Ford To Cut Global Workforce By 10% Following Share Price Slump Photo:

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Kez Casey | May, 17 2017 | 0 Comments

In an effort to trim operating costs, Ford is poised to start a workforce cutback around the world as part of a targeted US$3 billion (A$4.04 billion) cost reduction.

Reuters and the Wall Street Journal both report that salaried workers are in the US automakers sights, a move likely to rattle US President Donald Trump, who has signalled employment in the automotive sector as a top priority.

Estimates put Ford’s global headcount at around 200,000 employees, half of which are located in the US alone, but only 30,000 of those are classed as ‘salaried’ workers with the remainder employed on a casual basis.

The staffing cutbacks are believed to begin as early as this week. While at this stage Ford is yet to make any official announcement concerning staffing, it has released a statement saying, “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. 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 first quarter reporting saw profits fall by US$900 million (A$1.21 billion) compared to the previous year, though a US$1.6 billion (A$2.15 billion) profit statement was reported for the period. Overall revenues were up up four percent, but recall costs and investment in new technologies and mobility solutions chipped into profits.

Share prices at the beginning of the week closed at US$10.94, barely above Ford’s 52 week low of $US10.90 per share, and well below its 52 week peak of US$14.04.

Any changes to Ford’s operations would be made to maintain the company’s relatively robust financial position. Forecasts for 2017 predict that Ford will finish the year in a similar position to last year, when the automaker reported its second-best pre-tax profits in the company’s history.

The potential impact to Ford Australia’s remaining workforce is unknown, with Ford having already rationalised its workforce following the closure of Australian production late last year, leaving design and engineering staff at its Broadmeadows and Lara facilities, both of which have been subject to additional investment for 2017.

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