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Ford is Cutting 1,400 Salaried Jobs

Sept. 1, 2020
Downsizing is likely to be implemented via buyouts, in a new phase of the global restructuring to reduce inefficiencies and increase profit margins that resulted in 7,000 positions eliminated last year.

Ford Motor Co. is due to announce it will eliminate about 1,400 salaried jobs in North America, in the latest phase of an $11-billion global restructuring in progress since 2018. The automaker has indicated it will offer voluntary buyouts to retirement-ready employees. (An earlier report put the number of job cuts at around 1,000.)

“We’re in a multiyear process of making Ford more fit and effective around the world,” according to an email to workers sent by Kumar Galhotra, president of Ford, Americas. “We have reprioritized certain products and services and are adjusting our staffing to better align with our new work statement.”

The job cuts are unrelated to the Covid-19 pandemic, which has spurred other global manufacturers to implement downsizing programs: Ford's current cost-saving efforts are aimed at improving organizational efficiencies and increasing marginal profit performance.

Ford is profitable in North America and the first phase of the restructuring, in 2019, was concentrated on the European operations, including plant closures and thousands of job cuts there. Overall Ford reduced its salaried worker total by 7,000 positions worldwide in 2019, job cuts that were expected to save $600 million annually. That left the group with a total employment of 190,000 at the start of 2020.

It's expected that Ford's 2020 results will include its first full-year operating loss in a decade. For 2019, Ford's adjusted free-cash flow of $2.8 billion was even with 2018, while revenue of $155.9 billion was down -3% year over year.

While Ford's salaried job cuts are unrelated to the Covid-19 pandemic, the group announced it has concluded its joint production of ventilators with General Electric Co. and returning the Ypsilanti, Mich., plant to full-time production of transmission oil pumps, electric battery packs, and fuel pumps. Some of that production had resumed in May.

The partners produced 50,000 ventilators or the U.S. government and shipped the final units to the U.S. government on August 28.

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