Ford 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. Fields has said Ford will cut costs by about $3 billion this year.
“The company’s performance has been lagging, even during times when the U.S. 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 U.S. 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’s 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.
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 amid a slowing U.S. market.
Ford stock traded in Germany rose 0.6 percent to $11.01 as of 12:33 p.m. in Frankfurt. Its U.S. 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. Ford has said earnings will rebound in 2018.
Any retrenchment by Ford in the U.S. would expose the carmaker to the risk of more criticism from President Donald Trump. Fields and Executive Chairman Bill Ford have curried favor with the U.S. administration this year, giving him advance notice of hiring and investment at American plants and canceling 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.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.