Additional Layoffs May Be Part of Ford’s New Plans
Fears are mounting at Ford Motor Company factories over possible additional Ford layoffs after the company’s shocking announcement this week.
Ford is planning to cut billions of dollars in costs and shift its focus away from sedans and internal combustion engines in a bid to win back lost market share and spur sales growth. This initiative may cause many of its employees to face the exit doors.
CEO Jim Hackett announced the big strategic change on Tuesday, through which Ford aims to shed $14.0 billion in costs in the next five years. In addition, the company will be producing more trucks, electric vehicles, and hybrid cars.
The company-wide, high-level restructuring plan is very likely to result in hundreds of job cuts.
About 1,400 employees were let go earlier this year as rumors made the rounds that America’s second-largest automaker was planning to cut as much as 10% of its global workforce in 2017. An estimated 20,000 workers were expected to be impacted.
Ford’s latest announcement comes at a critical time—the automaker recently faced its first quarter of declining profits in nearly seven years after the Great Recession.
This year has been particularly hard on the U.S. auto industry. All of the “Detroit Three” companies—Ford, General Motors Company, and Fiat Chrysler— have been finding it hard to sell their cars—particularly passenger cars—as American consumer tastes shift towards SUVs and semi-trucks.
The three big American automakers have been scaling back production and cutting jobs to get their output in line with low consumer demand.
With factories eliminating shifts or shutting down, thousands of auto industry factory workers have already lost their jobs, while others are temporarily unemployed but hoping they will someday be called back to work. But with the large automakers beginning to make strategic changes to their business models, chances are that many of the temporary furloughs will eventually become permanent layoffs.
Ford has a workforce of about 200,000 employees around the world, with about half of them employed in North America.
“Ford to cut costs $14-billion, shift away from sedans: CEO,” The Globe and Mail, October 4, 2017.