Just two years ago, Ford opened its electric car factory in Cologne.

According to industry experts, the automaker Ford faces a bleak future in Europe. "The situation is bad, and the outlook is even worse," says Ferdinand Dudenhöffer, director of the Bochum-based automotive institute CAR (CAR stands for "Center Automotive Research"). "Ford is too small in the passenger car sector to operate profitably in Europe – that's the case now, and it will most likely remain so in the future."

The situation at Ford's Cologne plant is tense. This week, for the first time since its founding in 1930, strikes could occur against management's tough cost-cutting plans.

Industry expert Dudenhöffer is pessimistic about the future of Ford-Werke GmbH. Unit sales are too low, and personnel costs are too high. Ford has been losing market share in Germany and Europe for a long time. "Ford keeps shrinking – it's now so small in Europe that continuing operations in its current configuration makes little sense." The automaker has its European headquarters and two plants in Cologne, where a total of 11,500 people are employed. In 2018, the number was 20,000.

According to government figures, only 3.5 percent of newly registered cars in Germany last year were Fords, compared to 5.0 percent two years earlier. The proportion is significantly higher for commercial vehicles, although these are not manufactured in Germany.

There are two solutions, says Dudenhöffer: The US parent company could sell its European car business. "Then the problem would be solved." Car production could remain in Cologne, but the development department and administrative areas would relocate to the buyer's headquarters.

The second solution would be to establish a joint venture with another car manufacturer, thereby achieving higher production volumes and lower costs. "Then perhaps we'll finally become competitive," says Dudenhöffer. One possible partner would be Renault.

Stefan Bratzel, director of the Center of Automotive Management (CAM) in Bergisch Gladbach, sees a third way out of the current tense situation. "The US parent company would have to invest billions in the development and production of new electric cars and in enhancing its brand image."

The previously pledged investments of several hundred million euros for the Ford plants in Cologne over a period of four years would be far too little. Ford headquarters in the USA would have to demonstrate a level of determination that it has lacked in recent years.

Ford is currently manufacturing two electric car models in Cologne, but sales are below expectations. Key components are purchased from Volkswagen. "This means the added value for Ford is not very low, which makes the business less attractive," says Bratzel. Ford invested too late and then only half-heartedly in e-mobility, and this is now taking its toll.

Furthermore, Ford has failed to credibly transform its decades-long low-price image, which it has had as a manufacturer of combustion-engine small cars like the Fiesta, into a higher-priced image. The list price of the cheapest version of the Ford Explorer electric car is €39,900; other versions are significantly more expensive. The Ford Capri starts at €42,400. "Why should I buy a Ford when I can get an electric car from Volkswagen for the same money, and the technology inside is largely the same?" says Bratzel.

The outlook for Ford in Europe is also poor because competition will only intensify. "Chinese suppliers are entering the market and significantly increasing competitive pressure." All in all, Ford has "a huge task" ahead of it with its passenger car business, says Bratzel.

"For years, Ford failed to meet the needs of the European car market—it simply launched the wrong cars. It was similar with General Motors and Opel—in the end, the Americans gave up and sold Opel." This is more difficult with Ford, because the Ford car brand cannot be separated from the Ford commercial vehicle brand.