Ford will offer voluntary early retirement to reduce payrolls

The offer will be open to about 15,300 workers, including 9,600 in the U.S., 1,000 in Mexico, 600 in Canada and 4,141 in Asia
Photo: REUTERS
17/05/2017
18:54
AP
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Ford is cutting 1,400 non-factory jobs in North America and Asia Pacific this year in an effort to boost profits and rescue its sagging stock price.

The company will offer voluntary early retirement and separation packages to around 10 percent of salaried workers in departments such as sales, marketing, and human resources. It expects the actions to be complete by the end of September.

Ford believes it will meet its targets by voluntary means, spokesman Mike Moran said Wednesday.

"We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities," Ford said in an email sent to employees early Wednesday. "Reducing costs and becoming as lean and efficient as possible also remain part of that work."
Certain areas of the business won't be targeted, including Ford's product development and credit divisions. Factory workers and white-collar employees in Ford's plants won't be affected. Information technology workers also aren't targeted.

Ford has been hiring steadily since the recession as U.S. vehicle sales roared back to reach record highs. Ford hired more than 15,000 factory workers between 2011 and 2015.

But investors are clearly worried that after seven straight years of growth, U.S. sales are peaking and Ford's share of that critical market has been falling. Ford's sales in Asia have been growing - they were up 9 percent last year - but that market is volatile and far less profitable than Ford's North American business. Ford's stock price has fallen nearly 40 percent in the three years since Mark Fields became CEO.

Ford shares fell 1.2 percent to $10.81 in morning trading after the company announced the reductions.

Ford's net income fell 35 percent to $1.6 billion in the first quarter. It expects to earn a pretax profit of $9 billion this year, down from $10.4 billion in 2016.

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