Reports of large-scale Ford job cuts meet indifference on Wall St

Posted May 18, 2017

The Ford Motor Company is planning to cut its global workforce by about 10%.

A Ford spokesperson said in an email the company "has not announced any new people efficiency actions, nor do we comment on speculation".

Ford's profits dropped by 35 percent in the first quarter of 2017 as a result of rising costs, pricey recalls and a drop in fleet sales.

The automaker may face potential fallout from Republican US President Donald Trump, who has made boosting auto employment a top priority. The company has not commented on its alleged plans to slash its global workforce, which in the U.S. alone includes 30,000 salaried employees, according to Reuters.

Ford announced plans last month to trim costs by $3 billion a year to free up money to develop the next generation of electric and self-driving cars and trucks.

In March, Ford announced that it would invest $1.2 billion in a MI auto plant instead of building a $1.6 billion vehicle factory in Mexico.

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Ford did not confirm the report.

Ford prepares to highlight the voluntary nature of the personnel decreases. That report said the cuts would amount to 10% of all company employees, which would have been a much deeper reduction. The automaker is under intensifying pressure from shareholders to improve its profits and boost its lagging stock price.

The job cuts are expected to be outlined as early as this week and mostly target salaried employees, the newspaper said, citing unidentified people briefed on the plan.

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. Ford's share price has fallen almost 40 percent over the past three years.

Nonetheless, the automaker, in business since 1903, recently added 700 jobs in MI, according to Motor Trend, and in March announced a $1.2 billion investment in three of its facilities in the state, as well as 130 new jobs.

Unlike job cuts in the past, this time Ford's moving to slash costs while the company is solidly profitable. That's despite Ford making significant investments into artificial intelligence companies to speed up its self-driving vehicle programs.