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The Profit is Falling! US Ford Wants to Lay off Employees, 70,000 Employees Shiver

Source:Iris Liang Time:2018-10-8 11:07:24

As part of Ford's $11 billion restructuring, layoffs have been put on the agenda, and 70,000 Ford employees are shivering.

On September 27th, local time, the 115-year-old Ford held the 100th anniversary of the Ford River Rouge Complex in Dearborn, Michigan. The Ford Rouge River Factory is a Ford Motor Company. Construction began in 1917 and was completed in 1928. It is the largest integrated plant in the world. At the ceremony, Ford Chairman William C. Ford Jr. presented an optimistic outlook for the company's prospects for the next few years. SEKO Machinery also devotes to becoming a enterprise with long history. Our full air type power-propelled weld bead rolling machine uses air cooling system, without water cooling towel, saving space and costs.
Ford brews large-scale layoffs worldwide

According to media reports such as The Wall Street Journal, Ford, the second-largest automaker in the US, informed employees about a large-scale layoff plan this week, which is part of Ford CEO Hackett’s $11 billion restructuring plan.

Ford said in a statement on Friday, local time, that the company is in the early stages of restructuring the global workforce. However, Ford declined to disclose the number of people who might be laid off. Currently, Ford has approximately 200,000 employees worldwide, and this program may have an impact on 70,000 paid employees who were informed of the plan on Thursday.

At present, Ford's share price is at a low point in more than five years, and the company's profits are also falling. Ford's share price closed at $9.12 on Friday, and has fallen 27% year-to-date. The New York Times reported that in August this year, Ford's credit rating was downgraded to the upper level of junk, and its share price fell to its lowest point since the 2009 financial crisis.

Since Hackett became CEO of Ford in May 2017, he has been emphasizing improving Ford's operations by cutting costs and simplifying car design and manufacturing. Ford's goal is to cut costs by $25.5 billion by 2022.

In addition, Ford also said it plans to pay $11 billion in restructuring costs over the next three to five years. Analysts expect that most of these layoffs will come from Ford's operations outside the US – in recent years, Ford's development in overseas markets has been difficult, especially in Europe and South America.
Ford has said that the restructuring will target areas where the company's business does not generate any significant returns in order to put more money into the most profitable business areas, especially trucks and SUVs in North America. The Wall Street Journal reported that Ford has been losing money in Europe and South America, and has suffered losses in China in the second quarter of this year.

Ford is currently negotiating with the public to establish an alliance, which may help reverse Ford's predicament in Europe and South America. In addition, Ford is still discussing how to expand cooperation with Indian carmaker Mahindra, which is another market that Ford is struggling with.

Centennial car companies are struggling now

Last week, Hackett said on Bloomberg TV that Trump's tariff on imported aluminum and steel would increase Ford's cost by $1 billion, highlighting the urgency of Ford's massive restructuring.

The New York Times reported that these tariffs would erode the profit margin of the Ford F-150 pickup truck (with aluminum body panels). However, Ford said that the company has already taken into account the tariffs and does not need to change the plan further. At the same time, the US government's recent trade agreement with Canada is undoubtedly a good news for Ford - Ford produces trucks and SUVs in Ontario, Canada.

A Ford spokesperson said that the company informed employees about these plans in advance because restructuring is not only a tangible process, but also a participatory process. “It’s important for employees to maintain transparency,” the spokeswoman said. “This is a completely new process that we have never experienced (such a large-scale restructuring).”

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Iris Liang
SEKO Machinery & Technology Co., Ltd
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