FILE
- In this Jan. 14, 2018, file
photo Ford President and CEO Jim
Hackett prepares to address the
media at the North American
International Auto Show in
Detroit. Ford is cutting about
7,000 white-collar jobs, which
would make up 10% of its global
workforce. The company has said
it was undertaking a major
restructuring, and on Monday,
May 20, 2019, said that it will
have trimmed thousands of jobs
by August. In a memo to
employees, Monday, Hackett said
the fourth wave of the
restructuring will start on
Tuesday, May 21 with the
majority of cuts being finished
by May 24. (AP Photo/Carlos
Osorio, File)
Seeing a
twisting
road
ahead,
Ford
cuts 7K
white-collar
jobs
By
TOM
KRISHER
APNews.com
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% of
its
global
salaried
workforce.
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,
Ford
said.
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.
All will
get
severance
packages.
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
and
final
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.
It’s
the
second
set of
layoffs
recently
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
they
face
huge
capital
expenditures
to
update
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.
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.
Back
in
March,
Hackett
had told
employees
that
Ford had
added
too many
workers
after
the
Great
Recession,
going
from
160,000
worldwide
in 2009
back to
about
200,000
as the
economy
improved.
While
Ford was
growing,
its
revenue
growth
didn’t
justify
adding
that
many
employees,
he
explained.
In
Monday’s
memo,
Hackett
said
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.
Shares
of Ford
closed
Monday
down
slightly
to
$10.28.