Ford Motor Co. will be cutting 7,000 jobs from their white-collar workforce worldwide which coms to about 10 percent. 2300 of them will be in the US leaving 4,700 salaried employees to be cut from areas in places like the UK, and in Germany (where layoffs began in March).
Ford also plans to close three plants in Russia, a factory in Europe and another one in Brazil.
All of this restructuring is to accomplish three things: flattening out the management bureaucracyworldwide, to cut costs and make future investments. One area of cost increases has been in the rise of tariffs which rose to $1 billion annually on some steel and aluminum that he company imports, even though it uses gets those materials from domestic sources in the US.
Ford hopes it will be able to invest $11 billion through restructuring to improve its profitability and to prepare for the future of electric vehicles and self-driving autos. Although this is tenable because most auto manufacturers face the uncertainty of the future of the electric run vehicles, as well as self-driving autos and companies like Uber and Lyft.
Michelle Krebs, who is a senior analyst with Cox Automotive, says that all auto makers are trying to figure out how they can get more money out of the profits they’re making now in order to free up money for their future business except they really don’t know when their future investments in new technology and auto designs will payoff.
Ford, along with most major automakers, also is faced with the pressure of how to deal with the future of auto manufacturing with people looking to switch to more electrically run autos as well as the phenomenon of people opting-out of owning a vehicle in place of using companies like Uber or Lift to transport them around and about and renting vehicles for travel more and more. It saves people on monthly auto loan or lease payments, on insurance premium payments as well as the costs of auto upkeep and paying for gas or electric.
There is also the competition for self-driving cars which Ford is playing catch-up on. Ford does have test models it is working on in the area of full electric vehicles and self-driving autos.
While Ford is restructuring, it’s partnering with Volkswagen to develop new products such as its recent announcement of investing $500 million to produce the Rivian, an electric truck which is scheduled to come out in 2020.