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Ford begins final round of US layoffs

Ian Thibodeau, The Detroit News on

Published in News & Features

DETROIT -- The first of 500 U.S. Ford Motor Co. salaried employees are expected to be notified in meetings Tuesday that they're being let go.

Ford's operations in Dearborn were quiet Tuesday morning ahead of the last round of white-collar job cuts, with parking lots filling and employees filing in as usual.

CEO Jim Hackett notified employees in an email Monday that Ford was nearing the end of its months-long bout of white-collar layoffs that would eliminate 7,000 jobs globally, roughly 10% of the automaker's global salaried workforce. When the U.S. layoffs wrap by June, Ford would have cut around 800 jobs in addition to 1,500 buyouts that occurred late last year, or around 7% of its U.S. salaried workforce.

The layoffs come months after General Motors Co. cut 15% of its global salaried workforce. Both sets of layoffs are largely a result of a slowing auto market and looming economic recession. Ford's layoffs are part of a $25.5 billion pool of cost cuts expected to roll out over the next few years.

Hackett said in a Monday note to employees that the salaried cuts were entering a final phase this week, putting an end in sight for employees who've spent months worrying whether their job was at risk. The automaker expects to wrap the 500 cuts by the end of this week. About 100 more in information technology and human resources will take place by the end of June.

"The amazing strength of the U.S. economy is giving carmakers a lot of breathing room that they normally wouldn't have to make adjustments before the next recession comes," said Patrick Anderson, CEO of the East Lansing-based Anderson Economic Group. "The old days are gone. Nobody's going to go into bankruptcy this time and survive."

A strong economy could offer a softer landing for Ford employees affected by the layoffs.

David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, expects those let go from Ford this week won't be without jobs for long, should they want a new one. These layoffs are much different than those that took place a decade ago amid the Great Recession.

 

"They're not going to go on welfare," Cole said. "They're going to find a job fairly quickly. Other companies need the people that Ford is going to be letting go."

Ford layoffs aim to prune management levels, which would allow for quicker ascension through executive ranks and quicker decision-making. Anderson said Ford's job cuts aim to answer a tougher problem than GM's.

"Ford set a target for a gross number of management jobs to be reduced," Anderson said. "That is harder to achieve and keep a successful company than it will be for General Motors. ... It's going to be harder for Ford to maintain the quality they have with this significant headcount reduction."

(Nora Naughton of The Detroit News contributed.)

(c)2019 The Detroit News

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Distributed by Tribune Content Agency, LLC.

 

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