Job Cuts at Ford Motor to Total 7,000 by August

Job Cuts at Ford Motor to Total 7,000 by August


Ford Motor said on Monday that it was near the finish line in its two-year effort to pare its work force.

The company said it would lay off 500 employees in the United States this week and an unspecified number over the next several weeks over the next several weeks as part of a broader plan to shrink its salaried ranks by 7,000 people, or 10 percent, with the sharpest cuts at higher ranks. Including jobs cut earlier this year, a total of 800 jobs in the United States will be cut by August, the company said.

“Consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20 percent,” Ford’s chief executive, Jim Hackett, said in an email to employees. “This will result in annual savings of about $600 million.”

The reductions in the United States include 1,500 jobs eliminated last year through buyouts. The other cuts have been overseas, where the final phase of the restructuring should be completed by the end of August.

Mr. Hackett has been cutting costs in a push to increase profits in the face of slowing sales, especially in Europe, South America and Asia. Ford reported last month that it earned $1.1 billion in the first quarter, about 34 percent less than in the same period a year earlier but better than analysts had expected.

Just three years ago, Ford was considered the healthiest of the three big Detroit automakers. But it allowed management ranks to swell, and was slow to adjust as consumers moved away from cars to sport utility vehicles. At the same time, President Trump’s tariffs on imported steel and aluminum added about $1 billion a year in costs.

Other automakers have also struggled. Ford’s main rival, General Motors, has idled or greatly scaled back operations at four plants in the United States and one in Canada. G.M. aims to trim 14,000 blue- and white-collar jobs.

Jessica Caldwell, an analyst at Edmunds, said Ford had moved aggressively to trim its payroll, but she said it was not clear whether the company had sufficiently changed its operations and culture.

“At this point, I think there’s a lot of groundwork being laid, but they need to keep strategizing to become this newer, more efficient company,” she said. “As for major changes, we aren’t really seeing that yet.”

Under Mr. Hackett, Ford has planned to all but eliminate sedans from its model line in the United States, and to stock up on new types of S.U.V.s and trucks, including a slew of electric vehicles. It is also negotiating with Volkswagen on several joint projects. The companies have agreed to cooperate in pickup trucks and delivery vans and are discussing combining their self-driving vehicle projects.

Mr. Hackett took over as chief executive two years ago as costs were rising and profits were falling. Analysts have criticized the deliberate pace of his turnaround, but investors have rewarded the company since its first-quarter earnings report. Ford shares closed at $10.28 on Monday, down slightly for the day but up from $7.90 at the beginning of the year.



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