08-22-2022, 06:43 PM
Quote:On Monday, Ford Motor Co. sent a companywide email announcing that 2,000 salary and 1,000 agency positions would be cut, reported Automotive News.
The letter, written by CEO Jim Farley and Executive Chair Bill Ford, stated that employees working in the U.S., Canada, and India will find out if their positions have been terminated this week.
The email read, "We are eliminating work, as well as reorganizing and simplifying functions throughout the business."
Previously, Bloomberg predicted that Ford would eliminate approximately 8,000 jobs, citing Farley's plan to cut $3 billion in costs by 2026.
In July, Ford locked down an agreement with a Chinese battery supplier, Contemporary Amperex Technology, for its EV lineup. The partnership would allow the automaker to produce 2 million EVs annually by 2026.
"Cost reduction will happen in our ICE business," Farley said regarding Ford's internal combustion engine division.
Earlier this year, Ford split its company into two divisions – Ford Blue, dedicated to internal combustion engines, and Ford Model e, devoted to the electric vehicles fleet.
Ford continues to restructure by removing resources from its Ford Blue division and reallocating them toward its growing EV unit.
Earlier this year, the company announced it would invest $50 billion into its Model e division to catch up to Tesla. To compete with Tesla's success, Ford said it would need to reduce distribution costs by $2,000 per vehicle.
Monday's joint email confirmed the shift in priorities. The letter read, "It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors."
Farley and executive chair Bill Ford have been direct with employees about the need for the company to cut costs. Raw materials, batteries, and shipping expenses have increased significantly. According to Reuters, Ford has been hit with $3 billion in additional costs due to inflation.
On Ford's second-quarter earnings call last month, Farley said, "In the past, often indiscriminately, we'd take the cost out. That's not what's happening at Ford now. This is a different kind of change, where we're reshaping the company."
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