Restructurings are part of CEO Jim Hackett’s broader plan to reverse declining profits
Ford Motor Co. F -1.02% said it is cutting 7,000 salaried employees, or about 10% of its white-collar workforce, part of Chief Executive Jim Hackett’s broader plan to reverse profit declines and catch up to competitors in the fast-changing car business.
Mr. Hackett said the cuts include some buyouts and layoffs that already have occurred, and the process will be completed by August, according to an email sent to employees on Monday. The cuts will save about $600 million annually and are part of a broader, multiyear restructuring that will result in about $11 billion in charges.
The reductions will include 800 layoffs in North America, where Ford already has made about 1,500 voluntary buyouts, a company spokesman said.
.. Ford is the latest car company to make deep job cuts as the industry ratchets up investment in costly technology bets, such as electric and self-driving cars. Many big auto makers are restructuring their car-manufacturing operations to funnel more money toward potential growth areas, while preparing for an era of tougher tailpipe-emissions regulations in Europe and China.
Over the past year, several of the top car makers have disclosed job cuts totaling as many as 30,000 positions globally.
Ford signaled last fall it had begun a global revamping of its workforcethat would result in layoffs. Mr. Hackett took the top job two years ago and has been working on a turnaround plan that he has said will make Ford more nimble amid the changes buffeting the car business. Those include the emergence of driverless and electric-vehicle technology and new business models that could curb private vehicle ownership. Ford had a total global workforce of roughly 199,000 employees last year, according to its annual filing. As of last fall, the company said about 70,000 of those staffers were salaried employees.
Trump Tariffs May Threaten U.S. Auto Jobs, European Executives Warn
Raising duties on imported cars could prove trickier than on steel and aluminum imports
Volkswagen AG , BMW AG and Daimler AG, which makes Mercedes—have built factories in the U.S. and Mexico in recent years that are geared to export to Europe and China, not just to sell to Americans.
The German manufacturers employ around 36,500 Americans at their factories in South Carolina, Alabama and Tennessee. If U.S. exports face retaliatory tariffs and it becomes more difficult or uncompetitive to export cars from the U.S., European auto makers would likely have to shift those jobs to Mexico or bring them back to Europe.
.. Fears of a global trade war is leading Volvo Cars Corp., the Chinese-owned Swedish auto maker, to reconsider the scope of a new plant that it is building near Charleston, S.C
.. “If the factory in South Carolina could not export, it would be half the size. It would not employ 4,000 people anymore but just 2,000,”
.. Steven Armstrong, president of Ford’s European business, dismissed Mr. Trump’s claims that American auto makers were blocked from selling cars in Europe.
“He obviously hasn’t seen our booth this morning,” Mr. Armstrong said on the sidelines of the Geneva Motor Show. “If the product fits the market, consumers will buy it.”
A Ford Exec Who Took the Long View
Populism could intensify if corporate tax cuts don’t yield benefits for workers.
Miller made Ford take automobile safety seriously while General Motors lagged behind. The choice cost Ford sales because some customers balked at paying for innovative equipment such as seat belts. Miller defended his policy as the right thing to do and said corporate leaders should always ask themselves whether they were willing to have their decisions publicly reported. Volkswagen executives have paid dearly for ignoring this advice, and they are not alone.
.. I wonder how many of today’s executives would be prepared to sacrifice sales and profits to do the right thing. Most of them have been taught that maximizing shareholder value is their sole responsibility—and if this means ignoring the needs of workers and the well-being of local communities, so be it.
.. The bills’ drafters are assuming that executives will use these funds to invest in their businesses.
But that’s not what happened the last time this was done, in 2004, when corporations were allowed to bring back overseas assets if they paid a tax of only 5%. During the next three years, the 15 companies that repatriated the most raised salaries for senior executives, cut more than 20,000 jobs, decreased investment in research, and expanded dividends and stock buybacks. All this happened despite the letter of the law, which specified that the funds be used for investing in research and the workforce and prohibited their use for compensating executives and repurchasing stock.
.. If these bills pass, average Americans will expect something in return—higher wages, better working conditions, and more opportunities for their children. If corporations take the money and run, public retribution will be severe.
.. America needs a new era of broad-minded, socially aware corporate leaders who understand the long-term relationship between the well-being of their companies and the well-being of their country.
.. An environment in which profits soar while wages stagnate may make for satisfied shareholders. But the revolt against the arrangements that sustain this imbalance is already under way. Today the targets are immigration and trade treaties. Tomorrow the demands could include restrictions on the ability of corporations to shutter plants and fire workers at will. The day after tomorrow, if massive corporate tax cuts yield no benefits for workers, we could see an intensified revolt against elites, not only cultural elites, but the captains of industry and finance as well.
Taking the long view is self-interest rightly understood. It means refraining from squeezing the last bit of profit out of your business right now in order to secure a flow of profit over time. The economy rests on a set of political arrangements that the people can revise and—if things get bad enough—upend.
Ford to Shift Production of Focus to China
Ford’s production of its Focus compact for the U.S. market is now headed for China—not Mexico—as the car maker seeks cost savings globally even as the Trump administration works to keep automotive jobs at home. Last year, Ford said it would move its once-hot Focus to Mexico in 2018.
.. The auto maker, which already makes Focuses in China, said building the next-generation Focus there rather than in an existing plant in Hermosillo, Mexico, would save the company $500 million. Ford said relocating the Focus wouldn’t result in any job losses at the Michigan plant.