Ford could cut 25,000 jobs in US$11B corporate restructuring, analyst says
Ford’s US$11-billion restructuring could cost 25,000 employees their jobs, exceeding the cutbacks recently announced by General Motors, analysts at investment bank Morgan Stanley said.
Ford has yet to detail its job cuts, but Morgan Stanley analyst Adam Jonas predicts in a note to investors that they could be larger than GM’s.
“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative (US)$7 billion,” Jonas wrote.
“But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”
Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.
“These actions will come largely outside of North America,” Hampton said. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”
Ford will cut shifts at two U.S. factories in the spring and transfer workers to plants building big SUVs and transmissions for pickups in moves that the automaker said will not result in job reductions.
Jonas said other automakers will be forced to follow GM’s and Ford’s actions as the industry transforms, first to abandon factories building slow-selling sedans and ultimately to retool to build electric and selfdriving vehicles.
“We still do not believe investor expectations have fully considered the near-term earnings risk,” Jonas said.