Over the next few days, thousands of Ford Motor Co. salaried workers will be let go, the bulk of them in Michigan, as the company trims costs and continues to reorganize and transform its business model.
In a memo sent to about 31,000 Ford employees in North America on Monday, Executive Chair Bill Ford and CEO Jim Farley explained that to "tackle all aspects of costs — from materials to those related to quality," Ford will reduce its salaried workforce by 2,000 and agency employees by 1,000 in the U.S., Canada and India.
The majority of the cuts will be in the U.S., Ford spokesman Mark Truby told the Free Press adding, "The majority of our employee base is in Michigan so therefore a significant percentage of the job cuts are in Michigan.”
Ford has been restructuring its operations over the past couple of years including dividing into divisions that focus on either electric vehicles, internal combustion vehicles and commercial sales. It is part of the Ford+ plan.
The jobs that have been eliminated are not in any specific part of the company, Truby said. Ford chose which jobs it would eliminate, “based on a holistic look at the needs of the business."
But Truby said the move is not related to fears of a recession and it does not affect Ford's June announcement that it would invest $2 billion in Michigan to create 3,200 union jobs, including nearly 2,000 jobs throughout three assembly plants to increase production of the all-electric F-150 Lightning pickup.
"So net-net we’re adding more jobs in Michigan," Truby said. "It’s a rebalancing because those jobs that we talked about adding were hourly employees. The jobs we’re talking about today are white-collar. On an absolute basis, we’re still adding employment in Michigan if you look at both commitments.”
'Difficult and emotional time'
In the memo, Ford and Farley explained that Ford looked at each team’s "shifting work statement connected to our Ford+ plan" and the automaker is eliminating work, reorganizing and simplifying functions across the company. Ford managers will provide employees with more specifics on all of that later this week, the memo said.
"None of this changes the fact that this is a difficult and emotional time," Ford and Farley wrote. "The people leaving the company this week are friends and coworkers and we want to thank them for all they have contributed to Ford."
Truby said Ford is working closely with the Michigan Economic Development Corporation to help those whose job is cut to find other work, noting that people are hiring now.
In fact there is a free career fair on Tuesday at the Novi Emagine Theater from 8:30 a.m. to noon for those that are being laid off from multiple companies in Detroit including Ford, Rivian and Rocket Mortgage. There will be seven companies at the event, including Brose, Harley Davidson and Lordstown Motor, that are hiring and those companies will be bringing their hiring teams, said Matthew Karrandja, who has organized the fair and is vice president of sales for engineering recruitment company LER TechForce.
The job cuts are also, "not a reaction to fears of a recession or concerns about the economy," Truby said. "This is really just about positioning the company for success, to deliver on our plan and get our costs down."
Cutting costs and reorganizing
Ford has been working on its Ford+ Plan for a few years now. In March, the automaker announced a radical plan to divide the company into divisions: Ford Pro to focus on its commercial business, Ford Blue, which will focus on the traditional internal combustion engine, and Ford Model e, which will develop the battery EVs and connectivity.
The idea is to help the 119-year-old automaker be more competitive against Tesla, the biggest electric vehicle competitor in the industry, as well as crosstown rival General Motors, which plans to offer a zero-emissions lineup by 2035.
Truby said Ford is investing $50 billion in the development of electric and connected vehicles over the next several years. But he did not know the exact savings Ford will achieve with these recent job cuts.
“What we’ve said in the past is we want to reduce our overall structural costs by $3 billion over time, over the next few years," Truby said. "That’s not just head count, that’s overall costs.”