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Published: Thu, May 18, 2017
Economy | By Melissa Porter

Ford to cut 1400 jobs in North America, Asia

Ford to cut 1400 jobs in North America, Asia

Ford told its employees this morning that it plans to cut 10% of its salaried workforce worldwide, or about 1,400 employees as the automaker prepares to enter a period of declining US industry sales.

Ford is planning a major round of layoffs that will cut up to 20,000 jobs around the world, according to reports published Monday.

Reducing costs and becoming "as lean and efficient as possible" is a priority, Ford said in an emailed statement.

The news agency reports that by October 1, Ford will lay off only salaried workers offering them generous early retirement incentives.

Late last month, Ford told analysts and investors it would trim about $3 billion in costs. As of mid-morning, Ford shares were off by more than 1 percent, to around $10.83, continuing a almost two-week slide.

Full details of the separation packages will be available to employees in early June.

Ford's stock price has fallen almost 40 percent in the three years since Mark Fields became CEO.

At the start of the year it cancelled plans to build a new factory in Mexico after pressure from President Trump, who had also criticised General Motors' plans to produce cars there. The company said a large group of salaried workers would not be covered by the planned cuts, including those in product develop and in the Ford Credit unit.

The No. 2 USA auto maker is also facing weaker profits in Asia-Pacific, where softer sales and intensifying price competition in China are dinging profits for the region.

Ford said its operations in Europe, South America and the Middle East and Africa regions will not be included in the targeted salaried positions.

Retrenching in the USA risks reopening Ford to criticism from Pres. Trump.

Ford announced the $3 billion cost cutting goal at the same time it reported sharply lower first quarter earnings, reports CNN.

Ford fell 0.3 percent to $10.91 as of 12:06 p.m.in NY trading.

The company has also set aside $4.5 billion to develop a fleet of electrified vehicles, and intends on launching its first autonomous auto in 2021. Hourly production jobs are unaffected by the initiative.

Year-to-date, shares of Ford are down nearly 10%, and have struggled to regain their footing under current CEO Mark Fields. Ford has targeted approximately $3 billion in cuts in 2017, ahead of what many believe will be a flat period for United States auto sales.

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