Over the next few days, thousands of Ford Motor Co. employees will be laid off, most of them in Michigan, as the company cuts costs and continues to reorganize and transform its business model.
In a memo sent Monday to some 31,000 Ford employees in North America, Ford Chairman Bill Ford and CEO Jim Farley said Ford would cut its salaried workforce by 2,000 to “address all aspects of cost — from materials to… those related to quality”. and agency employees by 1,000 in the US, Canada and India.
The bulk of the cuts will take place in the US, Ford spokesman Mark Truby told the Free Press, adding, “The majority of our employee base is in Michigan, so a significant percentage of the job cuts will take place in Michigan.”
Ford has reorganized its operations in recent years, including splitting into divisions focused on either electric vehicles, internal combustion engine vehicles, and commercial sales. It’s part of the Ford+ plan.
The jobs that were cut are not in any specific part of the company, Truby said. Ford selected which positions it would eliminate “based on a holistic view of the company’s needs.”
But Truby said the move had nothing to do with recession fears and had no repercussions June announcement from Ford that it would invest $2 billion in Michigan to create 3,200 unionized jobs, including nearly 2,000 jobs at three assembly plants, to ramp up production of the all-electric F-150 Lightning pickup truck.
“So Net-Net is creating more jobs in Michigan,” Truby said. “It’s a realignment because the jobs we talked about were hourly employees. The jobs we’re talking about today are white-collar workers. On an absolute basis, if you look at both commitments, we’re still creating jobs in Michigan.”
“Difficult and emotional time”
In the memo, Ford and Farley explained that Ford had looked at each team’s “shift work statement in conjunction with our Ford+ plan” and that the automaker was eliminating labor, reorganizing and simplifying functions across the company. Ford executives will provide employees with more details on all of this later this week, the memo said.
“None of this changes the fact that this is a difficult and emotional time,” wrote Ford and Farley. “The people leaving the company this week are friends and colleagues and we want to thank them for all they have contributed to Ford.”
Truby said Ford is working closely with the Michigan Economic Development Corporation to help those whose jobs are being cut to find other work, noting that people are hiring now.
In fact, there’s a free careers fair Tuesday at the Novi Emagine Theater from 8:30 a.m. to 12:00 p.m. for those being laid off from several Detroit companies, including Ford, Rivian and Rocket Mortgage. There will be seven companies present at the event, including Brose, Harley Davidson and Lordstown Motor, who are hiring, and these companies will bring their hiring teams, said Matthew Karrandja, who organized the show and is vice president of sales for the engineering recruitment firm LED TechForce.
The job cuts are also “not a reaction to recession fears or economic concerns,” said Truby. “This is really just about positioning the company for success, delivering on our plan and reducing our costs.”
Reduce costs and reorganize
Ford has been working on its Ford+ plan for a number of years. The automaker announced this in March a radical partition plan the company divided into divisions: Ford Pro to focus on its commercial business, Ford Blue, which will focus on the traditional internal combustion engine, and Ford Model e, which will develop battery-powered electric vehicles and connectivity.
The idea is to help the 119-year-old automaker be more competitive with Tesla, the industry’s biggest electric vehicle competitor, as well as crosstown rival General Motors, which plans to offer a zero-emission lineup by 2035.
According to Truby, Ford will invest $50 billion in the development of electric and connected vehicles over the next few years. But he didn’t know exactly what savings Ford will see with this latest job cut.
“What we’ve said in the past is that we want to reduce our overall structural costs by $3 billion over time,” Truby said. “It’s not just the number of employees, it’s the total cost.”