By on May 17, 2017

Mark-Fields (Image: Ford)

A day after media reports described an impending mass layoff of Ford Motor Company employees, the automaker has clarified who gets to keep a job.

While the scale of the job reductions is less than previously reported — a 10-percent global workforce reduction is off the table — Ford does plan to cull its salaried North American and Asian workforce by one-tenth in a bid to cut costs.

The move comes after last week’s tense shareholders meeting during which investors and analysts grilled CEO Mark Fields over the company’s sinking market valuation. Since taking the helm three years ago, Fields has seen the company’s stock price sink by roughly 40 percent. Hourly workers aren’t affected by the plan, though the same can’t be said for white-collar employees.

In a statement released this morning, Ford said the layoffs — which will come either through early retirement or separation packages — are meant to boost the company’s profitability. The automaker still plans to invest in “emerging opportunities” such as the mobility sector.

“Reducing costs and becoming as lean and efficient as possible also remain part of that work, including plans to reduce 10 percent of our salaried costs and personnel levels in North America and Asia Pacific this year, using voluntary packages,” the company stated.

Ford hopes streamlining its operations will make the company more attractive to investors. In its latest earnings report, the automaker saw first-quarter profits fall 35 percent.

The personnel cuts won’t spare many of the company’s skill teams. Only members of the product development, Ford Credit, information technology, and global data and analytics teams remain safe from staff reductions, leaving many more wide open. With about 15,000 skill team members in both regions, the cuts should amount to around 1,400 people.

North America should shoulder the majority of the job losses.

Other regions — South America,  Europe, the Middle East and Africa — will remain unaffected by the salaried cuts. Also, by keeping the layoffs within the white-collar sphere, Ford diminishes the chances of backlash from the Trump administration.

[Source: The Detroit News] [Image: Ford Motor Company]

Get the latest TTAC e-Newsletter!

Recommended

20 Comments on “Ford Plans Salaried Position Cull in North America, Asia...”


  • avatar
    28-Cars-Later

    Not living or dying on the F-series might also be a good policy to implement.

  • avatar
    e30gator

    No problem. They can just go down the street and work at one of the new steel mills or coal mines that are about to open up.

  • avatar
    tomLU86

    Yes, culling 10% should do wonders for Ford’s stock.

    The other 90% can easily pick up the slack.

    Good move.

    LOL! All Ford does these days is make engines and (most) trans, and the stampings that go into the bodies. They take the bodies, and fill them with parts made by OTHER companies (ie suppliers) and their engines.

    That’s it. Their payroll costs are a relatively small proportion of the cost of the vehicle.

    I’m sure the angst and reassigning of work to Ford’s (probably) overworked salaried work force will make them do a better job.

    Any word on the Aluminum body F-series? How much did that add in capital investment and piece cost?

    All these auto execs crack me up, trying to justify their bloated salaries by sucking up to the vultures on Wall St.

    Did any shareholders ask how much Mr. Toyoda makes? Or the CEO of Hyundai? I’m sure they make a lot less.

    Why not lop off 50% from Fields’ pay?

    • 0 avatar
      Higheriq

      Newsflash: that’s what ALL other automakers do (do you REALLY think ALL automakers manufacture ALL of the parts that go into ALL of their vehicles?).

      • 0 avatar
        tomLU86

        Thank you, I’m aware of that.

        My point is that I think wages (Hourly & Salary) are a relatively small percent of a (modern) automakers costs.

        Perhaps I’m wrong, but I doubt 10% Salary reduction will do much for the bottom line. If Ford can increase transaction prices and fully use car capacity (I sense Truck is 100-plus % ), THAT will generate meaningful profit increase.

        Otherwise…not much impact. And a decline in the above will whack Ford’s profits big-time.

        But disrupting the organization increases the likelihood of issues and costly recalls

        • 0 avatar
          hreardon

          Assume for a moment that those 1,400 people are $100,000 (full burdened cost) employees. That’s $140 million.

          Not chump change, for sure.

        • 0 avatar

          It is made clear that the choice has been based on stockholders input… so if it did nothing then it wouldn’t have flown. You can’t just look at cost with the dollars, but the savings potential. How much would Ford save making the widget themselves vs firing someone and giving the tasks to higher performing individuals?

        • 0 avatar
          Higheriq

          It won’t do anything – the stock price has declined further over the past couple of days. This was meant as a bone being thrown to Wall Street, but the Street wants some meat.

  • avatar
    Higheriq

    This story is wrong from the get-go:

    “A day after media reports described an impending mass layoff of Ford Motor Company employees, the automaker has clarified who gets to keep a job.”

    The job cuts are VOLUNTARY. Does TTAC not know what VOLUNTARY means?

    • 0 avatar
      Scoutdude

      Do you know what Voluntary means when it proceeded the word Layoffs? It means everyone x years away from retirement will be offered a early retirement. Once the deadline for that has passed they will put out a severance package offer to the general rank and file. When that only reaches 50% of the goal then they will drop the ax until they reach the level they want.

      • 0 avatar
        highdesertcat

        They’ve done that before, exactly like that, IIRC.

      • 0 avatar
        Higheriq

        Do you know that that Ford is limiting the early retirements to only a few areas. If not enough people take the bait, other areas will be included. These are STILL VOLUNTARY. If not enough take the VOLUNTARY packages, they will then become involuntary packages.

        • 0 avatar
          highdesertcat

          Not necessarily. If they accept VOLUNTARY early retirement, they must sign a contract that states they will not sue their former employer for more money at some future date.

          In the past, the people who did not take the initial voluntary offer, thought they could sue for wrongful termination when they were eventually terminated.

          They lost badly in court.

        • 0 avatar
          Scoutdude

          Which is exactly my point, they claim it is voluntary but the reality is that they know there will not be enough volunteers so there will be a bunch of voluntolds.

          • 0 avatar
            highdesertcat

            The early bird gets the worm. IMO, if the offer is made, better to take the money and run.

            If the offer is made, obviously the employee is not a keeper.

            They find ways for keepers to stay on. Happens in every Reduction in Force (RIF).

    • 0 avatar
      Whatnext

      Yeah, voluntary means those jobs won’t be there for the next cohort of workers looking to move up. It means no new jobs will be created. A great example of the shortsightedness of people looking to pump the share price, rather than the product.

    • 0 avatar
      AdventureSteve

      LOL, yeah, I was part of a voluntary action once. They said, “Everyone who wants to be part of the organization after tomorrow, take one step forward. Not you, Steve.”

  • avatar
    anomaly149

    Well crud

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • sayahh: Yeah, you’re supposed to get rid of all the clothes you were wearing (i.e., not launder them but rather...
  • sayahh: “This is getting old.” Well, not the people killed by the shrapnels…
  • nrd515: After seeing the injuries a coworker suffered from just a minor wreck in a Courier, and seeing a LUV driver...
  • thx_zetec: We’ll see. Yes modern body stamping and paint shops are very capital intensive. But stainless steel...
  • krhodes1: DeMuro is an idiot on a good day. He went out of his way to make that Range Rover as expensive as possible...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States