Ford considers cost cuts, reducing workforce


An individual informed on the plan stated Ford prepares to provide generous early retirement incentives to decrease its employed headcount by October 1, but does not plan cuts to its hourly workforce or its production.

Ford said the cuts would amount to about 10 per cent of a group of 15,000 salaried workers. But it wasn't an outright denial either - "Reducing costs and becoming as lean and efficient as possible also remain part of that work", said the company.

Ford Motor Co. detailed plans of its job cuts Wednesday morning, a day after anonymous sources told the Wall Street Journal that the automaker planned a salaried workforce reduction. On July 1, 2014, when Fields assumed the Helm, Ford shares closed at $17.41; stock prices have declined roughly 40 percent since then. Electric auto maker Tesla Inc. recently surpassed Ford in market value even though it sells far fewer vehicles.

"Given the recent criticism on Ford's relative fundamental and share price performance the market will likely take it as a positive that Ford is reviewing its operations and looking to proactively improve efficiency at this stage of the cycle", Evercore ISI analyst Arndt Ellinghorst said Tuesday in a note to investors.

The automaker, in a statement, said it has not yet announced any job cuts but did not deny the essence of the report.

Ford's net income fell 35 percent to $1.6 billion in the first quarter.

Large-scale layoffs at an icon of American manufacturing could come with a degree of political risk for Ford, which recently earned praise from President Trump for its plants to expand its factories in MI. Ford has targeted approximately $3 billion in cuts in 2017, ahead of what many believe will be a flat period for USA auto sales.

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Ford has been hiring steadily in the US since the recession as vehicle sales roared back to reach record highs.

Last week, Ford's directors held a "strategy session" to review the company's priorities, and stockholders were critical of the company at its annual shareholders meeting.

Chief executive officer Mark Fields also wants to arrest the slide in the USA auto company's share price.

As Reuters further points out, Ford's strategic plans to reduce its workforce by 10 percent may not sit well with U.S. President Donald Trump, who wants to boost employment in the auto industry.

Ford stock opened today at $10.90 per share, a 52-week low.

In a statement, Ford would not confirm it is slashing jobs.