Ford Gets Ready to Cut Jobs
- Author: Zachary Reyes May 28, 2017,
May 28, 2017, 14:21
Ford Motor Co. is planning to make some substantial job cuts soon.
Unlike job cuts in the past, this time Ford's moving to slash costs while the company is solidly profitable.
Ford last month committed to cutting costs by $3 billion this year, despite that commodity prices are up by $1 billion.
"Fields was extremely candid about the market challenges including slowing USA sales, pricing pressure and rising commodities", UBS said in a research note Monday. Fields was grilled by his board last week and impugned by investors eager for a turnaround in Ford's declining earnings and shares. That might seem rational to owners of Ford's sagging stock.
The company's market value is now behind Tesla and General Motors, and its stock price has fallen over 40 percent since 2014. Electric auto maker Tesla Inc. recently surpassed Ford in market value even though it sells far fewer vehicles.
General Motors Co has cut more than 4,000 U.S.jobs since November, and moved to conserve capital by shedding its European operations and closing unprofitable operations in Asia.
Ford's market capitalization has been surpassed by Tesla Inc (TSLA.O), which has sold just a fraction of Ford vehicles.
These new projects include a unit called Ford Smart Mobility LLC, and an expanding presence in Silicon Valley, where several tech giants are rushing forward with car-sharing ventures, driverless cars and other future mobility experiments. The paper says that most of the jobs will be salaried workers who do not have union protection, rather than the 57,000 USA hourly staff who work on assembly lines. Ford's employment has increased 25 percent in the past five years.
Large-scale layoffs at an icon of American manufacturing could come with a degree of political risk for Ford, which recently earned praise from President Trump for its plants to expand its factories in MI.