According to a Wall Street Journal report, Ford is looking to cut its global workforce by roughly ten percent. The reason offered by Ford’s Chief Executive Officer Mark Fields is that the company is aiming to boost profits and to mitigate its sliding stock price.
We may also infer that what we’re dealing with here is the rise of the robots, who are slowly but surely taking over human labor, but that’s not politically correct to say, right? Ford has a target of $3 billion in cost-cuts for the current year for boosting profitability in the fiscal year 2018, with the domestic auto-sales stagnating.
After Chief Executive Officer Mark Fields’s three year tenure, the company’s share price dropped while Ford’s market value slipped behind Tesla (!) and General Motors.
The job cuts are expected to be announced as early as this week and they’re mostly aimed at targeting salaried employees. The end-game is to reduce the company’s global head count by ten percent (give or take) but it’s not yet clear if the plan will affect Ford’s work force from factories inside of the United States or abroad plants. According to an official statement from the company:
“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,”
“Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation,”
Ford employs over 200,000 people from all across the world and about half of its work force is based in North America. A massive 10% job cut affecting US workers during Trump’s tenure in the White House (he’s a jobs President!) has the potential to trigger a huge political backlash against the company, so we should expect for the job cuts to occur mostly abroad.
Mark Fields’s “progressive” views (as in plans) led him to invest 4.5 billion dollars into the company’s EV program during a time when sales of pickup trucks and sports cars were booming. And needless to say, this move proved to be not so inspired, to put it mildly, eroding the company’s profit margins and making for the auto maker’s stock price to fall almost 40% since his tenure as Ford CEO in mid 2014.
PHOTO: LUKE SHARRETT/BLOOMBERG NEWS