Arthur J. Villasanta – Fourth Estate Contributor
Dearborn, MI, United States (4E) – Just in time for the holidays and in the midst of a booming economy, Ford Motor Company will announce massive job cuts as a result of falling demand triggered by Trump’s trade war.
Ford said it will “redesign” its employee numbers by firing an undisclosed number of employees from among its 70,000 strong white-collar workforce. This number will definitely cause the firing of thousands of employees, say analysts.
Investment bank and financial services firm Morgan Stanley had even more terrifying numbers. It estimates up to 24,000 Ford employees might lose their jobs.
A recent Morgan Stanley report estimates “a global headcount reduction of approximately 12 percent,” or 24,000 of Ford’s 202,000 workers worldwide.” If implemented, this will be the largest mass firing in the history of the American auto industry, said Morgan Stanley.
Ford might not suffer that much angst from firing a historic and unprecedented number of employees. Current Ford CEO Jim Hackett fired over 12,000 employees when he was boss of office furniture maker Steelcase.
Ford says this redesign (another euphemism for being fired) will create an organization that’s leaner, with fewer layers, and offer more decision-making power to employees. The announcement follows news that Trump’s trade war with China has already cost Ford over $1 billion in revenues since July when the war started.
“A lot of the (reorganization) is about making different choices about strategy,” said Chief Financial Officer Bob Shanks. He said Ford’s goal isn’t only to slash spending but to improve the “fitness” of the company.
Ford has already warned that Donald Trump his auto tariffs have cost the company over $1 billion. Shanks said the company has also told Trump that his trade policies threaten to wreak havoc on Ford’s ongoing reorganization.
The ongoing $25.5 billion reorganization plan includes slashing $6 billion in improved capital efficiencies. Hackett was already expectd to announce the mass firings but has held off, according to some analysts.
Analysts say Ford needs to reorganize because it’s not doing that well in the markerplace.Ford has fallen behind the competition. It’s sold a depressing 32.8 vehicles per employee compared to GM’s 52.7 vehicles per employee.
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