Ford plans job cuts to boost profits

Bruno Cirelli
Mag 20, 2017

Ford shares are down almost 10 percent so far this year.

The staff hits will affect North America and Asia, a Ford source told Reuters on Monday.

Ford plans to make the cuts through early retirements and "special separation packages" (also expected to be voluntary) for those not eligible for early retirement.

Ford Motor Co. on Wednesday said it plans to cut 10 percent of its salaried employees in North America and Asia to cut costs amid slowing sales and growing investments in new technology.

The cuts are the biggest to Ford's US white collar staff since 2007, when 7,200 workers took voluntary buyout packages.

About two-thirds of the planned cuts are in North America and the rest in Asia. The company does not however, intend to cut its hourly workforce or its production. Ford's total salaried workforce in those regions is 15,000, said Ford spokesman Mike Moran.

The company, which employs a total of about 30,000 salaried workers in the USA, did not break down the number of employees in MI that could be impacted. While the ultimate number could come in substantially lower than the current 10% workforce reduction estimate, it's a good bet that Ford will indeed cut jobs in the near future.

But investors are anxious about slowing sales and an industry that could be dominated by autonomous vehicles and auto sharing in the future.

The president has repeatedly roasted companies for planning to move jobs overseas, or make substantive cuts to their USA workforce. President Donald Trump throughout his early days in office has pushed for automakers to create jobs in the U.S.

Ford's market capitalization has been surpassed by Tesla Inc TSLA.O , which has sold just a fraction of Ford vehicles.

Ford won praise from Trump when it announced in January that it was scrapping plans for a plant in Mexico and would invest $700 million in a MI plant to build electric and self-driving cars, CNN reported.

Ford Motor Co CEO Mark Fields speaks at the Ford press conference at the 2016 Consumer Electronics Show in Las Vegas. "I think investors understand our strategy".

Ford shares were down 0.13 percent in late afternoon trading, and are down almost 40 percent since Fields took over as CEO in July 2014.

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