Ford To Cut 1,400 Jobs In North America, Asia
Ford is cutting 1,400 jobs in North America and Asia Pacific this year in an effort to boost profits.
The company will offer voluntary early retirement and separation packages to around 10 percent of its non-factory workers in departments like sales, marketing and human resources. It expects the actions to be complete by the end of September.
Ford believes it will meet its targets by voluntary means and doesn't expect involuntary layoffs, spokesman Mike Moran said Wednesday.
"We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities," Ford said in an email sent to employees early Wednesday. "Reducing costs and becoming as lean and efficient as possible also remain part of that work."
The offer will be open to about 15,300 workers, including 9,600 in the U.S., 1,000 in Mexico, 600 in Canada and 4,141 in Asia.
Certain areas of the business won't be targeted, including Ford's product development and credit divisions. Factory workers and white-collar employees in Ford's plants won't be affected. Information technology and analytics workers also aren't targeted.
The Dearborn, Michigan, company says it will release more details to employees in June.
Ford has been hiring steadily since the recession as U.S. vehicle sales reached record highs. In its 2011 contract with the United Auto Workers union, it pledged to hire 12,000 factory workers by 2015. Earlier this year, it announced it would add 700 workers to a suburban Detroit plant in 2018 to make electric and self-driving vehicles.
But investors are clearly worried that sales in the U.S., Ford's biggest market, are peaking. They're also unsure about Ford's heavy spending on technology with an uncertain future, like its recent investment of $1 billion in Argo AI, an artificial intelligence startup. Ford's stock price has fallen nearly 40 percent over the last three years.
Ford shares fell 6 cents to $10.88 in premarket trading after the company announced the reductions.
Ford's net income fell 35 percent to $1.6 billion in the first quarter. It expects to earn a pretax profit of $9 billion this year, down from a record of $10.4 billion in 2016.