Ford to Cut 1400 Salaried Jobs in North America, Asia

Jay Anderson
May 18, 2017

Ford Motor Co. outlined new steps in its global cost-cutting efforts, saying it will reduce salaried workforce in key regions by 10% amid "an accelerated attack on costs".

Ford shares are down almost 40 percent since Fields took the helm in July 2014. But the initial response by investors is proving lackluster.

The manufacturer intends to eliminate 1,400 positions in North American and Asia by the end of September, using a voluntary program to woo employees with early retirement and separation packages.

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.

About two-thirds of the job reduction will occur in North America.

It remains to be seen if a leaner Ford encourages Wall Street. Morgan Stanley analyst Adam Jonas says Ford should consider exiting unprofitable vehicle lines, like small cars, or markets, like India.

Ford's traditional automotive business has struggled more than crosstown rival General Motors Co as the USA auto market declines following seven years of growth.

The job cuts come following healthy profits and record sales in recent years, though the numbers have been on the decline since the start of 2017.

Ford's stock price has fallen almost 40 per cent over the last three years as investors worry that sales in the US, its biggest market, are peaking.

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Ford has 200.000 employees world-wide and steadily increased its workforce since the financial crisis as the USA market rebounded and a plan to expand in China was launched.

Ford is adding new capacity, among other things converting a suburban Detroit plant to build a new SUV reviving the old Bronco nameplate, as well as a new midsize pickup that brings back the Ranger badge.

Ford isn't the only automaker looking to get leaner as US demand for new vehicles slows down.

There was no immediate comment from President Donald Trump, who has needled Ford about taking jobs to Mexico but celebrated the company's US investments.

Trump, in January, tried to take credit when Ford announced it was canceling a second Mexican plant. And it said the Focus was still moving to Mexico, but production would be consolidated into an existing factory there.

The latest announcement from Ford could prove another setback for Trump's push to create more jobs in American manufacturing.

Ford is getting leaner as it faces an onslaught of challenges, from slowing USA sales to high-tech challengers to its own disgruntled shareholders.

Ford has roughly 30,000 salaried workers in the USA and 200,000 salaried employees worldwide. It previously forecast re-tax earnings of $9 billion, down from $10.4 billion for all of past year.

Investors reacted coolly when word of the job cuts first leaked out earlier this week.

Other reports by BadHub

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