Ford (NYSE:F) plans to eliminate 3,800 jobs in Europe over the next three years as part of its initiatives to streamline its operations and reduce its costs to stay competitive. Separately, Ford has halted the production and shipments of its F-150 Lightning electric truck due to a potential battery problem, per CNBC.
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Ford spokeswoman Emma Bergg did not provide any details about the possible battery issue, which is being investigated after pre-delivery quality checks indicated a potential problem. The order to stop production was issued at the beginning of last week. SK On, the battery unit of South Korea’s SK Innovation Co Ltd., which supplies batteries to Ford, is also investigating the matter, per Reuters.
Ford to Reduce Workforce
Coming to the job cuts, Ford plans to remove 2,300 workers in Germany, 1,300 jobs in the U.K., and 200 in the rest of the Europe in product development and administrative functions. The company stated that it is cutting down 2,800 jobs to resize its European engineering footprint as part of its transition to fully electric powertrains and reduced vehicle complexity.
Europe is a key market for Ford’s electric vehicles (EV) growth strategy. The company aims to offer an all-electric fleet in Europe by 2035. Ford is scheduled to start the production of its first European-built electric passenger vehicle later this year. As per the European Automobile Manufacturers’ Association (ACEA), 516,614 new passenger cars of Ford were registered in Europe last year, representing a market share of 4.6%.
Ford has an ambitious plan of ramping up its EV sales in Europe and is targeting over 600,000 units annually by 2026. The company is investing more than $50 billion in EVs through 2026, including recently announced investments in European manufacturing.
Is Ford a Good Stock to Buy?
Ford recently reported lower-than-anticipated Q4 2022 earnings, citing execution and supply chain issues. The company lagged sales target by 100,000 units.
Wall Street has a Hold consensus rating for Ford based on four Buys, six Holds, and two Sells. The average Ford stock price target of $14 implies nearly 8% upside potential. Shares have advanced 11.5% since the start of 2023.
