25k or No? Ford CEO Discounts Job Loss Claims
Earlier this week we mentioned that Ford’s restructuring plan might closely mimic General Motors’ strategy — resulting in widespread job losses. That theory was backed by an analysis from Morgan Stanley, which presumed the Dearborn-based automaker is likely to surpass GM in terms of layoffs, based on how much each intends to free up. Back in July, Ford said it would spend roughly three to five years on its $11 billion restructuring. All told, the financial services company believes the Blue Oval might shed at least 25,000 positions.
In the report’s wake, Ford CEO Jim Hackett is urging everyone not to panic. On Tuesday, he said Ford never provided numbers to Morgan Stanley analyst Adam Jonas, who estimated the significant employee reduction just one day earlier.
While General Motors recently announced it would cut around 14,000 jobs and close seven factories worldwide by the end of next year, Ford said it was still ironing out the details on what to do with its own workforce. According to Bloomberg, Hackett said Ford will make an interim announcement on the matter sometime before next week.
Thus far, the only definitive answers the automaker has given involves mothballing shifts at specific plants and moving domestic employees to other factories instead of just laying them off. Ford also said it wants to localize as much of the damage to Europe as it can. However, it also noted that salaried workers should be ready to confront unspecified job losses by the middle of 2019.
We’re of the mind that what Ford is really considering is whether or not it’s best to parse the information out (to mitigate public outrage) or just rip the whole thing off like a Band-Aid. Our advice would be to wait until GM talks about layoffs again and follow up with a slightly less dire announcement of its own. That way, it might fly under the radar of angry journalists.
[Image: Ford Motor Co.]
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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Back to the original topic of the article. The projected layoffs are likely a case of a self-fulfilling prophecy if: A. GM shares continue to outpace Ford shares. B. GM shows/forecasts profitability due to lower wage costs and legacy costs C. Ford shares continue to be the beaten rented mule of the car business. The Ford Family does not take kindly to being teased at the country club and would hate to have to do something drastic, like sell voting stock. Another question. Given that most of the transition away from cars is to unibody crossovers, is the shift such a big deal? If people suddenly decide that sedans, coupes and hatchbacks are cool again, how hard would it be for manufacturers to redesign and retool a bunch of unibody crossovers back into cars? I mean, an Escape is a packed-up Focus in many ways. The new RAV4 is based on a platform shared by Camrys, CH-R's and many others... Just asking.
There has been massive global overcapacity in the auto industry since the 1990s. Factory closures have been, and will continue to be, a fact of life around the world.