Ford Likely to Eliminate 10 Percent of Global Workforce: Report

Matt Posky
by Matt Posky

The Ford Motor Company is allegedly preparing for a sweeping reduction of its global workforce. Harder days for the auto industry have been a long time coming, but reports claim the impending layoffs are specifically related to shoring up finances and turning around the company’s lagging stock valuation — meaning Ford could be the canary in the coal mine or a lone company desperate to bolster its own profitability and get angry shareholders off its back.

While the automaker has not yet confirmed the cuts, there is every indication an announcement will be made soon. When confronted with the matter, representatives have been careful to make noncommittal statements and doubly cautious not to deny anything.

“We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities,” Ford said in an official statement. “Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”

Ford’s response to the media speculation was taken down from its website earlier today for unknown reasons.

Inside sources are saying Ford has set a $3 billion cost reduction goal for the end of this year as U.S. light-vehicle demand continues to slip after seven straight years of growth. According to The Wall Street Journal, North America and Asia will lose roughly 10 percent of their salaried workforce — keeping hourly workers on board to maintain production flexibility.

First-quarter revenue actually rose for the brand by 4 percent, to $39.1 billion, though profits were zapped by recalls, higher production expenses, and Ford’s continued investment in new mobility services. Shareholders faulted CEO Mark Fields for obsessing over future technologies and a lackluster market valuation. With shareholders unwilling to tolerate the declining stock price, despite Ford performing about as well as can be expected, measures had to be taken. It’s just unfortunate they had to be employment related.

However, Ford could also be getting inevitable job cuts out of the way early in a perfect two-birds-one-stone scenario. Michelle Krebs, an analyst with AutoTrader, told the Detroit Free Press Ford may be taking a prudent action to prepare for declining U.S. industry sales. “Belt tightening comes as no surprise with sales softening and profits squeezed,” Krebs said. “Ford has been under particular pressure to take action to boost its stock price. The board meeting last week likely added pressure to get specific about cost cuts.”

Those briefed on the plan say Ford will offer generous early retirement incentives to reduce its salaried staff by October 1st. Additional employment cuts are rumored but remain unverified or have been disavowed by sources.

[Image: Ford Motor Co.]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Skor Skor on May 16, 2017

    As the hardware gets smarter, the meatware receives pink slips. Its the future of nearly all manufacturing.

    • See 2 previous
    • Highdesertcat Highdesertcat on May 16, 2017

      @skor "Do you control substantial amounts of capital or resources?" I have enough. Decades ago I started squirreling away cash money, like so many people who keep their liquid assets out of sight.

  • Arcuri Arcuri on May 17, 2017

    Paychecks for not having a job. Welcome to the future.

    • Highdesertcat Highdesertcat on May 17, 2017

      They're going to try that in Europe. I heard or read somewhere. Maybe Norway? Or one of the Scandinavian countries.

  • Scott So they are losing hundreds of millions of dollars and they are promising us a “Cheaper EV”? I wonder how that will look and feel? They killed the Fiesta because they claimed that they couldn’t make a profit on them and when I bought the first one in late 2010 they couldn’t deliver the accessories I wanted for it! Then I bought a 2016 Fiesta ST and again couldn’t get the accessories for it I wanted. They claimed that the components were going to be available, eventually. So they lost on that one as well! I don’t care about what they say anymore. I’ve moved on to another brand.
  • Michael S6 CX 70 or 90 will not be on my buying list. Drove a rental base CX 90 and it was noisy and the engine noise was not pleasant. Ride was rough for a family SUV. Mazda has to understand that what is good for Miata isn't what we expect in semi luxury SUV. My wife's 2012 Buick Enclave has much better Ride and noise level albeit at worse gas millage. Had difficulty pairing my phone with Apple CarPlay
  • Michael S6 What is the metric conversion between one million barrels and the number of votes he expects to buy.
  • NJRide This could give Infiniti dealers an extra product maybe make it a sub brand
  • Lou_BC Mr. Posky outraged over an old guy passing er releasing some gas. How are those sedan sales going?
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