US carmaker Ford agrees deal with unions to cut jobs at German plants

US carmaker Ford has agreed a deal with trade union representatives at its plant in Germany to avert a dispute over planned job cuts.

Ford and the IG Metall union announced on Friday that a deal has been reached to achieve the company's targeted reduction of 2,900 employees by the end of 2027 at two sites in the western city of Cologne.

The threatened cuts led employees to launch in May the first strike in almost 100 years at the Cologne sites, which were founded in 1930 and currently have around 11,500 staff.

The agreement on Friday ensures the cuts are carried out with severance pay, partial retirement options and a financial safety net for pensioners in case Ford's German operation goes bust.

The deal was presented to thousands of workers in meetings on Friday. It still requires the approval of the IG Metall members at Ford in a ballot.

"We now have a real safety net that takes away the existential fears of the employees," said IG Metall spokesman David Lüdtke.

"The job cuts are primarily based on voluntary redundancies," said works council member Benjamin Gruschka. "The severance payments are generous and significantly better than usual in the automotive industry."

Ford Germany is in a difficult situation, having ended the production of vehicles with internal combustion engines in 2023 to focus on electric vehicles.

The plants were converted at a cost of almost €2 billion ($2.3 billion), but the investments are yet to be paid off amid the wider struggles of the German electric vehicle market.