Ford Motor Co. outlined new steps in its global cost-cutting efforts, saying it will reduce salaried workforce in key regions by 10% amid "an accelerated attack on costs."
The push, expected to result in 1,400 job cuts in North America and Asia by September, comes as Chief Executive Mark Fields strives to provide more clarity to investors about the auto maker's strategy. Ford's share price has slumped during Mr. Fields's three-year tenure at the helm, and profit growth has ground to a halt as U.S. sales volumes plateau.
The reductions would contribute to a $3 billion cost-reduction goal for 2017. Ford also said Wednesday that head-count cuts are under way or completed in Europe and South America.
Mr. Fields was recently granted a $2.5 million stock incentive by the board, which included the task of "developing a lean mind-set" at the company.
Ford, which has 200.000 employees world-wide, steadily increased its workforce as the U.S. market rebounded from the financial crisis and as a plan to expand in China unfolded. The Dearborn, Mich., auto maker has profited as demand for lucrative pickups and sport utilities surged amid lower gasoline prices.
The company's share price recently has been hovering at $11, however, more than one-third lower than its level when Mr. Fields succeeded Alan Mulally in the summer of 2014. Ford's stock touched as low as $10.75 on Wednesday, the lowest point since August 2015. Shares traded 1.1% lower at $10.82 in Wednesday afternoon trading.
Ford will offer employee buyouts in the U.S., China and other affected countries. Staff in several of the company's departments -- including factory personnel, analytics, information technology and product development -- aren't eligible for buyouts.
The Wall Street Journal on Monday was first to report Ford's plans to trim its salaried workforce, targeting a 10% reduction in head count.
Ford said Wednesday that it remains focused on "becoming as lean and efficient as possible" but didn't provide specifics on anticipated cost savings. Those figures will be outlined later this year, along with related personnel costs, which will be booked as special items in the third quarter, a company spokesman said.
Ford, which employs 55,000 hourly employees, hasn't indicated any plans to cut that segment of its workforce.
Ford's $3 billion cost-cutting target is aimed at restoring profit growth in 2018 and helping offset increased spending to develop new technologies, such as electric vehicles and self-driving cars. The auto maker's market capitalization earlier this year sunk below that of electric-car startup Tesla Inc. amid slower earnings growth.
Mr. Fields has pledged to take more decisive action, telling Wall Street analysts last week that the company will improve communications to demonstrate resilience in its core automotive business.
Ford, like many of its rivals, faces mounting concern about its ability to weather a potential downturn in the global auto market. Mr. Fields has worked to convince investors that a series of investments and experiments are girding his company to battle a wave of tech companies -- including Tesla, Apple Inc. and Alphabet Inc. -- that threaten to unseat Detroit as an auto industry powerhouse.
Alphabet's Waymo unit, for instance, has been testing autonomous-vehicle technology for several years, garnering attention that other companies, including conventional car companies, have scrambled to tap. Tesla, while much smaller than Ford, has a sizable lead in electric vehicles and has routinely been quicker to launch new technology advances, such as comprehensive over-the-air updates for vehicle systems and semiautonomous driving features.
Ford is putting $4.5 billion into electric-vehicle research, but has been vague about a long-range electric vehicle that it plans to launch in coming years. The auto maker recently committed to invest $1 billion in a startup specializing in artificial intelligence.
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(END) Dow Jones Newswires
May 18, 2017 02:47 ET (06:47 GMT)