Ford to cut 1,400 salaried jobs in North America, Asia
DETROIT -- Ford Motor Co. on Wednesday said it plans to cut 10 percent of its salaried employees in North America and Asia to reduce costs amid slowing sales and growing investments in new technology.
The automaker will offer voluntary early retirement and special separation packages to roughly 15,000 white-collar workers in the two regions combined and expects the 1,400 cuts to come by the end of September.
Ford said two-thirds of the offers will be made in North America, although it does not know how the acceptance rates will break down by region. Ford said nearly all of its “skill teams” will be affected, except for product development, Ford Credit, manufacturing, IT and global data and analytics.
A Ford spokesman said the reductions will affect corporate staff, including the finance, legal, human resources, communications, government, marketing, sales and service departments.
"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," the company said in a statement.
"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 buyouts are part of a strategy Ford laid out last September at its investor day conference, when CFO Bob Shanks said the automaker would be looking to save about $3 billion per year each of the next three years as costs rise. He said at the time the “efficiencies” would come in materials, suppliers and manufacturing overhead.
Ford targeted Asia and North America because other regions across the globe have either already faced recent cuts or are too small to be pruned. Ford in Europe has cut hundreds of salaried and manufacturing jobs in recent years as part of its turnaround plan that’s allowed it to make a profit each of the past two years. It also has reduced jobs in South America. The Middle East and Africa was spared because it’s a new, emerging business unit, Ford said.
Last week, Fields faced questions from the company’s board of directors about his strategy for the company. Shareholders complained about the lagging stock price and asked why Ford was investing in the future if it hurt profits today. Since Fields became CEO in 2014, Ford’s stock price has fallen nearly 40 percent.
Details to come
It’s unclear if Wednesday’s announcement was a direct result of last week’s events.
The Wall Street Journal reported the intended cuts on Monday, and Reuters later clarified roughly how many and where the cuts would come.
Ford said it will give employees details on the buyout packages in June.
The jobs cuts come at a time when Washington has taken a keen interest in the auto industry. President Donald Trump throughout his early days in office has pushed for automakers to create jobs in the U.S.
Ford recently announced it would add 700 manufacturing jobs in Flat Rock, Mich., as part of an investment to build autonomous and electrified vehicles there. It also said earlier this year that it would add or keep 130 jobs at its Romeo engine plant north of Detroit.
President Trump, who has been quick to comment on Ford and other automaker’s jobs announcement, was silent Wednesday morning on Twitter. A spokesman said the company had “communicated with stakeholders in Washington” regarding the job cuts.
Ford’s stock fell to a 52-week low Wednesday morning, at one point trading for $10.67. It closed the day down 1.6 percent to $10.76 a share.
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