Reports indicate that Ford Motor Company is planning on cutting the number of salaried employees around the world by 10%. Some of the employees who will be spared include the tech talent that the motoring giant has hired to develop electric and autonomous cars. Hourly workers will also be spared.
“This has to be done surgically rather than randomly or otherwise you lose the talent you need the most. This will be offered to the traditional automotive staff,” a Stamford, Connecticut-based motor industry consultant, Maryann Keller, said.
In the United States Ford employs salaried workers numbering 30,000 according to regulatory filings. Globally, Ford’s total workforce is about 201,000 of which 101,000 are in North America.
The job cuts are coming at a time when there is pressure on Mark Fields, the chief executive officer of the Dearborn, Michigan-based automaker, to implement measures that will boost both the profit and the share price. Since Fields was appointed as the chief executive officer in 2014, the price of Ford’s stock has fallen by approximately 37%. This year shares of Ford have fallen by 10% while those of General Motors have declined by 3.6%. The stock price of Fiat Chrysler Automobiles, on the other hand, has increased by 23%.
Most of the employees who are targeted for the layoffs are in Asia and North America. There will also be layoffs in Europe though on a smaller scale. If Ford goes ahead to retrench in the United States, Fields risk encountering the wrath of President Donald Trump who has vowed to bring back manufacturing jobs to the U.S. Both the executive chairman and the chief executive of Ford have previously curried favor with Trump by letting him know in advance of their investment and hiring plans which have so far been largely positive.
Earlier this month, Ford temporarily rested 130 employees who were working at a truck plant in Ohio as customer demand for vehicles in the United States slows down. The slowdown in demand has not been restricted to Ford alone and extends to other automakers who have been affected by the declining demand which is coming after seven years of consistent growth.
During an earnings call in April Fields said that Ford, which had just announced a 42% decrease in adjusted earnings for the first quarter, would be focusing on containing costs since the current environment demanded so.