Ford To Cut 10% Of Its Workforce: Reports

DEARBORN, MI — The Ford Motor Company may cut as much as 10 percent of its workforce — up to 20,000 jobs — according to a Monday Wall Street Journal report. The Dearborn-based automaker has not made any official announcement, but media reports said management has been under increasing pressure from its board of directors and shareholders to do something to bolster sagging stock prices.

Ford shares have dropped some 40 percent since CEO Mark Fields took the reigns of the company on July 1, 2014, according to a Detroit News report. Ford shares were at $17.41 on Fields’ first day, and closed Monday at $10.94. That decline, and what appears to be softening sales, is the impetus for the belt-tightening.

“We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities," Ford said in a statement. "Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation.”

Ford's profits sank 35% during the first quarter of 2017 to $1.6 billion as higher costs for warranties, recalls and materials eroded profits, the Detroit Free Press reported.

Ford could outline the job cuts as early as this week, according to the Wall Street Journal. The cuts are said to largely target salaried employees. It’s unclear if hourly factory workers are included, the Journal reported. Ford Motor Company has roughly 201,000 workers worldwide.

Michelle Krebs, an analyst with AutoTrader, said Ford may be taking a prudent action to prepare for declining U.S. industry sales. "Belt tightening comes as no surprise with sales softening and profits squeezed," Krebs told the Detroit Free Press. "Ford has been under particular pressure to take action to boost its stock price. The board meeting last week likely added pressure to get specific about cost cuts."

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