Ford to cut 1,400 jobs to boost prof­its, stock price

Fo­cus on white col­lar staff in se­lect ar­eas

The Hamilton Spectator - - BUSINESS - DEE-ANN DURBIN DETROIT —

Ford — fac­ing heavy costs for new tech­nol­ogy and slow­ing U.S. car sales — is cut­ting 1,400 non-fac­tory jobs in North Amer­ica and Asia Pa­cific this year in an ef­fort to boost prof­its and res­cue its sag­ging stock price.

The com­pany will of­fer vol­un­tary early re­tire­ment and sep­a­ra­tion pack­ages to around 10 per cent of salaried work­ers in de­part­ments such as sales, mar­ket­ing and hu­man re­sources. The pack­ages will be of­fered to about 15,300 work­ers, in­clud­ing 600 in Canada, com­pany spokesper­son Mike Mo­ran said Wed­nes­day. It ex­pects the ac­tions to be com­plete by the end of Septem­ber.

The cuts are the big­gest to Ford’s U.S. white col­lar staff since 2007, when 7,200 work­ers took vol­un­tary buy­out pack­ages. Ford be­lieves it will meet its tar­gets by vol­un­tary means, Mo­ran said.

“We re­main fo­cused on the three strate­gic pri­or­i­ties that will cre­ate value and drive prof­itable growth, which in­clude for­ti­fy­ing the profit pil­lars in our core busi­ness, trans­form­ing tra­di­tion­ally un­der­per­form­ing ar­eas of our core busi­ness and in­vest­ing ag­gres­sively, but pru­dently, in emerg­ing op­por­tu­ni­ties,” Ford said in an email sent to em­ploy­ees early Wed­nes­day. “Re­duc­ing costs and be­com­ing as lean and ef­fi­cient as pos­si­ble also re­main part of that work.”

The of­fer will also be open to about 9,600 work­ers in the U.S., 1,000 in Mex­ico and 4,141 in Asia. The com­pany says it will re­lease more de­tails to em­ploy­ees in June.

Ford isn’t the only au­tomaker look­ing to get leaner as U.S. de­mand for new ve­hi­cles slows. Last month, Gen­eral Mo­tors chief fi­nan­cial of­fi­cer Chuck Stevens said GM was con­sid­er­ing cuts to its white col­lar staff in or­der to rein in costs.

Cer­tain ar­eas of the busi­ness won’t be tar­geted, in­clud­ing Ford’s prod­uct de­vel­op­ment and credit di­vi­sions. Fac­tory work­ers and white-col­lar em­ploy­ees in Ford’s plants won’t be af­fected. In­for­ma­tion tech­nol­ogy work­ers also aren’t tar­geted.

Ford also isn’t likely to cut jobs in its emerg­ing busi­nesses, like its re­search cen­tre in Palo Alto, Calif. Ford said last Au­gust that it planned to hire more than 100 engi­neers, re­searchers and oth­ers in Palo Alto.

Ford has been hir­ing steadily since the re­ces­sion as U.S. ve­hi­cle sales roared back to reach record highs. Ford hired more than 15,000 fac­tory work­ers be­tween 2011 and 2015.

But in­vestors are clearly wor­ried that af­ter seven straight years of growth, U.S. sales are peak­ing and Ford’s share of that crit­i­cal mar­ket has been fall­ing.

In­vestors are 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.

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