Ford Motor Co. plans to trim about 10 percent of its global salaried workforce while retaining the tech talent it’s recruited to develop driverless and electric cars, according to a person familiar with the strategy.
Jobs are being cut as Ford’s directors pressure Chief Executive Officer Mark Fields to boost profit and a lagging stock price. The reductions are expected to target salaried employees mostly in North America and Asia, said the person, who asked not to be identified disclosing internal discussions. Some are also expected in Europe, where Ford already has retrenched.
Fields is working to cut costs by about $3 billion this year. With Ford’s stock down about 37 percent since he became CEO in 2014, Fields is caught between pleasing a board pressuring him to boost fading profits while placating President Donald Trump, who is pushing automakers to add U.S. jobs. Ford also is pouring billions into electric, self-driving cars and ride-sharing as its struggles more than General Motors Co. with a slowing U.S. market.
“This has to be done surgically rather than randomly or otherwise you lose the talent you need the most,” said Maryann Keller, an industry consultant in Stamford, Connecticut. “This will be offered to the traditional automotive staff.”
Ford fell 0.3 percent to $10.91 as of 12:06 p.m. in New York trading. The shares have declined 10 percent this year, compared with a 3.6 percent drop for GM and 23 percent gain by Fiat Chrysler Automobiles.
Reducing costs and becoming “as lean and efficient as possible” is a priority, Ford said in an emailed statement. “We have not announced any new people efficiency actions, nor do we comment on speculation.”
Retrenching in the U.S. risks reopening Ford to criticism from Trump. Fields and Executive Chairman Bill Ford have curried favor with the president this year, giving him advance notice of hiring and investment at American plants and canceling a small-car factory in Mexico. Trump has pointed to carmakers’ plans and claimed they’re restoring American manufacturing because of him.
Ford temporarily laid off 130 workers at an Ohio truck plant earlier this month to match lagging output with slower customer demand. Automakers have widespread shutdowns planned for the summer to adjust to the U.S. car market’s recent slowdown following seven years of gains, conflicting with Trump’s more upbeat portrayal of the state of the industry.
Fields, 56, discussed the cost cuts that Dearborn, Michigan-based Ford plans for this year in a call with analysts last month when the company posted a 42 percent plunge in first quarter adjusted earnings.
“We are continuing our intense focus on cost and the reason for that is not only mindful of the current environment that we’re in, but also I think preparing us even more for a downturn scenario,” Fields said April 27.
Ford earlier this year hired 400 employees from BlackBerry Ltd. to help develop wireless technology, deepening an ongoing partnership between the two companies involving in-car connectivity. It’s also investing $1 billion in a Pittsburgh-based artificial intelligence company Argo AI, which will develop the virtual driver system for fully autonomous vehicles scheduled to arrive in 2021. Founders Bryan Salesky and Peter Rander are former leaders of the self-driving car teams at Uber Technologies Inc. and Alphabet Inc.’s Google.
In the U.S., Ford has about 30,000 salaried workers. The company employed a total of about 201,000 workers as of the end of last year, including about 101,000 in North America, according to a regulatory filing. Hourly workers won’t be targeted in this round of cuts, according to the person familiar with the plan.
The Wall Street Journal reported on Ford’s job-reduction plans late Monday.
(c) 2017, Bloomberg · Keith Naughton