Southfield - Ford Motor plans to cut about 10 percent of staff worldwide
as Chief Executive Officer Mark Fields faces escalating pressure to boost
profit and a lagging stock price, the Wall Street Journal reported.
The job cuts are expected to be outlined as early as this
week and mostly target salaried employees, the newspaper said, citing
unidentified people briefed on the plan. It’s unclear if hourly factory workers
are included, the Journal said.
In Germany, where the carmaker’s European operations are
based, Ford has made voluntary buyout offers to a limited number of staff over
the past few months, according to IG Metall union official Witich Rossmann,
adding that he hasn’t been informed of a bigger job-cut program. Ford employs
about 24,000 people in Germany.
“The company’s performance has been lagging, even during
times when the US market was doing extremely
well,” said Sascha Gommel, a Frankfurt-based automotive analyst at Commerzbank.
“Ford like other carmakers is under pressure to stem increasing investments in
future technologies, so they need to make adjustments elsewhere,” he said,
adding that the US and South America could see the biggest hits.
Ford shareholders last week criticized company leaders
over what one investor called the “pathetic” performance of the automaker’s
shares and questioned how the board can continue to support Fields, who has been
CEO since July 2014.
The board convened ahead of last week’s annual meeting to
press him on his plans for improving the company’s fortunes, a person familiar
with the discussions said.
“We have not announced any new people efficiency actions,
nor do we comment on speculation,” Dearborn, Michigan-based Ford said in an
emailed statement. Officials at the carmaker’s European headquarters in
Cologne, Germany, declined on Tuesday to comment further.
Share Slump
Fields is facing sharp questioning of his strategy with
Ford’s shares having fallen about 36 percent since he replaced Alan Mulally,
who steered the company through the global financial crisis without a
government bailout.
Fields has been pouring billions into electric autos,
self-driving cars and ride-sharing experiments as Ford’s conventional vehicle
business has struggled more than crosstown rival General Motors Co. amid a
slowing US market.
Ford stock traded in Germany rose 0.6 percent to $11.01 as
of 12:33 p.m. in Frankfurt. Its US shares rose 0.2 percent to $10.94 at the New
York close on Monday, before the Journal’s story was published.
First-quarter adjusted earnings at Ford fell 42 percent,
while GM has said it remains on track for another record annual profit. Fields
has said Ford will cut costs by about $3 billion this year and that earnings
will rebound in 2018.
Read also: Kuga drivers flock for cooling system fix
Any retrenchment by Ford in the US would expose the carmaker
to the risk of more criticism from President Donald Trump. Fields and Executive
Chairman Bill Ford have curried favour with the US administration this year,
giving him advance notice of hiring and investment at American plants and cancelling
a small-car factory in Mexico.
Trump has pointed to carmakers’ plans and claimed they’re
restoring American manufacturing because of him. Ford employed about 201,000
workers as of the end of last year, including about 101,000 in North America,
according to a regulatory filing.
BLOOMBERG