Ford cutting jobs to jump start stalled stock
- Author: Zachary Reyes May 18, 2017,
May 18, 2017, 0:39
The job cuts are a part of a plan announced previously to slash $3 billion in costs, said the person in the know, as new auto sales in the USA have been showing signs of slowing down following seven consecutive years of growth since the Great Recession ended. WSJ's report claims that a majority of these cuts will be aimed at salaried employees, and Reuters alleges that some workers will be offered "generous" early retirement packages in order to reduce future overhead. It expects the actions to be complete by the end of September.
In an effort to trim operating costs, Ford is poised to start a workforce cutback around the world as part of a targeted US$3 billion (A$4.04 billion) cost reduction. At the same time, Ford is investing heavily in autonomous driving and other newer technologies. The president has repeatedly roasted companies for planning to move jobs overseas, or make substantive cuts to their USA workforce. "We have not announced any new people efficiency actions".
"Look, we're as frustrated as you are by the stock price", Ford Executive Chairman Bill Ford said. Post the criticism, Ford had made a decision to create about 700 jobs in MI, instead of building a $1.6 billion auto factory in Mexico. While the companies said the sackings were part of the ongoing appraisal process, many firms have been accused of sacking employees in India and hiring workers in the USA to appease the Donald Trump administration.
Mr. Trump pressured Ford to pull back on Mexico production and invest in us factories.
During his election campaign President Trump was highly critical of the auto industry's use of Mexican plants to produce vehicles for the USA market. Factory workers and white-collar employees in Ford's plants won't be affected.
In a statement, Ford said that it remains focused on "becoming as lean and efficient as possible" but didn't provide any specifics on what would be included in the separation offers. Ford has almost 30,000 salaried employees in the USA and over 200,000 worldwide.
The move comes as Ford struggles to boost sales and earnings after a sharp slump in recent months.
"We are continuing our intense concentration on cost and the factor for that is not just conscious of the current environment that we remain in, but also I believe preparing us a lot more for a slump scenario", CEO Mark Fields told experts. About half of Ford's employees live in America.