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In the wake of GM Restructure, Ford could cut workforce by 1/3rd in the coming months

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In the wake of GM Restructure, Ford could cut workforce by 1/3rd in the coming months

Old 12-05-18, 08:33 PM
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Default In the wake of GM Restructure, Ford could cut workforce by 1/3rd in the coming months

https://www.bizjournals.com/louisvil...workforce.html

Ford Motor Co. CEO Jim Hackett rebuffed a report that the company could lay off as many as 25,000 workers globally as part of a restructuring plan. Hackett spoke to reporters about the layoff estimate Tuesday night at the company's annual holiday reception in Redford, Mich. On Monday, Morgan Stanley analysts said in a note that Ford is "next in line" for layoffs after General Motors Co. announced massive layoffs last week. Hackett said he didn't know where the analysts got those numbers.

"They certainly haven't come from us," he said. "Everywhere I've been in business, a plan to change employment is something you first get really thoughtfully written down, explain to everybody inside and then you go public with it. We've been doing that."

Top Ford officials have been working on an estimated $11 billion restructuringplan to make the company more fit, but it hasn't provided any layoff estimates or many details. Some have speculated that Ford could be under pressure to put out details of its plan now that GM has made a layoff announcement. Hackett said that isn't the case. The company did announce plans to move workers between facilities, including 500 workers in Louisville. Hackett added that there could be news later this week about personnel changes "at the top of the company." He wouldn't elaborate but said the news was "nothing earth shattering."

"Ford needed to have a modern culture that made teams more prominent … flatter, faster decision making, less hierarchy," he said.

Hackett was also asked whether Ford has excess capacity it could use to manufacture Volkswagen vehicles. That question came after the news that Volkswagen Group is in talks with Ford about that. Hackett wouldn't give many details there either.

"These kind of discussions have a discipline to them and a coordination. I want to honor that," he said.

He said Ford produces more vehicles in the U.S. and for the U.S. than any other manufacturer.

"I'm really proud of where we are in our utilization right now," he said.

Ford has two assembly plants in Louisville, making it one of the area's largest employers. Between the two plants, it has about 12,600 workers.
https://www.motor1.com/news/282598/r...-ford-lay-off/

That would be more than GM's sizable downsizing effort.

Are dark times ahead for automakers? We’ve already heard about woes from Ford resulting in layoffs, but a new report fromBloomberg News suggests things could get worse, especially for Blue Oval staff overseas. Exactly how worse is pure speculation at this point, but predictions say 25,000 jobs could end up on the cutting room floor when all is said and done. Specifically, Bloomberg News points to Adam Jonas, an analyst with Morgan Stanley who issued the prediction. It’s thought that a good portion of the cuts will happen in Europe, but U.S. jobs would almost certainly be affected as well.

“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” said Jonas, according to Bloomberg News. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”

Additionally, the report cites a Ford spokesperson as saying the company’s salaried workforce was informed of unspecified job losses coming by the middle of 2019. Currently, Ford employs approximately 70,000 people on salary, so even if the job loss prediction is remotely close to 25,000, we’re talking about one-third of Ford’s salary staff. In its most recent sales report posted today, Ford total vehicle sales were down 6.9 percent in November compared to the same period last year. Ford's total sales for the entire year are down 2.9 percent.

This prediction comes on the heels of massive layoffs at General Motors, despite the company posting a healthy $2.5 billion profit for the third quarter of 2018. Following a round of buyouts, GM announced last week that it was cutting 15 percent of its workforce, including a 25 percent cut on executive positions. In October, Ford pointed to tariffs resulting from President Trump’s trade war as a catalyst for losing $1 billion in profit. The company is also exploring a possible partnership with Volkswagen, having signed a Memorandum of Understanding for co-developing commercial vehicles and possibly other initiatives back in October as well.

The quick rise of electric power and autonomous technology is certainly part of the drastically changing automotive landscape at the moment, and Ford has been playing catch-up in that realm for some time now. Political uncertainty could also play a part, but one thing seems certain: Detroit’s automakers are apparently preparing for some very tough times in the near future.
Seems like tough times ahead for US Automakers. Will FCA be next?
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Old 12-05-18, 08:41 PM
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No problem. All they have to do is stop building sedans, build more and more SUVs, and that will solve everything.
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Old 12-05-18, 08:50 PM
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Originally Posted by ArmyofOne View Post
Will FCA be next?
Part of that may depend on if FCA gets bought out or not. The late Sergio Marchionne spent a good part of his last couple of twilight years hunting for a buyer....even approaching GM and Mary Barra at one point. I think (?) he also wanted a merger with VW, if possible.
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Old 12-05-18, 09:37 PM
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Originally Posted by ArmyofOne View Post



Seems like tough times ahead for US Automakers. Will FCA be next?
Where there is smoke, there is usually fire.
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Old 12-05-18, 10:27 PM
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Its going to continue to happen. The current political/economic climate is very negative for domestic automakers.

I'm feeling more and more like we're on the end of a strong negative shift in the economy in general. I feel it coming in my industry as well.
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Old 12-05-18, 11:29 PM
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I knew it wouldn't take long to blame Trump funny that Toyota seems to have no issues building cars in the United States. What about when GM went bankrupt and Ford was teetering was that because of the "current political climate" as well? Or maybe GM and Ford just suck at business.
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Old 12-06-18, 07:25 AM
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Originally Posted by Lexus2000 View Post
I knew it wouldn't take long to blame Trump funny that Toyota seems to have no issues building cars in the United States..
You seem to not notice that Toyota is not burdened with over capacity and they are not weighed down by UAW union contracts. The Oshawa plant that is closing is clipping along at 115K units per year, one shift....the plant once made 1milllion plus cars. Ford has plant over capacity issues as well, and it is clear nobody wants American cars.
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Old 12-06-18, 07:42 AM
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Originally Posted by Lexus2000 View Post
I knew it wouldn't take long to blame Trump
It never does.

Or maybe GM and Ford just suck at business.
Seems like almost everyone else can sell sedans.

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Old 12-06-18, 07:46 AM
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Originally Posted by mmarshall View Post



Seems like almost everyone else can sell sedans.
Agreed. However, a lot of us have been saying that people are willing to pay more for Japanese brands cars than they would American. Not the case with suvs or trucks. The end of American sedans in the American market is both a shift of consumer tastes as well as a falling and failure of American brands in the segment.
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Old 12-06-18, 08:13 AM
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Originally Posted by LexsCTJill View Post


Agreed. However, a lot of us have been saying that people are willing to pay more for Japanese brands cars than they would American. Not the case with suvs or trucks. The end of American sedans in the American market is both a shift of consumer tastes as well as a falling and failure of American brands in the segment.

It goes beyond that, Jill. Other companies also care more about what their customers think. Even arrogant VW, long-known for their contempt of the U.S. market, still offers a wide lineup of sedans, convertibles, hatchbacks, and traditional (non-crossover) station wagons....in edition, of course, to the popular SUVs. Like some other companies, they make most of their biggest profits off of the big Atlas and Tiguan SUVs, but realize that they can't just depend on the high-profit items if they want to eventually stay in business. Today's rejection of regular cars could easily be tomorrow's demand.
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Old 12-06-18, 08:14 AM
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Originally Posted by ArmyofOne View Post
Will FCA be next?
Not likely. Though Chrysler (-20.7%) and Fiat (-24.5%) sales are both in dumpster-fire territory, Jeep (+11.8%), Ram (+43.5%), Dodge (+15.1%), and Alfa (+35.9%) are absolutely killing it.

Originally Posted by Lexus2000 View Post
I knew it wouldn't take long to blame Trump funny that Toyota seems to have no issues building cars in the United States.
That has been true up to this point, but might not last forever. See below.

Originally Posted by mmarshall View Post
Seems like almost everyone else can sell sedans.
Yeah, with Camry and Prius sales down by almost 30% in November, helping drive Toyota's car (as in non-truck/SUV) sales down by 17.3% for the month, they're really taking the shrinking market by storm.
  • Likewise, Honda's car sales were down 12.6% in November, driving the whole company negative by 9.5%
  • Nissan's car sales dropped by a full third (33%)
  • VW saw sales of the Golf, Beetle and Passat tank
  • Hyundai-Kia is actually up 0.5% overall, but I'd be willing to bet that their SUV lineup is responsible for that (they don't break out sales by segment), considering that the Genesis brand was down 76.5% for the month.
I don't know who "everyone else" is, but it doesn't seem like there's anybody who can sell sedans. Do feel free to point out somebody I missed.
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Old 12-06-18, 08:29 AM
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You're not wrong geko29, I have noticed that too. Much of Ram's success is due to the selling of the new Ram, but I have a feeling those sales will level off as the people who "have to have it cause its new" buy theirs.
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Old 12-06-18, 08:32 AM
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People still want sedans. They just don't want Buick's or large, floaty boring ones
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Old 12-06-18, 08:35 AM
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Originally Posted by geko29 View Post
I don't know who "everyone else" is, but it doesn't seem like there's anybody who can sell sedans. Do feel free to point out somebody I missed.
You didn't necessarily miss it, but the Camry and Accord sales, even wth dropping figures, still make up a substantial portion of Toyota and Honda American-market sales, as the ES350 does at Lexus. You mentioned Nissan sedan sales down 33%. Yes, substantial, but that means that the glass is still two-thirds full. And two-thirds is still a lot of vehicles. It's not like the market is going to dry up overnight.

Lexus2000, BTW, is correct....Trump is always the first person to get blamed for everything, whether it is, in fact, his fault or not. It's not his fault if SUVs are currently more popular than sedans.
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Old 12-06-18, 08:38 AM
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Originally Posted by Lexus2000 View Post
I knew it wouldn't take long to blame Trump funny that Toyota seems to have no issues building cars in the United States. What about when GM went bankrupt and Ford was teetering was that because of the "current political climate" as well? Or maybe GM and Ford just suck at business.
This is not at all entirely on Trump, but these tariffs absolutely had a role in pushing this over the edge. Thats not to say this wouldn't have happened eventually, but its happening now in large part to that. Talk to some economists who follow the automotive industry about it. He has enacted a lot of things that will prove hurtful to the economy as we go through the next couple years. Just wait and see,

And, its on Trump that he promised people he would not only save these jobs but bring automotive jobs back, and thats just not reality. These jobs are not coming back, and in fact we're going to lose a lot more of them, and a portion of that is going to be due to things he actually put in place. And yes, he's the nation's leader, and much of the nation's political climate and economic climate is connected to him. You can't praise him for good things that happen and discredit people who say its not him that is responsible for that, yet do the exact opposite when bad things happen. You're not even American, if American citizens and voters want to discuss our president we should be able to do so without being berated by citizens of other countries. Worry about your own leaders.

Toyota has no problem building cars here because their factories are not union, and they don't have the burdensome pension obligations to their current workers or past workers that US automakers do. There also is truth to the statement "maybe GM and Ford just suck at business", like I said, they made garbage products for DECADES.

And no, everybody else can not sell sedans. Sedan sales are dropping everywhere, you will absolutely see companies like Toyota and Honda consolidate their sedan models and offerings too going forward. You already see it, look at the GS, talk of no replacement IS, etc.

Last edited by SW17LS; 12-06-18 at 08:44 AM.
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