Ford unveils plan to reduce workforce

AFP, WASHINGTON

Sun, Oct 07, 2018 - Page 16

US automaker Ford Motor Co — which announced a major restructuring in July — on Friday unveiled plans to reduce its workforce worldwide, without specifying the extent of the plan.

“We are in the early stages of reorganizing our global salaried workforce to support the company’s strategic objectives, create a more dynamic and empowering work environment, and become more fit as a business,” Ford said.

“The reorganization will result in head count reduction over time and this will vary based on team and location,” the firm said. “We will announce more specifics at the appropriate time.”

Morgan Stanley has speculated that Ford might pare more than 20,000 jobs from its global workforce of 202,000, but the automaker would not quantify how large it expected the salaried reduction to be or it if would involve involuntary separations.

Ford also could not estimate the financial consequences or say whether it would take any charges for the program.

It would take Ford until the middle of next year to determine how many employees it would eliminate, company spokeswoman Karen Hampton said in an interview.

Regions that are struggling the most might see the deepest cuts, she said.

Ford is losing money in Europe, Asia and South America, with only its operations in North America turning a profit, thanks primarily to its F-Series pickup line.

“There are areas of our business that need to become more fit and certainly this process will also help them do that,” Hampton said. “So you would anticipate those areas of the company to maybe see more reductions than others.”

On July 25, Ford announced that a revamping of the company’s operations could result in one-time charges of US$11 billion over the next three to five years.

However, it did not say whether this would result in job cuts or plant closures, but added that it was considering redesigning certain models, reallocating cash to profitable segments and reconsidering certain strategic partnerships.

In April, Ford surprised many analysts by announcing massive cost-cutting targets and plans to phase out many sedans in North America amid surging demand for sport utility vehicles and other trucks.

Ford late last month said that the company was seeing profits slashed by US$1 billion due to tariffs imposed by US President Donald Trump.

Beset with an aging model lineup, the company fell behind Fiat Chrysler Automobiles NV — as well as General Motors Co and Toyota Motor Corp — in US sales last month for the first time in a decade.

Investors are stampeding out of its stock, which has fallen 27 percent this year, and its credit rating is now one step above junk.

Additional reporting by Bloomberg