Ford Likely to Eliminate 10 Percent of Global Workforce: Report
The Ford Motor Company is allegedly preparing for a sweeping reduction of its global workforce. Harder daysÂ for the auto industry have been a long time coming, but reports claim the impending layoffs are specifically related toÂ shoring up finances and turning around the company’s lagging stock valuationÂ â€” 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.
â€œWe 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.â€Â
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 â€”Â 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.Â With shareholders unwilling to tolerate the declining stockÂ 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 couldÂ also be getting inevitable job cuts out of the way early in a perfect two-birds-one-stone scenario.Â Michelle Krebs, an analyst with AutoTrader, told the Detroit Free PressÂ Ford may be taking a prudent action to prepare for declining U.S. industry sales.Â “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.]
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May 16, 2017 at 05:04AM