Ford Motor Co (F) shares edged higher Tuesday after the carmaker said it would cut around 3,800 jobs, mostly in Germany, as it accelerates its electric vehicle investment drive.
Ford said the cuts will be spread over the next three years and largely focus on operations linked to the manufacture of combustion-engine cars. Around 2,300 jobs will be eliminated in Germany, with cuts focused on plants in Cologne and Aachen, with a further 1,300 planned for the United Kingdom.
Ford plans to launch its first European EV, built on a Volkswagen platform, later this year, and says its region-wide fleet will be all electric by 2035.
"There is significantly less work to be done on drivetrains moving out of combustion engines," said Ford Europe general manager Martin Sandler. "We are moving into a world with less global platforms where less engineering work is necessary. This is why we have to make the adjustments."
Ford shares were marked 0.4% higher in early Tuesday trading to change hands at $13.14 each, a move that still leaves the stock with a six-month decline of around 19.4%.
The move follows Ford's announcement late Monday that it's planning to build an EV battery-making facility near Marshall, Michigan, as part of its joint venture with China's CATL.
The plant will utilize CATL's technology in lithium-iron-phosphate batteries while capitalizing on federal subsidies from the Inflation Reduction Act as well as other financial incentives from the state of Michigan.
Ford's renewed EV focus, which includes a targeted run rate of 600,000 EVs by the end of this year, follows a disappointing fourth quarter earnings report linked to supply chain disruptions and chip shortages that have plagued the automaker for much of the past year.
"We should have done much better last year," said CEO Jim Farley. “We left about $2 billion in profits on the table that were within our control."
The carmaker said it sees adjusted 2023 earnings of between $9 billion and $11 billion, compared to its 2022 tally of $10.4 billion, with free cash flow falling by around a third to $6 billion.
Ford is also looking to a "significant" increase in production of its Mustang Mach-E as it steps-up its domestic challenge to Tesla, unveiling price cuts for its flagship EV late last month.
Ford said it would cut Mustang Mach-E prices across the board, with an 8.4% reduction pegged for the extended-range GT version, taking it $5,900 lower to $63,995. Extended-range-battery costs, Ford said, would fall 18.6% to $7,000.
"We are not going to cede ground to anyone," said Marin Gjaja, COO for Ford Model e.
