Published: Thu, May 18, 2017
Markets | By Noel Gibbs

Ford to Cut 1400 Jobs in Profitability Push

Additionally, Ford shares have dropped 40 percent since Mark Fields ascended to the CEO position in 2014. But the initial response by investors is proving lackluster.

"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", Moran told CBC News in a statement.

The automaker will offer voluntary early retirement and special separation packages to roughly 1,400 white-collar workers in the two regions combined and expects the cuts to come by the end of September.

Some early reports had suggested Ford might cut as much as 10 percent of its salaried employees.

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The Ford logo on a auto is seen at a dealership on January 29, 2013 in Glendale, California.

Ford expects the workforce reductions to be completed by October, noting that it must reduce costs and become as lean and efficient as possible.

Ford's profit in the first quarter of 2017 fell from $2.4 billion to $1.6 billion, with profit in its North American unit declining by more than $1 billion.

The cuts are part of a previously announced plan to cut costs by $3 billion in 2017, a move that Ford hopes will improve profitability in 2018 as US new auto sales level off after years of consecutive growth.

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Ford has 200.000 employees world-wide and steadily increased its workforce since the financial crisis as the USA market rebounded and a plan to expand in China was launched. Earlier this year, it announced it would add 700 workers to a suburban Detroit plant in 2018 to make electric and self-driving vehicles.

Ford isn't the only automaker looking to get leaner as USA demand for new vehicles slows down. But that move set off a political firestorm during the presidential campaign a year ago, then-candidate Donald Trump launching a Twitter attack on Ford and threatening retaliatory measures, including a border tax.

Trump, in January, tried to take credit when Ford announced it was canceling a second Mexican plant. The automaker even committed to ditching plans to build a factory in Mexico that had been under construction after the president criticized it, and instead announced it would add 700 jobs in MI. The good news - for now - is that it won't impact hourly employees.

Earlier this year, the niche electric vehicle company Tesla passed both Ford and GM in market value, despite having a small fraction of either company's sales. And industry analysts like Joe Phillippi, of AutoTrends Consulting, say that pattern could accelerate in the months ahead if sales don't rebound. Ford offered voluntary buyouts to hundreds of European salaried workers past year as it worked to get that region back to profitability.

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