Ford Prepares for Mass Layoffs After Losing $1 Billion to Trump’s Trade Tariffs, Report Says

[Zippyjuan]

https://gvwire.com/2019/05/14/ford-p...s-report-says/

Ford Prepares for Mass Layoffs After Losing $1 Billion to Trump’s Trade Tariffs, Report Says
Ford is having a bad year in 2018. Its stock is down 29%, and the tariffs imposed by President Trump have reportedly cost the company $1 billion, as the company is in the midst of a reorganization. Now, the company is announcing layoffs.

Jim Hackett, Ford’s CEO, is working to engineer a $25.5 billion restructuring of the automaker, hoping to cut costs and remain competitive, the Wall Street Journal reports. But auto sales are down, and one reason is the trade tariffs that Trump has imposed on metals and other goods. According to Bloomberg, Hackett has said they have already cost the company $1 billion in profit and could do “more damage” if the disputes aren’t resolved quickly.

Ford, the No. 2 U.S. automaker by sales, is making aggressive job cuts as part of that reorganization, NBC News reported. While the company hasn’t said how many jobs will be lost, a report from Morgan Stanley estimates “a global headcount reduction of approximately 12 percent,” or 24,000 of Ford’s 202,000 workers worldwide.”

https://www.npr.org/2019/05/20/72497...ried-workforce

Ford Slashes 10% Of Its Global Salaried Workforce

Ford is eliminating about 7,000 white-collar jobs — or about 10% of its salaried workforce — as part of a previously announced companywide global restructuring.

About 800 U.S. workers will lose their jobs between now and August. Some workers are being laid off, while others are being reassigned, Ford says.

It says the company's management team is shrinking by close to 20% as part of the restructuring, which will save Ford about $600 million a year.

In a letter to employees, Ford CEO Jim Hackett said the restructuring is reducing bureaucracy and making Ford "flatter" — meaning most teams have no more than nine layers of management, rather than up to 14.

He acknowledged saying goodbye to colleagues is "difficult and emotional."

"We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few days to wrap up and say goodbye," he wrote.

Ford's massive restructuring, expected to cost about $11 billion, is designed to cut costs dramatically. The company has seen profits slump, and while its North American operations continue to make money — thanks largely to the wildly popular F-150 pickup — Ford's operations overseas are struggling.

Hackett has promised that the "organizational redesign" currently underway will turn the company around.

[Zippyjuan]

In February, GM announced 14,000 layoffs.

https://www.foxbusiness.com/industri...by-the-numbers

GM's 14,000 layoffs by the numbers


General Motors Opens a New Window. announced last year it would lay off Opens a New Window. 14,000 workers in the U.S. as it shifts its focus away from passenger cars Opens a New Window. in favor of producing SUVs and pickups, as well as electric and self-driving vehicles.

The decision elicited intense federal Opens a New Window. backlash. President Trump Opens a New Window. tweeted that he was “very disappointed” and said the administration would examine whether to cut subsidies for the Detroit carmaker.

A White House spokeswoman did not immediately answer whether the administration is still considering it – though there is skepticism over exactly what federal support could be eliminated, aside from potentially a tax credit for electric cars that will gradually expire for GM over the next several quarters given it has already sold more than 200,000 plug-in vehicles.

The reductions are coming from both GM’s salaried and hourly workforces, though a large portion of the individuals who lost manufacturing jobs could be relocated to other plants.

While the announcement led to some immediate volatility in GM’s stock, it has since recovered. The company on Wednesday reported better-than-expected earnings for the fourth quarter, including $2.8 billion in profits in the period.

Below is a breakdown of where GM is at in its layoffs:

Hourly employees: 2,800

GM’s decision to end production in four of its U.S. plants impacted 2,800 hourly workers. The carmaker has said it will have other positions for each of those employees.

“As we’re shrinking production in those plants…we’re growing capacity in other plants where we need additional workers,” a spokesman said.

All of those hourly workers will be given priority for the 1,000 vacancies GM is seeking to fill at its Michigan factory.

More details at the link.

[acptulsa]

https://gvwire.com/2019/05/14/ford-p...s-report-says/






https://www.npr.org/2019/05/20/72497...ried-workforce

Ford management is clearly trying to blame Trump for its own mistakes. Surely tariffs can't mean that much to a company that has been producing cars on a minimum of four continents for a minimum of six decades.

And I think it's pretty clear Ford's biggest mistake in the last six decades was paying corrupt Congress members to legislate it into advantageous positions (like using CAFE to eliminate six passenger cars because it was #1 in light trucks) instead of making itself more competitive in free markets.

[NorthCarolinaLiberty]

In February, GM announced 14,000 layoffs.

Dude, How many jobs have you had in the past 25 years (beside your RPF gig)? One at the grocery, right?

I don't even bother reading this stuff unless I really dig in. I have seen so many places "layoff" simply because they are replacing high paid workers with new, entry level hires.

It's a typical tool middle management uses when they are told to shape up. Easiest thing is to fire people. Replace them in 3 months.

BFD.

[oyarde]

https://gvwire.com/2019/05/14/ford-p...s-report-says/






https://www.npr.org/2019/05/20/72497...ried-workforce

If sales are down it is unrelated to any tariffs anywhere .

[Swordsmyth]

Excessive angst over Ford’s announcement that it was cutting 10 percent of its workforce led CNBC to revise its initial coverage: “This article was updated [corrected] to reflect that Ford is cutting about 10% of its white-collar employees, not 10 percent of its total global workforce.”
CNBC didn’t complete its correction. Ford has 200,000 employees worldwide, with 70,000 of them being salaried, the rest hourly. The cuts apply only to the white-collar positions, and most of them are overseas. Only 2,300 of them apply to employees in the United States, and 1,500 of them accepted buyouts last year. That leaves just 800 to be laid off this year, each of them with severance packages. That’s four-tenths of one percent, CNBC, not 10 percent.


To put Ford’s announcement in perspective, let’s remember the enormous upheaval taking place in the automotive world: Buyers are switching from regular vehicles to SUVs and pickups in such large numbers that Ford, GM, VW, and other carmakers are all but eliminating standard vehicle production. The coming wave of technology will provide impetus to electric and autonomous, self-driving vehicles, which are expected to represent a much larger portion of new sales by 2025, and likely even sooner.
For that revolution, Ford, GM, Volkswagen, and other car makers are hurrying to make the shift, cutting some 30,000 management positions worldwide. But not a single worker in any factory is being touched by these layoffs. It’s all about becoming leaner and meaner at the top where those decisions are being made.

In his letter to his employees, Ford CEO Jim Hackett said, “We are now entering the final phase of Smart Redesign [the company’s agenda since Hackett took over as CEO two years ago].… Most of the organization will [now] be structured with nine layers or less [compared to] 14 organizational layers [previously].”
It’s also about reducing overhead costs: “Cost reduction is a key aspect of Smart Redesign. Overall, by the end of the process later in August, we will have eliminated about 7,000 salaried positions or about 10% of our global salaried workforce. This includes both voluntary and involuntary separations over the past year. Within that total, and consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20%. This will result in annual savings of about $600 million.”
In the last year, Ford’s competitors have done similar downsizing to become leaner and more nimble. GM has cut about 8,000 salaried positions in North America and has closed several factories, while VW announced in March that it would be cutting 7,000 salaried positions. Worldwide, carmakers are axing an estimated 30,000 white-collar positions to get ready for the new wave of technology driving the industry.
For additional perspective, remember that auto sales in China are shrinking and that U.S. buyers, being put off by higher prices, are increasingly looking at the used-car market. Kelly Blue Book notes that new small SUVs average $26,000, while midsize SUVs roll out at $33,000. Pickup trucks average $41,000, while luxury SUVs average $51,000. The most effective strategy to maintain and improve profitability in such a market is to cut costs.
Ford earned $1.1 billion in the first quarter of 2019, beating analysts’ expectations. Investors, on the other hand, see what’s coming: They have driven the price of Ford’s stock from $7.90 a share at the first of the year to over $10 currently. That’s a gain of 30 percent, with the full impact of Hackett’s Smart Redesign strategy still to kick in.

More at: https://www.thenewamerican.com/econo...sn-t-warranted

[loveshiscountry]

Dude, How many jobs have you had in the past 25 years (beside your RPF gig)? One at the grocery, right?

I don't even bother reading this stuff unless I really dig in. I have seen so many places "layoff" simply because they are replacing high paid workers with new, entry level hires.

It's a typical tool middle management uses when they are told to shape up. Easiest thing is to fire people. Replace them in 3 months.

BFD.

Companies don't like to do that for the most part because of the associated high cost of training. It has to be a significant amount of money saved before they do so. And like you mentioned, it's at the entry level position.

[DamianTV]

Solution: Build $#@! in the USA! No Tariffs no problem!

[juleswin]

Solution: Build $#@! in the USA! No Tariffs no problem!

How about the tariff on raw materials? Are they now supposed to.mine their own raw material?

[DamianTV]

How about the tariff on raw materials? Are they now supposed to.mine their own raw material?

Could mine stuff here too. Its more jobs!