Ford gets ready to cut jobs

Ford to cut jobs as sales level off, stock price lags

Ford Motor Co. confirmed Wednesday it plans to reduce 10% of its workforce costs in North America and Asia Pacific this year, through early retirement and special separation packages.

Reuters also learned from a source familiar with the plans that Ford intends to offer attractive incentives for early retirement so that it can cut the number of salaried employees by October 1.

The auto giant declined to comment on the reports job cuts but said that it remained focused on its core strategies to boost profitable growth.

Ford Motor Co. on Wednesday said it plans to cut 10 percent of its salaried employees in North America and Asia to cut costs amid slowing sales and growing investments in new technology. But Ford said it hasn't announced any job cuts and won't comment on speculation.

Ford Motor Co. has said that it wants to reduce costs by $7 billion in 2017 in order to increase profitability next year as US auto sales are expected to stagnate.

While Shanks said the rest of the year would remain flat against the previous fiscal, changed market dynamics with the USA auto sales taking a turn from a record-growth phase could bring the company's North America margins further down further after a significant drop in the most recent quarter. Mr. Fields has pushed new technology investments like a $4.5 billion electric-vehicle program and an autonomous auto project, two things eating away at Ford's profit margins in the short-term despite lucrative pickup and SUV sales.

Ford is getting leaner as it faces an onslaught of challenges, from slowing US sales to high-tech challengers to its own disgruntled shareholders. Ford said last August it planned to double its Palo Alto staff, which would mean hiring more than 100 researchers and engineers. The automaker is under intensifying pressure from shareholders to improve its profits and boost its lagging stock price.

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- Ford has around 30,000 salaried workers in the United States.

The auto maker also has around 25,000 employees in Asia, but there are no figures on how many of these are salaried.

Trump, in January, tried to take credit when Ford announced it was canceling a second Mexican plant. The move will reportedly not affect the hourly workforce.

Shares in Ford were up 1% to US$10.95 in pre-market trading.

The job cuts will come through buyout packages released to eligible employees in June.

Ford's shares have lost more than a third of their value since Mark Fields became CEO in 2014. The second-largest automaker has also been trying to boost its stock price, which has tumbled about 40 percent since Mark Fields became CEO almost three years ago.

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