Ford to cut 1400 salaried jobs in North America, Asia
- Author: Zachary Reyes May 19, 2017,
May 19, 2017, 22:35
Ford had about 30,000 salaried workers in the U.S.
Ford Motor Company is reportedly planning to cut about 10 percent of its global workforce in order to help increase its stock price, sources told The Wall Street Journal. While the ultimate number could come in substantially lower than the current 10% workforce reduction estimate, it's a good bet that Ford will indeed cut jobs in the near future.
The company said a large group of salaried workers would not be covered by the planned cuts, including those in product development and in the Ford Credit unit. The shares are down almost 40 per cent since Mark Fields took over as chief executive officer in July 2014.
Jonas said he was impressed with Ford's decisive action to cut jobs, but he still thinks Ford stock is overvalued. Since Mark Fields assumed the role of CEO in July, 2014, shares have declined almost 40 percent, despite record profits over the last few years.
The company said Wednesday that it expects to use early retirement and other buyout packages to cover most of the cuts.
But the company is moving ahead with plans announced past year to shift all small auto production to Mexico.
The shake up is part of a plan announced earlier to slash costs by $3 billion, Reuters said.
Earlier this year, the niche electric vehicle company Tesla passed both Ford and GM in market value, despite having a small fraction of either company's sales.
Announcing employee layoffs that are projected to include up to 10 percent of the company's total workforce, the beleaguered automaker is seeking to turn its ailing stock prices and company value around.
Ford's profits sank 35% during the first quarter to $1.6 billion as higher costs for warranties, recalls and materials eroded profits.
The automaker even committed to ditching plans to build a factory in Mexico that had been under construction after the president criticized it, and instead announced it would add 700 jobs in MI.
In a statement, Ford said it remains focused on "becoming as lean and efficient as possible" but didn't provide specifics on anticipated cost savings.
The company projects a $9 billion pre-tax profit in 2017, compared to $10.4 billion in 2016.