May 16 (UPI) — The Ford Motor Co., with its stock price falling and U.S. sales stalled, plans a 10 percent cut in its global salaried workforce, people briefed on the plan said.
The job reductions, of up to 20,000 positions, could be made public later this week, The Wall Street Journal reported on Tuesday. The plan to improve profitability by $3 billion comes as Ford’s flagship F-series pickup trucks are selling well, but overall sales have slowed in the United States and China, Ford’s two largest markets. Costs have risen in non-core initiatives including research into electric and self-driving vehicles.
The company projects a $9 billion pre-tax profit in 2017, compared to $10.4 billion in 2016. In the past three years, under the leadership of CEO Mark Fields, the value of Ford stock has fallen by 40 percent as sales volumes have grown, and the company’s market value has fallen behind market values of Tesla Inc. and the General Motors Corp.
About half of Ford’s 200,000 employees work in North America. It is unclear if the prospective job cuts will include hourly workers, and the job reduction plan could be complicated by pressure from President Donald Trump to increase hiring in U.S. manufacturing sector.
As Ford has hired more people in the past three years, largely in new technology projects General Motors has reduced its U.S. workforce in response to lowered demand for cars, and has withdrawn from underperforming markets. Ford’s employment has increased 25 percent in the past five years.
Ford’s plan calls for $3 billion in cost reductions in 2017.
