Published: Thu, May 18, 2017
National | By Traci Kelley

Ford cuts 1400 jobs, 10 pct of white-collar work force


Ford Motor Co is planning to shrink its workforce of salaried employees in both Asia and North America by as much as 10% in its attempt to boost its profits and its sliding price of stock, said sources familiar with its plans.

The company will offer voluntary early retirement and separation packages to around 10 percent of salaried workers in departments such as sales, marketing and human resources.

Shares in Ford Motor Company (NYSE:F) edged higher in pre-market trading on Tuesday as reports suggested that the U.S. carmaker is planning to cut 10% of its global workforce.

The report points out that unlike past job cuts, this round of cost cutting comes while Ford is solidly profitable - 2016 was the second most profitable year ever for the company. "Reducing costs and becoming as lean and efficient as possible also remain part of that work", the company wrote. The statement added that the company has not announced new people efficiency action nor does it comment on any speculation.

The staff cuts are part of a plan to lop $3 billion off the company's costs this year.

The relocation might put the USA automaker on a clash with President Donald Trump, who has made enhancing vehicle employment a top priority. Mr. Fields has pushed new technology investments like a $4.5 billion electric-vehicle program and an autonomous auto project, two things eating away at Ford's profit margins in the short-term despite lucrative pickup and SUV sales.

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Investors expressed concern that United States sales are peaking and Ford's market share is slipping.

Following initial reports of Ford's impending job cuts, investors hardly rallied. Trump heavily criticized the auto industry during his presidential campaign, noting that automakers are too reliant on Mexican plants to make vehicles for the USA market.

The vehicle maker also has around 25,000 employees in Asia, but there are no figures on how many of these are salaried.

"Look, we're as frustrated as you are by the stock price", Ford Executive Chairman Bill Ford said.

Back in January, following criticism and pressure from Trump, Ford pledged to scrap plans for a Mexican vehicle plant and added 700 jobs in MI instead. Buyout offers won't be extended to workers in product development, plant manufacturing, information technology, global data and analytics and the Ford Credit financial-services unit.

Ford's shares lost more than a third of their value since Mark Fields was named CEO in 2014.

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