Agency Report –
US carmaker Ford plans to invest a substantial amount of cash into its struggling German subsidiary to pay down debts and boost business, but at the same announced measures to make Ford Germany more financially independent.
A capital injection from Ford of up to €4.4 billion ($4.8 billion) will help pay down Ford Germany’s substantial debts, which were recently stated at around €5.8 billion, the company said on Monday.
In addition to the cash injection for debt repayment, the Detroit-based Ford parent company will invest several hundred million dollars to boost business in Germany over the next four years.
But Ford will also drop a debt guarantee that the US parent company offered for Ford Germany back in 2006, meaning that the German subsidiary will operate with a greater degree of financial autonomy.
Ford Germany boss Marcus Wassenberg said the investment is a sign of confidence from the Ford parent company in the prospects for a rebound in Germany, where the carmaker has been losing money and recently announced lay-offs.
“The several hundred million for the new business plan show that the US headquarters continue to believe in success in Germany and Europe,” Wassenberg said.
Ford Germany has long been in the red, and the car manufacturer discontinued production of the well-known Ford Fiesta small car in 2023.
With an investment of almost €2 billion, Ford’s plant in Cologne was overhauled to produce electric vehicles, but sales of two new electric models have so far fallen well short of expectations.
At the end of 2024, Ford management announced a cost-cutting programme with the reduction of 2,900 jobs at the Cologne plant within three years.
According to the company, Ford still has around 15,000 employees in Germany, almost 12,000 of them in Cologne.
