Ford plans to cut thousands of salaried jobs as part of an $11 billion restructuring taking place between now and next year.
Ford Motor Co. plans to eliminate 1,400 jobs in North America, confirming earlier reports that more than 1,000 white collar jobs will be cut.
“The program is part of our underway and ongoing process to increase Ford’s global fitness and effectiveness, which includes reprioritizing products and services and staffing the company accordingly, so we’re more streamlined and successful,” the company said in a statement emailed to TheDetroitBureau.com.
“It’s consistent with what we’re doing to fix parts of the business that aren’t working well enough, accelerate in other areas and grow through investments in new technologies/businesses.”
(Ford cutting 1,000 North American jobs, more could be on horizon.)
Ford CEO Jim Hackett is leaving the company Oct. 1.
Earlier today TheDetroitBureau.com reported the automaker planned to cut 1,000 jobs with more potentially on the block.
The reduction is part of an ongoing, $11 billion restructuring, several Ford insiders told TheDetroitBureau.com.
The move is not a response to the coronavirus pandemic – though that has hammered the automaker’s earnings and will likely result in a full-year loss, the automaker has warned, but rather part of an ongoing effort to streamline the automaker’s structure.
They stressed that the plan calls for buyouts, rather than layoffs, focusing on workers who are already near to retirement, which the automaker confirmed earlier this morning.
(Shake up at Ford: Hackett out, Farley in as CEO.)
Ford CEO Jim Hackett announced a broad restructuring program, dubbed “Smart Redesign,” last year, and one of the first steps was the elimination of 7,000 salaried jobs worldwide. Last August, Morgan Stanley auto analyst Adam Jonas wrote that he expected as many as 23,000 additional job cuts would be needed.
Joe Phillippi, head of AutoTrends Consulting, said this week that Ford certainly will need to keep trimming, with a focus on designers and engineers working on conventional gas and diesel products. Like its competition, Ford is investing heavily in the electrified vehicles that are expected to begin to dominate the automotive market during the next decade,
Retiring Ford CEO Jim Hackett and soon-to-be-CEO Jim Farley, who said he plans to continue implementation of his predecessor’s efforts.
Shifting emphasis to electric and autonomous vehicles was a key to Hackett’s restructuring plan but the upcoming job cuts are likely to mark the last step in that program he will be involved in directly. Hackette unexpectedly announced plans to retire a month ago. He will be succeeded by Jim Farley on Oct. 1.
The 58-year-old Farley is expected to only accelerate the transition from classic, internal combustion technology to battery power, as well as pushing into connected and autonomous vehicle technology. He also is expected to accelerate the pace of Ford’s planned restructuring.
(“You want to be there” when the EV market takes off, Ford CEO Hackett tells shareholders.)
While analyst Phillippi said he doesn’t think Ford is responding “out of panic, per se,” with the new job cuts, he sees the company as needing to continue to streamline its operations.