Ford to invest €4.4B in Germany to bolster its European business
March 14, 2025
Ford has announced plans to invest up to €4.4 billion in its German operations to bolster its European business. Ford’s German division, Ford-Werke GmbH, which carries €5.8 billion in debt, will continue its strategic transformation by focusing on reducing costs and increasing competitiveness.
The decision is attributed to the slump in Europe’s automotive industry, which is seeing high costs, weak demand, and increased competition from Asian manufacturers, leading to plant closures and job reductions. Also facing the industry is the United States’ contemplation of tariffs on auto imports. Ford itself is already cutting thousands of jobs in Europe, many of them in Germany.
“By recapitalising our German operations, we are supporting the transformation of our business in Europe and strengthening our ability to compete with a fresh product portfolio,” said John Lawler, vice chair of Ford Motor Company. “To build a sustainable business in Europe, we also need to continue to simplify our governance, reduce costs and drive efficiencies.”
Ford also noted that the slower-than-expected adoption of electric vehicles in Europe prompted the company to be more flexible about its previous goal of having 100% its European production be EVs by the end of the decade.
The new funding commitment includes a capital injection aimed at addressing Ford-Werke’s overborrowing issues as well as providing funding for a multi-year business plan. This agreement will replace a previous arrangement in which Ford was responsible for covering any losses incurred by its German subsidiary. The previous deal had been in effect since 2006, but had drawn protests from the large IG Metall labour union.
Without the agreement, IG Metall stated that Ford Germany “could become insolvent in the coming years if the economic situation does not improve and the parent company in the USA is no longer able to offset the losses.”
Lawler also called on European policymakers to establish a clear agenda to promote electric vehicles and bring emission targets in line with consumer demand.
