Ford to cut 1400 jobs in North America, Asia
- Author: Zachary Reyes May 18, 2017,
May 18, 2017, 6:14
May 17 Ford Motor Co said on Wednesday it plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives as the No. 2 US automaker looks to boost its sagging stock price. The buyout offers were a fraction of the 20 thousand job cuts some news outlets had reported Ford could announce this week.
About two-thirds of the planned cuts are in North America and the rest in Asia.
The early retirement offers also won't apply to Ford's operations in Europe and South America, which already have retrenchment plans underway.
"We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business, and investing aggressively, but prudently, in emerging opportunities", the automaker said. About 1,400 jobs will be eliminated, Ford said. Ten percent of roughly 9,600 salaried workers in the USA, 1,000 in Mexico, 600 in Canada and 4,141 in the Asia Pacific and China region will be offered buyouts.
That has led the company to find ways to cut some $3 billion out of its operating costs this year while it continues to invest billions to move the company into new, technology-focused territory. Ford is renovating its footprint to attract technology talent and compete with companies like Google, Apple and Uber.
A Ford spokesperson said those "voluntary packages" will consist of a series of early retirement and "special separation" offers that will be rolled out to employees in the affected regions next month. Sales in Asia are volatile and not as profitable.
But investors are anxious for signs that the company is positioned to capitalize on a disruptive wave of innovation that's expected to sweep through the auto industry, including electric vehicles, ride-sharing and self-driving cars. Europe has already been restructured, and restructuring and cost-reduction efforts are now underway in South America. Salaried and hourly workers in Ford's plants won't be affected.
Ford CEO Mark Fields has come under fire recently for the sluggish performance of the Blue Oval's stock since he took the company's helm in July of 2014.
Though Wall Street largely hasn't bought into Ford's plans, Dearborn locals are more encouraged by promised growth than upset by impending cuts. Those departments account for more than 11,000 salaried employees in North America - 9,600 of which are in the US - and more than 4,000 in the Asia Pacific region.
Ford's US sales are down in part because it doesn't have offerings in popular segments like subcompact SUVs and midsize pickups. It expects to earn a pretax profit of $9 billion this year, down from a record of $10.4 billion in 2016. The Motley Fool owns shares of and recommends Ford.