Ford announces job cut
Earlier on May 20, Ford Motor Company’s (F) CEO, Jim Hackett, announced a plan to cut ~7,000 white-collar jobs. Among the 7,000 jobs, Ford’s layoff plans would hurt 2,300 jobs in the United States. The company plans to finish most of the job cut process this month with layoffs starting on May 21. As a result of the job cuts, Ford expects to save nearly $600 million per year.
Ford stock wobbles
Early on May 20, Ford stock was wobbling between the positive and negative territory after the company’s announced its big job cut plan. At 11:07 AM EST, Ford stock was off 0.5% for the day at $10.24.
Why cutting costs is important for automakers?
General Motors announced that it cut its salaried workforce 15% in November 2018.
For the last few years, US auto companies including Ford, General Motors, Toyota, and Fiat Chrysler, have been trying to reduce their costs by minimizing salary expenditure and implementing manufacturing efficiencies in their factories.
These cost-cutting measures are important for automakers. The slowing Chinese economy, escalating US-China trade war, and weakening US vehicle sales pose a big risk for these auto companies.
Trump might not like Ford’s plan
To learn more about General Motors’ plan to cut jobs and close some of its plants in North America, read Why Trump Could Slam GM for Its Latest Move to Shut Down Plants.
Job creation in the United States is one of the Trump Administration’s main priorities. President Trump has promised to create more jobs in the auto industry. So, President Trump will likely criticize Ford’s job cut announcement.