Ford Motor company is the second-largest American automaker. It’s sales slogan: “Ford Tough.” Unfortunately, Ford is having a very tough year.
Electric cars and the advent of self-driving automation is incrementally erasing the combustion engine business model that lasted for well over a century. Fewer people are buying new cars, too, a trend analysts have begun to call “peak auto.”
Plus business is just slow for Ford. Ford sells about 32 vehicles per employee compared to GM, the No. 1 automaker, which has a 52 per employee tally.
Ford stock prices fell by almost 30% in 2018. President Trump’s tariff war with China may cause the company to lose over $1 billion dollars.
Ford management is countering with a $25.5 billion restructuring plan.
In other words, Ford is planning massive, globally reaching layoffs. Thousands or tens of thousands of workers may be affected.
Ford CEO Jim Hackett said that its layoff plans is necessary for business optimization. “We must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work, and cut costs,” said Hackett via press release.
Thousands to go jobless
Ford has announced that it will lay off up to 7,000 of its workers by the end of summer 2019. However, no one knows for certain exactly how many Ford employees will be let go.
According to a recent Morgan Stanley report, Ford is reportedly planning “a global headcount reduction of approximately 12 percent.” With a global workforce of about 202,000 employees, that’s 24,000 people who could be laid off.
President Trump’s current global tariff war may not be the sole reason for Ford’s business problems, but they are a prominent one. The company publicly warned the president that auto tariffs are causing headaches for the company’s reorganization plans.
For example, Trump’s steel tariffs on China may force Ford to scale back production on the Mustang. Ironically, the Ford Mustang is also a popular model in Chinese consumer culture.
