Ford to cut 1400 jobs by the end of this summer
- Author: Zachary Reyes May 22, 2017,
May 22, 2017, 5:15
The company will offer voluntary early retirement and separation packages to around 10 percent of salaried workers in departments such as sales, marketing and human resources.
The No. 2 USA automaker said it must focus on "becoming as lean and efficient as possible" as it announced job cuts that will affect 1,400 of about 15,000 salaried workers in its North America and Asia divisions and will be completed by October.
Today, Ford said it remains focused on its strategic plan to transforming traditionally underperforming areas of its core business and to investing in emerging opportunities, such as mobility and autonomous vehicles.
"Reducing costs and becoming as lean and efficient as possible also remain part of that work", Moran said.
"Since Ford of Europe and South America already have completed people actions or have them under way, these regions will not be included".
Ford also hopes that taking aggressive action to address the market downturn can help to reassure concerned investors, many of which will be mindful of how the last industry crisis, just seven years ago, led several of the company's peers, including General Motors (GM), to file for bankruptcy. Ford's stock price has fallen almost 40 percent over the last three years.
The company is also spending heavily on technology with an uncertain future, like self-driving vehicles.
The Detroit automakers have been under pressure from U.S. President Donald Trump to add jobs in the United States, but declining U.S. sales and stalled share values are exerting a stronger force.
But investors are anxious about slowing sales and an industry that could be dominated by autonomous vehicles and auto sharing in the future.
But neither the unionized hourly workers, nor salaried workers like managers and engineers, at Ford's manufacturing plants will be eligible for the packages, Ford spokeswoman Kelli Felker confirmed. But Ford has been rolling out a series of temporary plant closings and layoffs since the US automotive market began to slow past year.
Ford said in January it was cancelling a planned Mexico plant and adding 700 jobs in MI.
Ford's stock fell to a 52-week low Wednesday morning, trading down about 1.5 percent as of 10:47 a.m.to $10.78 a share.
Ford's net income fell 35 percent to $1.6 billion in the first quarter.
The buyout offers were a fraction of the 20,000 job cuts that some news outlets had reported Ford could announce this week. "Car companies coming back to U.S. JOBS!"
Ford said the cuts would amount to about 10 percent of a group of 15,000 managers and other non-production workers and would reduce labor costs for that segment by 10 percent.
The Dearborn, Mich., auto maker has booked substantial profits in recent years, including two consecutive years of record earnings, but Ford's market capitalization earlier this year sunk below that of electric-car startup Tesla Inc.