Ford Motor Company announced Thursday the closure of its Dearborn Michigan plant for the final six weeks of 2024 due to sluggish demand for the F-150 Lightning electric truck.
The market for EV pickups has proven softer than producers had hoped, with anecdotal reports that lack of charging station access continues to weigh on consumer decision making. Earlier in 2024, Ford reduced production numbers for the Lightning EV by half. Plans to introduce an EV SUV for the US market were also scrapped.
The new closure will furlough 800 workers as a result and follows a round of layoffs during earlier EV production. To soften the blow, Ford notified employees that manager bonuses would be slashed by up to 65%, with future compensation tied more closely to performance metrics.
The Dearborn layoffs come as the presidential election shines a spotlight on decisions within organized labor. Workers at a Tennessee battery plant voted to join the United Auto Workers (UAW) in September — the latest in a push by the union into the EV segment to make headway. Separately, a significant portion of UAW members in the midwest have expressed growing concern that EV adoption will ultimately open the US market to inexpensive China-made cars.
For Ford, the plant closure is the latest in a series of disappointing developments in their EV efforts.
The iconic car company reported third-quarter results on Monday, with guidance from management to the low end of the projected range. The disappointing results followed strong performance by rivals General Motors GM and Tesla TSLA .
On the company’s earnings call, senior management said that, despite $1 billion in cost cutting measures, Ford expects to lose $5 billion on its electric truck and car business, driven by pricing pressure from rivals and higher warranty costs.
CEO James Farley noted one bright spot, saying that Europe remains an attractive market for EV. Ford recently launched an EV Explorer for the European market.
“The good news is we’re starting to scale EV business in Europe. And those vehicles are margin-positive, and they’re becoming a bigger mix of our business,” Farley said.
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