Markets

Ford confirms it will cut 10% of workforce in Asia, North America

Ford confirms it will cut 10% of workforce in Asia, North America

Hourly jobs, particularly in North America, will not be cut as the company works to keep up with demand for new vehicles, which remains relatively strong.

Ford told its employees this morning that it plans to cut 10% of its salaried workforce in North America and Asia, or about 1,400 employees as the automaker wrangles with falling profits and pressure to boost its stock price amid slowing USA industry sales.

Declining to comment on any job cuts, Ford said it remained focused on its core strategies to "drive profitable growth".

The automaker expects 1,400 salaried employees to leave by the end of September, according to an emailed statement.

Share prices at the beginning of the week closed at US$10.94, barely above Ford's 52 week low of $US10.90 per share, and well below its 52 week peak of US$14.04.

The company issued a statement saying it is focused on reducing costs and improving efficiency, but said it has not announced any job cuts and won't comment on speculation. In the past three years, under the leadership of CEO Mark Fields, the value of Ford stock has fallen by 40 percent as sales volumes have grown, and the company's market value has fallen behind market values of Tesla Inc. and the General Motors Corp. Primarily, salaried workers in North America and Asia would be laid off, reported Reuters. 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. Electric auto maker Tesla Inc. recently surpassed Ford in market value even though it sells far fewer vehicles.




General Motors and Fiat Chrysler have cut hourly jobs since the end of previous year, as the first decline in USA auto sales since 2009 has resulted in excess inventories of new cars on dealer lots.

The automaker will confirm complete cost cutting plans in October. If you would like to discuss another topic, look for a relevant article.

After it faced criticism from US President Trump in January, Ford scrapped plans for a new $1.6 billion vehicle factory in Mexico.

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's profits dropped by 35 percent in the first quarter of 2017 as a result of rising costs, pricey recalls and a drop in fleet sales.


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