Published by Global Banking & Finance Review®
Posted on March 10, 2025
2 min readLast updated: January 24, 2026
Add as preferred source on GoogleFord invests €4.4 billion in its German unit to reduce costs and enhance competitiveness amid Europe's challenging car market.
FRANKFURT (Reuters) -Ford will inject up to 4.4 billion euros ($4.8 billion) into its struggling German operations as it tries to revive its European business, the U.S. carmaker said on Monday.
Its Ford-Werke German arm, which is burdened with 5.8 billion euros of debt, will continue a strategic transformation, focusing on reducing costs and increasing competitiveness, Ford said in a statement.
The move comes as Europe's car sector is battling high costs, weak demand and rising competition from Asian rivals, forcing plant closures and job cuts at a time when the United States is considering tariffs on auto imports.
Ford is already cutting thousands of jobs in Europe, many of them in Germany, where domestic giant Volkswagen has also been struggling.
"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."
Slower than expected adoption of electric vehicles in Europe prompted Ford last year to be more flexible about a previous goal for all of its European production to be EVs by the end of the decade.
The new funding commitment includes a capital injection to address overborrowing at Ford-Werke and provide funding for a multi-year business plan.
It also replaces an agreement that Ford would cover any losses of the German subsidiary, a deal that had been in place since 2006, drawing protests from the powerful IG Metall labour union.
Without the agreement, Ford's German unit "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", IG Metall said.
Ford's Lawler called on European policymakers to establish a clear agenda to promote electric vehicles and bring emissions targets in line with consumer demand.
($1 = 0.9249 euros)
(Reporting by Shivansh Tiwary in Bengaluru and Christoph Steitz in Frankfurt; Writing by Rachel More; Editing by Mrigank Dhaniwala, Miranda Murray, David Goodman and Susan Fenton)
Ford will inject up to 4.4 billion euros ($4.8 billion) into its struggling German operations.
The European car sector is battling high costs, weak demand, and rising competition from Asian rivals.
The capital injection aims to address overborrowing at Ford-Werke and provide funding for a multi-year business plan.
Ford's Lawler called on European policymakers to establish a clear agenda to promote electric vehicles and align emissions targets with consumer demand.
Without the new agreement, Ford's German unit could become insolvent in the coming years if the economic situation does not improve.
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