Thursday, 21 September, 2017

Ford Motor to cut 10 per cent of salaried workforce

Mark Fields Ford CEO Mark Fields Ford CEO
Nellie Chapman | 19 May, 2017, 06:45

USA automaker Ford Motor is making plans to cut about 10 per cent of its global staff, which could mean about 20,000 jobs worldwide, according to a media report.

The company will offer voluntary early retirement and separation packages to around 10 percent of its salaried workers in departments such as sales, marketing and human resources.

Ford said the cuts would amount to about 10 percent of a group of 15,000 managers and other non-production workers and would reduce labor costs for that segment by 10 percent. The Dearborn, Michigan, company says it will release more details to employees in June. The automaker is under intensifying pressure from shareholders to improve its profits and boost its lagging stock price.

This move could put the automaker on a direct collision course with U.S. President Donald Trump, who made increasing employment in the auto industry one of his top priorities.

The job cuts are also not expected to impact hourly workers at Ford's factories or its Europe and South America operations, which have previously undergone job cuts.

On 27th of April, Ford reported its first-quarter earnings and announced that it had plans to slash $3 billion in costs.

Ford has also been watching its US sales slide in recent months, a downturn even steeper than the overall decline of the American market after three years of record demand.

Ford is to announce a plan to cut 10% of its global workforce later this week, the Wall Street Journal reported late Monday.

Roughly half of Ford's employees are based in North America.

The company's share price has fallen by almost 40% since Mr Fields took up his role in the middle of 2014.

Ford has been hiring steadily since the recession as US vehicle sales reached record highs.

Flying in the face of Trump's vaunted political campaign to increase the number of manufacturing jobs in America, the layoffs are projected to swell Ford's corporate coffers by some $3 billion, according to Motor Trend.

Ford said in January it was cancelling a planned Mexico plant and adding 700 jobs in MI. Worldwide, FoMoCo employs about 200,000 people, which means that the job cuts could involve 20,000 people. But with Ford spending heavily on autonomous-drive, electric vehicles and mobility solutions, investors are wondering how much those investments will cut into future profits. He has a $10 price target on the shares.