Ford gets ready to cut jobs
Ford Motor is making plans to cut about 10% of its global staff, which could mean about 20,000 jobs worldwide, according to CNN report.
The Wall Street Journal reported the plans late Monday evening, citing people familiar with the proposal. The paper says that most of the jobs will be salaried workers who do not have union protection, rather than the 57,000 U.S. hourly staff who work on assembly lines.
The company would not confirm or deny the report Monday, saying only that "reducing costs and becoming as lean and efficient as possible" is one of its key priorities, but that it has yet to announce any new job cuts. It would not comment on the Journal report.
But the company announced last month that it is looking to reduce costs by $3 billion in order to offset efforts to invest in "emerging opportunities."
The company has announced that efforts to develop the next generation of electric and self-driving cars would lead to a lower profit margin in the near term. Those are expensive, long-term bets that will take some time to pay off, if they ever do. Ford announced the $3 billion cost cutting goal at the same time it reported sharply lower first quarter earnings.
The company has been under pressure from shareholders about declining profits and a weak share price. Earlier this year shares of electric car manufacturer Tesla (TSLA), which is a fraction of Ford's size, passed Ford in terms of market value. Ford (F) shares are down nearly 10% so far this year.
But Ford and other U.S. automakers also have been under pressure from President Donald Trump to create U.S. jobs. As a candidate for president last year he repeatedly hammered Ford for its investment in plants in Mexico.
Ford won praise from Trump when it announced in early January that it was scrapping plans for a plant in Mexico and would invest $700 million in a Michigan plant to build electric and self-driving cars.
But the company is still moving ahead with plans announced last year to shift all small car production to Mexico. Plans for the next Mexican plant were dropped because of lower demand for small cars altogether. The small cars that were to be built there will now be built at another Mexican plant.