Ford to cut 1,000 salaried jobs in U.S. amid overhaul
Ford Motor Co. is planning to eliminate 1,000 white-collar jobs in the United States by the end of the year, two sources close to the situation confirmed Tuesday, another step in its years-long, $11 billion restructuring.
The reductions, to be achieved under a voluntary program, are not a reaction to the COVID-19 pandemic that interrupted production for eight weeks in the spring, slammed the Blue Oval's earnings and forced most salaried employees to work from their homes.
The looming buyouts are the latest step in a sweeping reorganization intended to reverse Ford's lagging financial performance and achieve what CEO Jim Hackett calls financial “fitness.” The company expects to report a full-year operating loss for the first time in a decade.
Last year, Ford closed plants and eliminated thousands of jobs in Europe, where it has been losing money, and struggled to right-size its operations in China. In North America — the automaker’s most profitable region thanks to F-Series pickups and SUVs — the cutbacks are likely to be smaller. They are in addition to 2,300 previously announced salaried job reductions in the U.S. during Hackett’s tenure.
Ford cut 7,000 salaried positions worldwide last year in the first round of the global overhaul. Those reductions were expected to save the company $600 million a year. The carmaker had a worldwide workforce of 190,000 people at the end of 2019.
A Ford spokesman declined to comment on the latest cuts.
The pain of the pandemic also is being felt keenly elsewhere in the auto industry, with BMW AG planning unspecified cuts to its U.S. salaried workforce. The German automaker is reducing headcount “to align with current market conditions,” a spokesman said Monday. BMW’s sales in North America slid almost 40% in the second quarter.
Ford’s latest retrenchment comes as Hackett prepares to retire and make way for Jim Farley, who becomes CEO Oct. 1. Farley has promised to “swing for the fences” and return Ford’s North American region to a 10% profit margin. His first big test will be the complicated launch of a redesigned version of the cash-cow F-150 pickup at two U.S. factories.
Farley, who helped guide the company through a two-month shutdown at the outset of the pandemic, has said he sees a resolve in the workforce reminiscent of the company’s existential crisis during the Great Recession of 2009.
“Everyone at Ford knows the situation we’re in,” Farley said just before becoming chief operating officer March 1. “I can see it on the faces of my colleagues and it takes me back to about 10 years ago. I’ve seen the look before.”
The new round of white-collar job eliminations was first reported by StreetInsider.com and Bloomberg News.
Bloomberg News contributed.