Automotive News Europe — 2023-01-24
Automotive Industry
Ford is in talks with Chinese electric-vehicle maker BYD over the sale of its plant in Saarlouis, Germany, the Wall Street Journal reported, citing people familiar with the matter.
Ford will end production of the Focus compact car at the plant in 2025 as the company shrinks its vehicle lineup in Europe to concentrate on full-electric cars and light commercial vans.
The future of the Saarlouis factory has been unclear since June 2022when Ford picked its plant in Valencia, Spain, to build its next-generation electric vehicles over the German plant.
Ford executives plan to travel to China next week to discuss the potential sale with BYD, the Journal reported. Talks are still in a preliminary stage and may ultimately fall through, the report said.
Ford said in June 2022 it is seeking alternatives for vehicle production at Saarlouis, including involving other manufacturers. The factory employs 4,600 workers.
The Journal report said Ford is also gauging interest from about 15 potential investors, but the terms of any deal are not known.
Negotiations with possible investors -- including companies in energy and car assembly as well as automakers -- had accelerated in recent months and Ford aimed to present a solution for the future of the plant by the end of the first quarter, said Saarlouis works council chief Markus Thal.
"It is of secondary importance which continent a possible investor comes from -- if a carmaker comes, that's what we would like to see, because it's what we do," he said.
"We need a plan urgently," Thal added, saying workers would not wait until 2024 for a solution.
Ford and the regional government of Saarland where the factory is located agreed in September 2022 to cooperate on finding new investors for the plant, with a final decision on a buyer to be approved by both parties.
The Atto 3 compact crossover is one of three models BYD sells in selected European markets.
Saarland's regional economy minister, Juergen Barke, said in December that buyers were interested, without providing detail. A spokesperson for the ministry declined to comment on ongoing negotiations.
BYD and Ford declined to comment. A spokesperson for the regional economy ministry also declined to comment on a possible BYD bid.
BYD, the world's biggest seller of battery-electric vehicles and plug-in hybrids in 2022, told Reuters in October it was looking to produce electric cars in Europe.
The company sells three Chinese-made cars in a handful of European markets and plans to add more models and markets this year, one of numerous Chinese brands targeting Europe's growing EV market.
BYD currently makes electric buses at a plant in Hungary. Chinese automaker Nio also has a factory in Hungary, near Budapest, where it makes power products for its battery-swapping stations.
Separately, Ford said on Tuesday 24 January that it intends to decide by mid-February on how many jobs will be cut in Europe after announcing plans to layoff up to 3,200 people at its factory in Cologne, Germany, where it builds the Fiesta small car.
Management figures presented a worst-case scenario of up to 2,500 job cuts in product development and a further 700 in administration.
Ford has committed to an all-electric lineup in Europe by 2030 and its US leadership has repeatedly flagged this requires less labor.
Its European staff last saw a wave of job cuts in 2019 and 2020 as the carmaker pursued a 6% operating margin in the region, a goal thrown off course by the coronavirus pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales.