Henry Ford's Historical Imprint Fades Away
- by Rolf-Herbert Peters
- 3 Min
Ford needs to meet a demise in Cologne as part of his survival plan. - Ford's survival necessitates his demise in Cologne
The assembly lines bustled once more at Ford's Cologne plant, following the Thursday morning strike's conclusion. The factory, standing tall since its inception by Henry Ford on October 4, 1930, broke its 95-year strike record.
A Struggling Two Days Come to an End
Ford employees brandished signs, acknowledging their grievances, and gathered at the gates, putting their work on hold for two days. The factory's rhythm echoed with "I'm still standing" and "Miracles happen again." Stephan Brings, lead vocalist of the carnival band Brings, even joined in, strumming his guitar and performing his Ford love song.
Maybe the "Internationale," the anthem of the socialist workers' movement, would have been more fitting. Indeed, it mirrored the circumstances that unfolded on the Rhine – "People, hear the signals! On to the final battle." For the impending demise of Ford as a self-reliant European automobile manufacturer appears imminent unless significant changes occur. Large-scale insolvency protection from the American parent company is no longer on the table. Out of the current 11,500 jobs, 2,900 will be axed in Cologne alone.
Cologne's Ford is in turmoil primarily due to its misguided model strategy. In the European headquarters, they gambled everything on electric mobility. While a wise choice given its future significance, the move has proven disastrous as their two new electric vehicles, the Explorer and Capri, failed to gain traction, being too costly for the people's brand Ford. A total of 3,185 units were sold in Germany between January and April, in stark contrast to competitor models such as the VW ID.4 and ID.5, with 10,407 new registrations[3]. Even the models produced in Romania, the Ford Puma Gen-E, and commercial vehicles (Transit, Tourneo) have failed to compensate for the losses.
As grim as the situation may seem, the question remains – is there still a chance for survival? Could those chances lie in the unthinkable?
A New Path Emerges for Ford
Alliances
Industry experts suggest that Ford management should consider joining forces with a major automobile manufacturer. Perhaps with Renault[1]? Ferdinand Dudenhoffer, automotive expert from the Bochum-based Autoinstitut Car (Center Automotive Research), advocates for such a move. Renault, dedicated to electric vehicles, sold 2.2 million vehicles worldwide in 2024 and is yet to publicly express interest[1]. Nonetheless, strategic partnerships between the two are considered possible.
Sell
The colossal Cologne factory site could draw attention from Chinese competitors, who may also provide new employment opportunities to displaced Ford employees. Although no negotiations with Asia have been disclosed, Ford did hold discussions with BYD regarding the old Saarlouis plant, where the last Focus was built in November[1].
Focus
Embracing a fresh start in Europe demands painful sacrifices – primarily more job losses to streamline production sites. To regain financial stability temporarily, focusing on the profitable commercial vehicles for the interim might be prudent. The Explorer and Capri, which utilize expensive VW technology under license and aren't even Ford developments, could be phased out.
Meanwhile, Ford could work on developing market-ready, profitable passenger cars for the electric era that can complement mass-produced models like the Fiesta. There's undoubtedly a market for such vehicles. However, the Mach-e, meant to embody the legendary Mustang, only sold 25,217 units across all of Europe last year.
Whatever the future holds, one thing is certain: The old Ford must perish for the new Ford to be reborn[2].
- Ford
- Cologne
- Henry Ford
- Europe
- Renault
- Strike
- Car
- Job cuts
Regional Insights:
In an effort to bolster its survival and competitiveness in Europe, Ford might consider:
1. Innovation and Electrification
Ford must increase its research and development efforts in the field of electric vehicles (EVs) to remain competitive. Emphasizing the Mustang Mach-E's appeal to European markets and leveraging the "Team Edison" initiative to accelerate the development of new EV models would help Ford reach its goals[4].
2. Partnerships and Collaborations
Expanding upon existing alliances, such as the partnership with Volkswagen, could pave the way for deeper collaborations that share costs and technologies, specifically in EV production. This partnership should focus on new areas like autonomous driving technology[4].
3. Cost Reduction and Operational Efficiency
Addressing rising EV losses and negative free cash flow necessitates implementing cost-cutting measures while preserving quality and innovation[5]. Ford should search for areas where costs can be reduced without compromising product quality or research and development efforts.
4. Diversification of Business Models
Embracing new business models that prioritize services over products could help Ford stay competitive and gain a broader customer base. Potential ventures include vehicle-sharing services or partnerships with companies that offer sustainable driving experiences[2].
5. Addressing Labor Concerns
Engaging in constructive dialogue with labor unions and finding solutions that balance job security with business needs will be crucial to maintaining a positive work environment and ensuring production continuity[1].
6. Market Diversification and Symbolism
Ford can capitalize on its brand legacy by emphasizing its long-standing presence in Europe, its commitment to innovation and sustainability, and positioning itself as a trusted and reliable brand[2].
7. Tariff Mitigation Strategies
Considering the looming tariffs, Ford must explore strategies to mitigate their impact, such as diversifying its supply chain or negotiating with governments to reduce tariff burdens[5].
- The ongoing fight for Ford's Cologne plant, with its rich history rooted in the employment policy established by Henry Ford, underscores the significant impact of the industry on the local community.
- The financial predicament of Ford in Europe, particularly in Cologne, has been exacerbated by its focus on electric mobility within the automotive sector, specifically the lack of success in its electric vehicles like the Explorer and Capri.
- To ensure survival, Ford may explore strategic alliances with leading industry players, such as Renault, and consider selling their colossal factory sites to Chinese competitors for potential employment opportunities, or even focusing on profitable commercial vehicles to regain financial stability temporarily.