Dearborn — Ford Motor Co. plans to cut 1,400 total salaried positions from its North America and Asia Pacific operations by the end of September as the company tries to shore up its lackluster stock performance and boost its lagging profits.
The Blue Oval “plans to reduce 10 percent of our salaried costs and personnel levels in North America and Asia Pacific this year, using voluntary packages,” the company said in an official statement Wednesday morning. Ford said it will use early retirement and separation packages. Hourly production jobs are unaffected by the initiative.
Ford said “most skill teams” in its North America and Asia Pacific regions will be affected by the cuts, though the product development and Ford Credit, information technology, and global data and analytics teams won’t be trimmed. The company has been focused on growing its technology segments as it shifts attention to self-driving cars and other mobility areas such as ride sharing. The four unaffected segments are headquartered in Dearborn.
Ford has about 15,000 salaried employees on the skill teams affected by the buyouts, a Ford spokesman said. That includes 9,600 in the U.S., 1,000 in Mexico, 600 in Canada and 4,141 in the Asia Pacific and China region. The 1,400 buyouts — roughly 10 percent — will come from those groups of employees, a spokesman said.
The company did not break down how many jobs might be cut in the U.S. and in Michigan. Among the skill teams affected are the company’s corporate staff, finance, marketing, sales, service, government affairs, legal, purchasing, and communications teams, a spokesman said.
Ford said its operations in Europe, South America and the Middle East and Africa regions will not be included in the targeted salaried positions.
“Ford Motor Company is in my backyard,” U.S. Rep. Debbie Dingell, the Dearborn Democrat, said in a statement. “It’s the lifeblood of our community and the men and women who work there are some of the best and hardest working individuals I know. As I said yesterday, this is about jobs. Every job matters, and we need to ensure we are doing everything we can to ensure a strong manufacturing base and a healthy thriving auto industry that never returns to the times of 2008.”
The job cuts come at a delicate time for Ford. Even as President Donald Trump leans on Detroit’s automakers to support his campaign promises by adding U.S. manufacturing jobs, investors are pressuring Ford to deliver growth and larger returns.
CEO Mark Fields has been pushing the Dearborn-based automaker into the capital-devouring fields of electrification, mobility and autonomy, much to the benefit of the company’s hometown, which is seeing sweeping renovations of Ford’s footprint as part of the company’s effort to attract more tech talent.
Those investments, Fields and other Ford leadership have said, will position Ford well for the future of the rapidly changing industry.
Fields’s long-view approach has the board and shareholders restless. Last Thursday, they grilled Fields and Ford during the annual shareholders meeting on why — despite billions in investment in the company’s U.S. facilities and new technology — the company hasn’t been able to generate excitement on Wall Street. The company also has projected profits will be down roughly $1.4 billion this year.
Since Fields replaced Alan Mulally as CEO in July 2014, Ford stock prices have dropped about 40 percent. Ford’s first-quarter 2017 profits fell by 35 percent due to rising costs, pricey recalls and a drop in fleet sales. The company expects to make $9 billion this year, down $1.4 billion from 2016, when the industry saw record vehicle sales.
That has led the company to find ways to cut some $3 billion out of its operating costs this year.
Karl Brauer, executive publisher of Autotrader suspects, “Ford is maybe the highest-profile company wrestling with cost and profits and unhappy investors. It’s hard for me to believe there’s no other automaker considering these types of moves.”