About the Company 

Ford Motor Company was founded in 1903 by Henry Ford, who significantly transformed the automotive industry by introducing mass production of cars. The company is headquartered in Detroit, Michigan. Ford offers a wide range of vehicles, including internal combustion and diesel-powered cars, hybrids, and fully electric SUVs, vans, and trucks. Its models include the Edge, Escape, Ranger, and the iconic Mustang sports car. Besides the Ford brand, the company also owns Lincoln, which specializes in luxury SUVs. One of Ford’s financial services is Ford Credit, while FordLab focuses on product and software development. According to Investopedia.com, Ford ranks as the fifth-largest automaker in the world based on its 12-month revenue as of February 2025.[1] The company operates manufacturing and sales facilities worldwide, including in Brazil, the Czech Republic, Germany, the United Kingdom, and Japan.

Financial Injection 

The American automaker plans to allocate nearly €5 billion to its German subsidiary, Ford-Werke, over the next four years. The largest portion of this financial injection, €4.4 billion ($4.76 billion), is expected to go toward reducing the German branch’s massive debt, which, according to Reuters, stands at approximately €5.8 billion.[2] Ford-Werke is already working on lowering this figure through cost-cutting measures, while an additional €500 million ($545 million) from the latest financing is intended to restore profitability and strengthen the company’s market position. According to Investing, Ford-Werke’s CEO, Marcus Wassenberg, acknowledges that the path to recovery may bring further losses. However, he fully supports the parent company’s decision and believes its assistance will extend beyond the planned four years. This strategic move replaces a previous agreement that, since 2006, obligated Ford to cover all losses incurred by its subsidiary. While the goal of this investment is to transform and revitalize Ford’s European business, Germany’s largest metalworkers' union, IG Metall, has warned, according to Reuters, that if the company's conditions do not improve and Ford can no longer continue financial support, Ford-Werke will face insolvency.[3]

A European Problem

The crisis that the German automaker is facing is nothing unusual. The entire automotive sector in Europe is struggling with challenges. High manufacturing costs, combined with economic headwinds, are driving up prices, which in turn affects consumer demand—especially in the face of growing competition from Asia. According to data from the European Automobile Manufacturers’ Association (ACEA), in January 2025, Europe saw a 2.6% decline in newly registered cars. France led the drop with over 6%, followed by Italy, while the eurozone’s largest economy, Germany, recorded a 2.8% decline.[4] Although the year-over-year increase was positive, it was still below 1%.[5] Adding to the difficult situation across the continent are strict EU emissions regulations and tariffs imposed by the U.S. administration. Several automakers—including Nissan, Stellantis, and Volkswagen—have resorted to cost-cutting measures, layoffs, or changes in production plans. Ford itself announced in fall 2024 that it would lay off approximately 4,000 employees by 2027, primarily in Germany and the United Kingdom, representing 14% of its European workforce.[6] As reported by Reuters, Ford’s Vice Chairman, John Lawler, has called on European lawmakers to introduce clearer regulations that reflect real market demand in an effort to improve the situation.[7]

Exceeded Expectations on Wall Street

The parent company, American Ford, is also facing a challenging 2025. In its Q4 2024 earnings report, released on February 5, 2025, the company warned that market factors, lower prices, and weaker wholesale could impact its business. Ford has not yet factored in Trump’s tariffs into its outlook, as it plans to assess their impact on operations at a later stage. In the official earnings report, Ford President Jim Farley stated that despite challenges, the automaker has a broad product lineup and expects to make significant progress in quality and cost improvements. Additionally, CFO Sherry House emphasized that Ford is on track for higher growth, better margins, and greater resilience. During the quarter, Ford’s revenue surged to a record $48.2 billion, marking a 5% increase year-over-year, while full-year 2024 revenue reached $185 billion. The automotive division, which includes Blue, Pro, and the electric Model e lineup, generated nearly $50 billion in revenue, surpassing LSEG’s estimate of $43.02 billion. While Blue and Pro models remained profitable, the Model e division posted a $1.39 billion loss in Q4 2024, bringing the total annual loss to over $5 billion. Earnings per share (EPS) also beat expectations, coming in at $0.33.* Ford reported a quarterly net income of $1.8 billion, a sharp improvement compared to a $526 million loss in Q4 2023.[8] [9]

Ford Motor Company Stock Price Performance Over the Last 5 Years (Source: Investing.com)*

Conclusion

The financial injection into the German division could be a crucial step toward its stabilization, but it also highlights deeper and longer-term challenges in Europe’s automotive sector. The question remains whether this support will be sufficient or if the expectations of Ford-Werke’s CEO—for assistance beyond four years—will be met, or if the worst-case scenarios will materialize. In particular, the European Union’s stance on addressing these issues will be key in shaping the broader European automotive industry in the coming years.

* Past performance is not a guarantee of future results.

[1] https://www.investing.com/news/stock-market-news/ford-to-inject-up-to-476-billion-into-german-business-ft-reports-3916999

[2] https://www.investing.com/news/stock-market-news/ford-to-inject-up-to-476-billion-into-german-business-ft-reports-3916999

[3] https://www.investing.com/news/stock-market-news/ford-commits-44-billion-to-revitalize-german-unit--bloomberg-93CH-3918185

[4] https://www.acea.auto/pc-registrations/new-car-registrations-2-6-in-january-2025-battery-electric-15-market-share/

[5] https://www.acea.auto/pc-registrations/new-car-registrations-0-8-in-2024-battery-electric-13-6-market-share/

[6] https://www.cnbc.com/2024/11/20/ford-to-cut-14percent-of-european-jobs-blaming-ev-shift-and-rising-competition.html

[7] https://www.investing.com/news/stock-market-news/ford-to-inject-up-to-476-billion-into-german-business-ft-reports-3916999

[8] https://s201.q4cdn.com/693218008/files/doc_financials/2024/q4/Ford-Q4-2024-Earnings-Press-Release.pdf

[9] https://www.cnbc.com/2025/02/05/ford-motor-f-earnings-q4-2024.html