The job-cut figure emerged in a research note to investors on Monday from Morgan Stanley analyst Adam Jonas, who wrote, “We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion. But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”
Bloomberg reports that Ford CEO Jim Hackett said the automaker didn’t give any numbers to Jones and that the company would make an interim announcement about plans for its workforce later this week. Ford in October told its employees it would cut an unstated number of salaried employees globally, including some from its North American operations. The automaker is aiming to flatten its management structure globally to empower more leaders and help spread decision-making more broadly across the organization, but company officials insist that headcount reduction figures have not yet been developed.
“As we have said, we are undertaking restructuring activities that could result in potential EBIT charges of $11 billion, with cash-related effects of $7 billion, over the next five years,” Ford spokeswoman Karen Hampton said in a statement. “These actions will come largely outside North America. This includes the targeted and thoughtful approach we are taking to the redesign of our global salaried workforce.
“All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”
Hackett has said he plans to slash $25.2 billion in costs by 2022. The automaker is paring most of its slow-selling sedans from its U.S. lineup as it prepares to unveil new products like the Ranger midsize pickup, new versions of the Explorer and Escape, and a battery-electric utility vehicle set for 2020.
Like GM and other automakers, Ford is grappling with dual challenges: shifting consumer tastes away from cars to trucks and utility vehicles, and the ramifications of developing electric and autonomous vehicles. Ford is also in discussions with Volkswagen about a partnership that could see VW build cars in Ford plants that have excess, unused capacity, among other things.
Ford earned a net profit of $993 million in the third quarter based largely on sales of its F-Series pickup trucks and SUVs and despite slowing sales in China.