Ford to continue salaried layoffs through spring
Ford Motor Co. is continuing to cut salaried jobs, the company said Wednesday, a process expected to culminate in the second quarter.
The Dearborn automaker is undergoing a worldwide restructuring expected to save the company $25.5 billion in the next few years. The company earlier this year began layoffs at its top levels and now is moving deeper into the salaried ranks, accelerating the workforce cuts as departments with more people are affected. The company expects to complete the process in the second quarter.
“As we have said, Ford is undergoing a Smart Redesign process that will help us create a more dynamic, agile and empowered workforce, while becoming more fit as a business," Said Deep, Ford North America communications director, said in a statement. "Our redesign will reduce bureaucracy and empower our leaders, enabling us to focus on the most value-added work and ensure we have the right cost structure around the world. This work has resulted in some separations of salaried employees and the reassignment of others."
Senior executives have said Ford is looking to flatten the organization by removing layers of management, reducing costs and giving managers more authority to make decisions while favoring lean operations and deciding which skills are needed now and for the future.
Deep did not address how many employees would be affected and where. He also did not mention how many workers so far have been laid off, though a source familiar with the process said the current tally of jobs cut so far is in the hundreds.
The company will report the cuts at the "appropriate time," Deep said. "We understand this is a challenging time for our team," he said, "but these steps are necessary."
David Kudla, chief investment strategist for Mainstay Capital Management, said the automaker is playing catch-up to General Motors Co. and Fiat Chrysler Automobiles NV.
"Ford is finally implementing another leg of its cost-cutting plan in the U.S. as salaried jobs cuts get underway," Kudla said in a statement. "Ford's stock price is suffering because investors are unclear as to what the future is at Ford. This is not a surprise and is long overdue."
Ford's shares closed down a half-percent to $8.53 on Wednesday while the broader Dow Jones Industrial Average closed up 0.58 percent at 25,703. Ford's shares are down 23 percent over the past year.
CEO Jim Hackett recently told employees in an internal memo that 2019 would be the year the 115-year-old automaker turns "the corner toward a really bright future."
Global restructuring is expected to cost Ford $11 billion to right-size struggling business units in Europe, South America and China. The automaker in February announced plans to idle a Brazilian plant and exit the South American commercial truck business as part of an effort to correct the business there.
That came a month after the automaker announced plans to cut hourly and salaried positions in Europe, possibly exit a Russian joint venture, and potentially shutter plants in Europe. Meantime, Ford is continuing to negotiate separate partnerships abroad with Volkswagen AG and the Mahindra Group of India.
Ford also has said it will redeploy hourly workers to transmission and SUV plants, but no job-cutting actions are expected at U.S. plants represented by the United Auto Workers. The belt-tightening has been a part of the plan Hackett inherited when he arrived in the c-suite in May 2017. The automaker cut 1,400 U.S. salaried workers in 2017 through early retirement and buyout options.