Over the next few days, thousands of salaried workers from Ford Motor Co. are being let go, most of them in Michigan, as the company cuts costs and continues to reorganize and transform its business model.
In a memo sent to about 31,000 Ford employees in North America on Monday, CEO Bill Ford and CEO Jim Farley explained that to “address all aspects of costs — from materials to those related to quality,” Ford will reduce its salaried workforce by 2,000 and agency staff by 1,000 in the US, Canada and India.
The majority of the cuts will be in the United States, Ford spokesman Mark Truby told the Free Press, adding, “The majority of our employees are in Michigan, so therefore a significant percentage of the job cuts are in Michigan.”[ads1];
Ford has been restructuring its operations over the past couple of years, including splitting into divisions that focus on either electric vehicles, internal combustion vehicles and commercial sales. It is part of the Ford+ plan.
The jobs that have been eliminated are not in any specific part of the company, Truby said. Ford chose which jobs it would eliminate, “based on a holistic view of the company’s needs.”
But Truby said the move is not related to fears of a recession and does not affect Ford’s announcement in June that it will invest $2 billion in Michigan to create 3,200 union jobs, including nearly 2,000 jobs through three assembly plants to increase production of all electric F-150 Lightning pickup.
“So online, we’re adding more jobs in Michigan,” Truby said. “It’s a rebalancing because the jobs we talked about adding were hourly. The jobs we’re talking about today are white-collar. On an absolute basis, we’re still adding employment in Michigan if you look at both commitments.”
“Difficult and emotional time”
In the memo, Ford and Farley explained that Ford was looking at each team’s “shifting statement of work related to our Ford+ plan,” and the automaker is eliminating work, 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,” Ford and Farley wrote. “The people leaving the company this week are friends and colleagues, and we want to thank them for everything they have contributed to Ford.”
Truby said Ford is working closely with the Michigan Economic Development Corporation to help those who have been given the job find other work, noting that people are hiring now.
In fact, there’s a free career fair on Tuesday at the Novi Emagine Theater from 8:30 a.m. to noon for those being laid off from several Detroit companies, including Ford, Rivian and Rocket Mortgage. There will be seven companies at the event, including Brose, Harley Davidson and Lordstown Motor, that are hiring, and those companies will bring their hiring teams, said Matthew Karrandja, who organized the fair and is vice president of sales for the engineering recruiting firm. LER TechForce.
The job cuts are also “not a reaction to fears of a recession or concerns about the economy,” Truby said. “This is really just about positioning the company for success, delivering on our plan and bringing costs down.”
Cut costs and reorganize
Ford has been working on its Ford+ Plan for a few years now. In March, the automaker announced a radical plan to split the company 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 EVs and connection.
The idea is to help the 119-year-old automaker become more competitive against Tesla, the biggest electric car competitor in the industry, as well as rival General Motors, which plans to offer a zero-emission series by 2035.
Truby said Ford is investing $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 achieve with these recent cuts.
“What we’ve said in the past is that we want to reduce our overall structural costs by $3 billion over time, over the next few years,” Truby said. “It’s not just the number of employees, it’s the total cost.”
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Contact Jamie L. LaReau: email@example.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our auto’s newsletter. Become a subscriber.