Future of the auto industry in Saarland: Ford factory closes forever!

Future of the auto industry in Saarland: Ford factory closes forever!

The future of the automotive industry in Saarland is in jeopardy. Production at the Ford Saarlouis plant will stop at the end of 2025, which will have far-reaching consequences for the region. This development is leading to a debate about the possible permanent migration of automobile production from Saarland. Armin Gehl, head of the Autoregion network, was pessimistic and predicted that cars would never be built in Saarland again. According to Gehl, the main reason for this is a lack of space and competition from other European countries, especially Hungary. The former struggle of employees for their jobs, symbolized by signs with the motto “Saarlouis must live!”, is increasingly dwindling.

However, the situation is not as clear-cut as Gehl makes it out to be. Trade unions such as IG Metall Völklingen and the works council of Ford-Werke Saarlouis contradict his forecast. They emphasize the strength of Saarland as an industrial location and do not hold it solely responsible for Ford's previous decision. Rather, the high production and wage costs are seen as a problem, which makes it impossible to produce cars under 30,000 euros. Gehl's critics see his statements as dangerous because they could undermine efforts to attract new companies to the region.

Upheavals and investments

Ford's restructuring in the European market, aimed at positioning itself as a purely electric car maker, entails massive job cuts. According to IG Metall, staff will be cut in particular at the Ford plant in Saarlouis. Production of the popular Focus compact model will end in 2025, further increasing uncertainty for the site. The factory in Valencia has been awarded the contract to produce the electric successor.

In order to cushion the impact of these changes, Ford signed a letter of intent with the Saarland government and a potential major investor at the end of June 2023. But Ford Germany boss Martin Sander announced in October 2023 that the buyer had pulled out after failed negotiations. There is no concrete information about the reasons for the failure of these talks.

Employment security and future prospects

Despite all the uncertainties, Ford has surprisingly made an employment commitment for the Saarlouis plant until the end of 2032, with the aim of securing 1,000 jobs. Around 3,750 employees currently work at the plant. This regulation is set out in a works agreement with the works council and includes, among other things, a social collective agreement that includes high severance payments and bonuses. A transfer company will also be formed and qualification programs are planned.

Production of the Ford Focus has been postponed again to November 2025. As part of strikes in March 2024, a social collective agreement was also negotiated for employees of five supplier companies to the plant. Ford is still in negotiations with up to 15 interested parties for a (partial) sale of the site, with at least eight specific interested parties having been identified. Potential buyers include companies such as BYD, Magna and Nedcar. In the worst case scenario, Saarland also has the option of taking over the site from Ford for up to 95 million euros and marketing it itself - but it remains unclear whether this arrangement can be implemented after negotiations with the investor have been broken off.

Amid these challenges, the call for support from all actors committed to industry and employment in the region is more necessary than ever. It remains to be seen how the situation in Saarland will develop and what measures will be taken to secure automobile production in the long term.

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