Ford Gets Ready to Cut Jobs

Lauren Perry
May 20, 2017

Ford Motor looking at cost cuts, including personnel cuts high as 10 percent to its global operations, according to one report, amid plateauing US auto sales and slipping profits.

The company says it will offer voluntary early retirement and separation packages to its workers.

"We expect 1,400 salaried positions to be affected and for people to depart by the end of September", Ford said in a statement.

Ford declined to comment on any job cuts but said it remains focused on its core strategies to "drive profitable growth".

The job cuts are expected to be outlined as early as this week and mostly target salaried employees.

Ford shares are down almost 40 percent since Fields took the helm in July 2014. Ford is also spending heavily on future technology, like self-driving and fully electric cars.

Certain areas of the business won't be targeted, including its product development and credit divisions.

In this Tuesday, May 16, 2017, photo, the logo for the Ford Motor Company appears above a post on the floor of the New York Stock Exchange.

"After a recent breakfast with Ford CEO Mark Fields, we are left with the impression of a company that is not at all satisfied with its share price performance, aware of the challenges facing the business and actively pursuing alternative ways to take advantage of opportunities that could narrow the value gap", Jonas said. Worldwide, FoMoCo employs about 200,000 people, which means that the job cuts could involve 20,000 people.

Jonas said he was impressed with Ford's decisive action to cut jobs, but he still thinks Ford stock is overvalued.

Barclay's analyst Brian Johnson, who has a $15 target on the shares, said Ford's stock has suffered because the company isn't making splashy moves, like GM's investment in Lyft or Fiat Chrysler's tie-up with Waymo, Google's self-driving auto unit.

Ford shares fell as much as 2.5 percent in heavy trading and were headed to their worst close since November 2012 as the broader markets tumbled over the political turmoil in Washington.

But Ford and other U.S. automakers have also been under pressure from President Donald Trump to create USA jobs.

While Shanks said the rest of the year would remain flat against the previous fiscal, changed market dynamics with the USA auto sales taking a turn from a record-growth phase could bring the company's North America margins further down further after a significant drop in the most recent quarter.

Ford's board scheduled extra meeting time ahead of last week's annual meeting to press him on his plans for reversing the company's fortunes.

The president has repeatedly roasted companies for planning to move jobs overseas, or make substantive cuts to their USA workforce.

By trimming its cost base, Ford hopes it can return to growth and reinvigorate a declining share price. President Donald Trump throughout his early days in office has pushed for automakers to create jobs in the U.S.

Other reports by VgToday

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