Ford to cut 1400 jobs by the end of this summer

Posted May 20, 2017

The company said it plans to reduce 10 per cent of its salaried costs and personnel levels in North America and Asia Pacific this year, using voluntary packages.

Ford plans to offer financial incentives to convince salaried employees to depart voluntarily, including generous early retirement offers, a person briefed on the plan said.

Ford's move to cut its salaried workforce instead of assembly-line workers could protect it from scrutiny by President Donald Trump.

The move could put the USA automaker on a collision course with President Donald Trump, who has made boosting auto employment a top priority.

Most of the jobs will be salaried workers who do not have union protection, rather than the 57,000 United States hourly staff who work on assembly lines, CNN quoted The Wall Street Journal as saying in the report on Monday night.

Ford believes it will meet its targets by voluntary means and doesn't expect involuntary layoffs, spokesman Mike Moran said Wednesday.

Ford's global headcount sits at some 200,000 employees, so 10 percent comes out to about 20,000 potentially lost jobs.

"We have not announced any new people efficiency actions, nor do we comment on speculation", he said. According to reports the nation's second-largest automaker earned $1.7 billion in the fourth-quarter quarter, the highest pre-tax profit in a decade, up 55% from a year earlier.

The buyouts are part of a strategy Ford laid out last September at its investor day conference, when CFO Bob Shanks said the automaker would be looking to save about $3 billion per year each of the next three years as costs rise. Ford's operations in Europe and South America have already seen workforce reductions.

General Motors and Fiat Chrysler have cut hourly jobs since the end of previous year, as the first decline in US auto sales since 2009 has resulted in excess inventories of new cars on dealer lots.

Ford's shares have lost more than a third of their value since Mark Fields became CEO in 2014.

Unlike job cuts in the past, this time Ford's moving to slash costs while the company is solidly profitable.

In January, Ford also added 700 MI jobs, following criticism from Trump over plans to increase production in Mexico.

It is unclear if those jobs will be affected by the cuts. They're also unsure about Ford's heavy spending on technology with an uncertain future, like its recent investment of $1 billion in Argo AI, an artificial intelligence startup.