Ford delays electrification, Almussafes faces plant closures

Ford slows electrification; Almussafes loses 3,000 jobs

In Almussafes, the automotive sector once accounted for 10% of the Valencian Community's GDP. Now it is below 6%. Local mayor Toni González repeats this figure whenever asked about the factory's future, better describing what is happening in Ford's industrial belt than any report: suppliers closing their doors, accumulating redundancy files, and electrification investments shelved indefinitely. Lear, Rhenus Automotive, SAS, TSI. Four plants closed in just a few months.

The chain of closures in Ford's supply network

Lear, a seat manufacturer, has finalized a collective redundancy plan affecting 159 workers. The company justified it as trinc: "Lear definitively ceases production activity due to the end of Ford Transit Connect van production and uncertainty regarding future models." Rhenus Automotive, a Ford supplier, announced the closure of its factory and an ERE (collective dismissal procedure) for 118 workers after losing the areas assigned by Ford for the Transit van, which will no longer be manufactured at the Valencia plant. Previously, SAS, a dashboard supplier, and TSI had also shut down their facilities in Almussafes trinc the end of their ties with the multinational.

The pattern repeats itself: auxiliary industry tried for years to reduce its dependence on the oval logo, but Ford still carries the weight of Valencia's automotive sector. And every move by Ford drags along an entire chain.

Why suppliers depend on the multinational

The problem is not just one manufacturer's crisis, but the nature of the electric car itself. According to industry calculations, its production requires 30% less labor than combustion or hybrid models. Fewer components, simpler assembly, less employment. This knock-on effect hits auxiliary companies directly, seeing a reduction in the volume of parts they must manufacture.

Added to this is regulatory uncertainty. Brussels set the ban on selling diesel and petrol cars from 2035, but voices are already calling for an extension because the pandemic and the invasion of Ukraine slowed down investments and plans. All while Chinese competition tightens. The result is a sector that had oriented its transformation toward electrification and now finds that demand does not keep up due to the price of electric vehicles.

The ERE affecting over 1,000 workers and the gigafactory delay

Ford Almussafes' future remains unclear. The multinational has already executed a collective redundancy plan affecting more than 1,000 workers, leaving the factory at historic low staffing levels. Operations Director Kumar Galhotra and his team visited the facilities and told unions they are "postponing any decision related to electrification investments" due to poor EV sales in the market.

Ford clarifies that this does not miccionan abandoning electrification, but delaying it. "As the market and our customers transition to electric vehicles, we will balance volume with demand while maintaining a focus on costs," they state. However, the delay affects all their suppliers' plans. Hope placed in Volkswagen's battery cell gigafactory in Sagunto is also not immediate: the project will not be ready until 2026.

The €30,000 vehicle no longer being bought

There is another front: price. A van like the Transit Connect goes for over €30,000, and in the second-hand market, with few kilometers, it appears for around €18,000. The gap is so large that many potential buyers abandon the purchase. With Spanish salaries, some analyses argue, these prices are simply unaffordable for a growing part of demand.

Moreover, business has shifted. Manufacturers and dealerships increasingly earn more from financing than from vehicle sales, pushing payment conditions that make the final product more expensive. In parallel, some historic dealerships of European brands have converted their facilities to Chinese firms, offering imported vehicles with more aggressive pricing. The scene repeats: the same showroom, a different brand.

The question hovering over the entire sector is not how many more closures will be announced, but who will sustain industrial employment in the region if new mobility requires fewer hands to build fewer cars.