Germany’s largest union, IG Metall, has vowed to fight back auto giant Ford (NYSE:F) if it goes ahead with its plans to cut up to 3,200 jobs across Europe and shift some product development to the U.S., Reuters reported. According to IG Metall, Ford wants to slash up to 2,500 product development jobs and 700 administrative positions, with German facilities expected to feel the maximum impact.
IG Metall has warned that Ford will have to face repercussions if the talks between the “works council and management in coming weeks” fail. “We will not hold back from measures that could seriously impact the company, not just in Germany but Europe-wide,” warned IG Metall. The dominant union recently criticized Tesla (NASDAQ:TSLA) for unreasonable working hours.
Workers at Ford’s Cologne site in Germany, which has about 14,000 workers, including 3,800 at the Merkenich development center, were reportedly informed on Monday about the plans at works council meetings.
A potential slowdown in the U.S. and Europe due to macro challenges is expected to hit Ford and other automakers. Moreover, higher input costs, including surging costs of electric vehicle battery materials, and price wars are putting pressure on margins. Most recently, Tesla reduced the prices of some of its EVs by as much as 20%. Ford is trying to protect its margins by reducing costs through various measures, including workforce reduction.
Europe is a key market for Ford’s EV strategy. Last year, the company announced its plans to launch seven electric vehicles in Europe by 2024. Any potential disputes with workers at key facilities could be detrimental for the company’s long-term growth plans.
What is the Price Target for Ford?
Ford has a Moderate Buy consensus rating based on three Buys and three Holds. The average Ford stock price target of $16.50 implies nearly 29% upside potential. Shares have advanced 10% year-to-date.
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