DEARBORN, Mich. – Ford Motor Company is looking to cut its North American workforce by 10% with more than 1,000 jobs on the chopping block.
Most of the reductions would take place in the area of Dearborn. However, information technology workers and those responsible for rolling out new vehicles will not be affected.
Ford has been working for several years to become more profitable and now the company sees it needs to make cuts to its most profitable corner to keep it profitable.
The company intends to reduce salaried or white collar headcount by 1,400, using those retirement eligible by the end of this year.
They’ll do so through what they’re calling a voluntary incentive program. The program begins Sept. 8 and those eligible must accept by Oct. 23 and would have to leave the company by the end of the year. If too few take the retirement packages, involuntary separations will commence.
IHS Markit auto analyst Stephanie Brinley said it’s important to remember this isn’t related to COVID-19.
“These layoffs and this restructuring are not in response to the current economic conditions,” Brinley said. “It was planned ahead. It’s just that the current economic conditions make it more critical.”
One of the things all auto companies face these days is the difficulty of moving forward with autonomous and electric vehicles while designing and building top quality and interesting current new vehicles customers don’t just want, but have to have.
“It is a soft handed approach,” Brinley said. “It’s a little bit dangerous in that you might end up losing somebody you’d really prefer to keep, but in order to kind of do it fairly and share the opportunity to take the retirement and all if that you kind of have to work through it.”
So the company is reprioritizing to spend more on those vehicles it’s losing money on -- autonomous and electric -- and yet still have to keep the cash coming in to finance all of that.