for manufacturing its next-generation electric cars.

The union representing the workers at the Saarlouis plant expressed anger and frustration at the news, warning that the consequences would be "costly" for Ford if a significant number of employees were to lose their jobs. The union is working towards establishing a collective bargaining agreement to protect the rights of the affected workers.

FutureCar Staff