The Ford Motor Co. is expected to slash 8,000 jobs in the coming weeks to help fund its push into the electric-vehicle market, Bloomberg News reported Wednesday.
Workers in the Ford Blue unit tasked with manufacturing internal combustion engine vehicles and employees working for the company’s other departments could lose their jobs under the to-be-finalized layoff plan, according to the report, which cited “people familiar with the plan.”
If finalized, the layoffs are expected to occur in stages, starting this summer, Bloomberg reported. It said most of the job cuts are expected to occur among the company’s 31,000-strong U.S. workforce.
According to Bloomberg, the layoffs would help fund the company’s electronic vehicle expansion by cutting costs and increasing profitability.
The company has announced several significant steps toward that end in recent months.
In March, Ford said it would split its electric vehicle and traditional car manufacturing divisions into two distinct businesses: Ford Model E for electric cars and Ford Blue for fossil-fuel-based automobiles.
The company said in its news release that it intended to raise its electric vehicle production rate to 2 million per year by 2026.
Ford seeks to use profits from its internal combustion engine offerings to fuel the company’s push into the electric vehicle business.
In a March interview with Bloomberg, Ford Chief Executive Officer Jim Farley said he wanted to make the company’s traditional automobile business “a profit and cash engine for the entire enterprise.”
“It needs to be a lot more profitable. We think we’re going to have to take about $3 billion out of our structural cost to make that business fully competitive,” Farley said.
The expected job cuts appear to be part of the plan to slash costs. Previously, Farly had hinted that part of the plan to boost profitability might involve laying off workers, according to Bloomberg.
“We have too many people,” Farley said in February at the Wolfe Research auto conference, the outlet reported. “This management team firmly believes that our [internal combustion engine] and [battery electric vehicle] portfolios are under-earning.”
The company also aims to cut costs by transitioning sales for its electric vehicles to a fully online model, similar to Tesla’s.
The move, however, alarmed dealerships — protected by state regulations that grant them a privileged position as an intermediary between the buyer manufacturer — who saw the shift to online sales as diminishing the role of dealerships.
Ford declined Bloomberg’s requests for comment on the anticipated job cuts.
That said, the company did share a statement with the outlet, saying it was working on restructuring the company to profit from the growth of electric vehicles.
“As part of this, we have laid out clear targets to lower our cost structure to ensure we are lean and fully competitive with the best in the industry,” Ford Chief Communications Officer Mark Truby told Bloomberg.
The federal government offers income tax credits of up to $7,500 per vehicle for buying Ford electric vehicles, the amount of credit varying by battery capacity.
However, some workers who helped fund the subsidy program through their hard-earned money via taxes will soon lose their jobs under the layoff plan.
Truth and Accuracy
We are committed to truth and accuracy in all of our journalism. Read our editorial standards.