Ford Motor Company F has planned to invest up to 4.4 billion euros ($4.8 billion) in its struggling German operations as part of efforts to revitalize its European business. Its German subsidiary, Ford-Werke, currently burdened with 5.8 billion euros in debt, will continue its strategic transformation by focusing on cost reduction and improving competitiveness.

This decision comes amid mounting challenges in Europe’s automotive industry, including high costs, weak demand and increasing competition from Asian manufacturers. These factors have led to plant closures and job cuts, while the United States is considering imposing tariffs on auto imports. Ford has already been reducing its European workforce with thousands of job cuts, particularly in Germany, where Volkswagen is also facing difficulties.

Per John Lawler, vice chairman of Ford, recapitalizing German operations will support the company’s European transformation and enhance its ability to compete with a refreshed product lineup. To establish a sustainable European business, Ford must also streamline governance, cut costs and improve efficiency.

A slower-than-expected transition to electric vehicles in Europe led Ford to reconsider its initial goal of producing only EVs in the region by the end of the decade. In 2024, its European passenger car market share fell to 3.3% from 4% in 2023, per the European Automobile Manufacturers’ Association. The new funding package includes capital to address Ford-Werke’s debt issues and finance a long-term business strategy. It also replaces a long-standing agreement, active since 2006, that required Ford to cover any losses incurred by its German subsidiary, a policy that had faced opposition from the IG Metall labor union.

Lawler also urged European policymakers to create a clear strategy for promoting electric vehicles and to align emissions targets with consumer demand.

F’s Zacks Rank & Key Picks

Ford carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are China Yuchai International Limited CYD, Dana Incorporated DAN and Strattec Security Corporation STRT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CYD’s 2025 sales and earnings indicates year-over-year growth of 9.17% and 36.84%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 25 cents in the past 30 days.

The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 70.21%. EPS estimates for 2025 and 2026 have improved 10 cents each in the past 30 days.

The Zacks Consensus Estimate for STRT’s 2025 sales indicates year-over-year growth of 2.61%. EPS estimates for 2025 and 2026 have improved 91 cents and $1.06, respectively, in the past 30 days.

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