Please ensure Javascript is enabled for purposes of website accessibility
Seeing a Rough Road Ahead, Ford Cuts 7,000 White-Collar Jobs
gvw_ap_news
By Associated Press
Published 5 years ago on
May 20, 2019

Share

DETROIT — Ford revealed details of its long-awaited restructuring plan Monday as it prepared for a future of electric and autonomous vehicles by parting ways with 7,000 white-collar workers worldwide, about 10 percent of its global salaried workforce.

“To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts.” — CEO Jim Hackett

The major revamp, which had been under way since last year, will save about $600 million per year by eliminating bureaucracy and increasing the number of workers reporting to each manager.

In the U.S. about 2,300 jobs will be cut through buyouts and layoffs. About 1,500 have left voluntarily or with buyouts, while another 300 have already been laid off. About 500 workers will be let go starting this week, largely in and around the company’s headquarters in Dearborn, Michigan, just outside Detroit.

The layoffs are coming across a broad swath of the company including engineering, product development, marketing, information technology, logistics, finance and other areas. But the company also said it is hiring in some critical areas including those developing software and dealing with self-driving and electric vehicles.

In a memo to employees, Monday, CEO Jim Hackett said the fourth wave of the restructuring will start on Tuesday, with the majority of U.S. cuts being finished by May 24.

“To succeed in our competitive industry, and position Ford to win in a fast-charging future, we must reduce bureaucracy, empower managers, speed decision making and focus on the most valuable work, and cost cuts,” Hackett wrote.

Companies Have Said the Cuts Are Needed

It’s the second set of layoffs for Detroit-area automakers, even though the companies are making healthy profits. Sales in the U.S., where the automakers get most of their revenue, have fallen slightly but still are strong.

In November, General Motors announced it would shed up to 14,000 workers as it cut expenses to prepare for a shift to electric and autonomous vehicles. The layoffs included closure of five factories in the U.S. and Canada and cuts of another 8,000 white-collar workers worldwide. About 6,000 blue-collar positions were cut, but most of laid-off factory workers in the U.S. will be placed at other plants mainly that build trucks and SUVs.

Both companies have said the cuts are needed because the companies face huge capital expenditures to update their current vehicles and develop them for the future.

At GM, the cuts brought withering criticism from President Donald Trump and Congress, especially the closing of a small-car factory in Lordstown, Ohio. Trump campaigned on bringing factory jobs back to the industrial Midwest. GM has since announced a possible deal to sell the Lordstown plant to a startup electric vehicle maker, but it hasn’t been finalized.

Ford’s white-collar employees had been fearful since last July when the company said the restructuring would cost $7 billion in cash and hit pretax earnings by $11 billion over the next three to five years. Many have been upset that it took so long for the company to make decisions.

Ford Is Departing From Past Practices

Factory workers have not been affected by the restructuring thus far, as the company has retooled car plants so they can build more popular trucks and SUVs.

The layoffs, while large, weren’t as bad as many had expected. Morgan Stanley analyst Adam Jonas predicted 25,000 white-collar job cuts late last year, a number that Ford would not deny.

“Ford is a family company and saying goodbye to colleagues is difficult and emotional.” — CEO Jim Hackett

Hackett said in the memo that Ford is departing from past practices and letting laid-off employees stay a few days to wrap up their jobs and say good-bye to colleagues. In the past, laid-off workers would have had to pack up and leave immediately.

“Ford is a family company and saying goodbye to colleagues is difficult and emotional,” Hackett wrote.

Hackett told workers that under the restructuring, managers now will have seven people reporting to them on average, up from five before changes were initiated began. That reduces management bureaucracy by one-third from before the “Smart Redesign” began.

Before the restructuring, Ford had 14 organizational layers, but that will drop to nine or less by the end of the year, Hackett’s memo said.

DON'T MISS

Trump Criticizes Judge and His Daughter After Gag Order in Hush-Money Case

DON'T MISS

Police Had About 90 Seconds to Stop Traffic Before Baltimore Bridge Fell. 6 Workers Are Feared Dead

DON'T MISS

NBC Has Cut Ties With Former RNC Head Ronna McDaniel After Employee Objections, Some on the Air

DON'T MISS

Chinese Leader Xi Issues a Positive Message to US Business Leaders as Ties Improve

DON'T MISS

Cargo Ship Lost Power, Issued Mayday Before Hitting Baltimore’s Bridge

DON'T MISS

Trump’s Social Media Company Soars Nearly 50% in Its First Day of Trading on Nasdaq

DON'T MISS

Supreme Court Appears Likely to Preserve Access to Abortion Medication Mifepristone

DON'T MISS

Court Agrees to Pause Trump’s Civil Fraud Judgment if He Puts up $175M

DON'T MISS

Fresno Police Nab Suspect in March 14 Slaying on Bulldog Lane

DON'T MISS

This Kitty Checks All the Boxes: ‘Happy, Playful, Loves to Eat’

No data was found

Trump Criticizes Judge and His Daughter After Gag Order in Hush-Money Case

11 hours ago

CA Insurance Market ‘in Chaos,’ Says Former Insurance Commissioner. Can Lara Fix It?

12 hours ago

Stock Market Today: S&P 500 Sets a Record After Wall Streets Breaks Out of Its Lull

12 hours ago

House Speaker Mike Johnson Headed to Fresno on April 4

12 hours ago

Bredefeld, Smittcamp Debate the Salary of Valley Children’s CEO

13 hours ago

CA’s Liberal Government Has a Long History of Caving to Special Interests

13 hours ago

Corrupt Process? Bullard, Edison Parents Blast Handling of Superintendent Search

13 hours ago

Police Had About 90 Seconds to Stop Traffic Before Baltimore Bridge Fell. 6 Workers Are Feared Dead

14 hours ago

NBC Has Cut Ties With Former RNC Head Ronna McDaniel After Employee Objections, Some on the Air

15 hours ago

Here Are Some Numbers That Will Help You Get Your March Madness Fix for the Sweet 16

15 hours ago

Ukrainian Navy Says a Third of Russian Warships in the Black Sea Have Been Destroyed or Disabled

KYIV, Ukraine — Ukraine has sunk or disabled a third of all Russian warships in the Black Sea in just over two years of war, the navy spokes...

6 hours ago

6 hours ago

Ukrainian Navy Says a Third of Russian Warships in the Black Sea Have Been Destroyed or Disabled

Composite image of President Trump and Devin Nunes
10 hours ago

Wired Wednesday: How Going to Work for Trump Turned Devin Nunes Into a Millionaire

11 hours ago

Former Sen. Joe Lieberman, Democrats’ VP Pick in 2000, Dead at 82

11 hours ago

Trump Criticizes Judge and His Daughter After Gag Order in Hush-Money Case

12 hours ago

CA Insurance Market ‘in Chaos,’ Says Former Insurance Commissioner. Can Lara Fix It?

12 hours ago

Stock Market Today: S&P 500 Sets a Record After Wall Streets Breaks Out of Its Lull

12 hours ago

House Speaker Mike Johnson Headed to Fresno on April 4

13 hours ago

Bredefeld, Smittcamp Debate the Salary of Valley Children’s CEO

MENU

CONNECT WITH US

Search

Send this to a friend