China’s BYD Interested in Acquiring Ford Plant in Germany

Ford is in discussions with Chinese electric vehicle (EV) maker BYD over the sale of its Saarlouis manufacturing plant in Germany. The talks are still in preliminary stages. The production in the factory is already planned to end in 2025. The future of the Saarlouis site has been unclear since last June when Ford designated a site in Spain to manufacture its next-generation EVs over the German plant. EV battery material costs and projected slowdown in the United States and European economies are forcing automakers to cut expenses. The automaker is also gauging interest from around 15 potential investors, but terms of the deal are not revealed so far.

Ford executives are set to travel to China next week to hold talks with BYD regarding the acquisition of the site.

Negotiations with possible investors, including companies in energy and car assembly as well as original equipment manufacturers, had accelerated in recent months and the carmaker aims to present a solution for the future of the plant by the end of the first quarter.

BYD, which has become the world’s biggest seller of battery EVs and plug-in hybrids in 2022, previously said it was looking to produce EVs in Europe, where it currently only produces electric buses at a plant in Hungary.

BYD sells three Chinese-made cars in a few European markets. The company said last November it plans to add more models and markets this year, one of several Chinese automakers targeting Europe’s growing EV market.

Meanwhile, Ford also said on Tuesday that it will decide by mid-February on how many jobs it would cut in Europe after announcing plans to cut up to 3,200 jobs at its factory in the German city of Cologne. Management presented a worst-case scenario of up to 2,500 job cuts in product development and a further 700 in administration.

Union representatives for Ford’s largest German site in Cologne will meet with Ford’s management on Saturday to negotiate on planned job cuts across Europe announced by management on Monday.

Ford has committed to make all its vehicle line-up electric in Europe by 2030.

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 pandemic, with pretax profit margins in Europe in the first nine months of 2022 at just 2.2% of sales.

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