Ford to Cut 10% of Salaried Workforce in Asia, North America--Update
Ford Motor Co. said Wednesday it aims to reduce its salaried workforce in North America and Asia by 10%, a cost-cutting move aimed at shoring up profits amid cooling sales in the once-booming U.S. and Chinese auto markets.
Ford will offer about 1,400 white-collar workers early retirement and separation packages as part of the job-cutting plan, with people expected to leave by September, the company said.
Similar actions have been completed or are under way in Ford's other global regions, including Europe and South America, and won't be included in this offer.
Ford Chief Executive Mark Fields is under pressure from shareholders and board directors to improve profits, particularly in North America, and reverse a nearly three-year slid in the company's stock price that has eroded more than 30% of shareholder value.
In a statement, Ford said 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.
Full details of the separation packages will be available to employees in early June.
The move is part of Ford's $3 billion cost-cutting target for 2017, a plan that is aimed at restoring profit growth in 2018 and helping offset growing investment in new technologies, such as electric vehicles and self-driving cars.
The Dearborn, Mich., auto maker has booked substantial profits in recent years, including two consecutive years of record earnings, but Ford's market capitalization earlier this year sunk below that of electric-car startup Tesla Inc.
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.
While still robust, Ford's profits margins in North America are starting to shrink amid a broader slowdown in the U.S. auto market, following a seven-year growth streak.
The No. 2 U.S. auto maker is also facing weaker profits in Asia-Pacific, where softer sales and intensifying price competition in China are dinging profits for the region.
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(END) Dow Jones Newswires
May 17, 2017 09:08 ET (13:08 GMT)