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Ford Motor to slash workforce by about 10 percent


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.....although 10% globally sounds like a response to poor performance in other areas, be that slowing production

in places like Mexico, India or South America to surplus engineering capacity across Ford's Centers of excellence.

USA and Canadian plants/ engineering centers should be fairly safe but not sure about Asia and South America.

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I thought the recent sentiment around here was that Ford's constrained engineering capacity was one of the factors in the delay of bringing new product to market...?

They have plenty of engineers, the issue is that production is deliberately constrained.

The other issue is the delivery cost of new platforms, Ford is clearly spacing out its costs.

 

even the latest cuts are all about saving money, CBS reported the rumors of 10% cut of salaried

employees worldwide was expected to save around $3 Billion in costs recurring each year.

I wonder if the truth is that a lot of those targeted cuts are actually casual or project hires

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They lost a lot of engineers back in 2007-ish and from what I've heard they still haven't recovered completely. Not to mention that you can't replace experience. I don't think Ford has enough qualified engineers to keep up with all the current product demands and new projects and that's one reason some products are being left to soldier on virtually unchanged.

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Having been through this for 30 years my guess is they'll be looking to reduce headcount in non-critical areas and will probably offer early retirement incentives and use it as an opportunity to cull the herd of low performing employees. They can't afford to cut engineering or manufacturing (unless it's manufacturing older products that are no longer needed). They might also cut or pare back (delay) some non-critical new programs as well.

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They lost a lot of engineers back in 2007-ish and from what I've heard they still haven't recovered completely. Not to mention that you can't replace experience. I don't think Ford has enough qualified engineers to keep up with all the current product demands and new projects and that's one reason some products are being left to soldier on virtually unchanged.

 

In some sense, I get the feeling that history is repeating itself. Taurus (again) rotting on vine. Same with Flex. Explorer soldiers on. Got caught with pants down on mid size truck and ecosport.

 

I get it, you can't be everything to everyone and you have to make smart choices but seems to me that resources are being spread too thin, especially when sales have peaked (at least for now).

 

The thing to keep in mind is this, we are at the infancy of the transportation revolution 2.0. Electric and autonomous cars are most likely the future. Ride sharing could possibly become the norm in big cities. How this all shakes out is anyone's guess. What I do know is you don't want to be the modern version of the carriage maker and horse breeder (looking at you FCA)!

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In some sense, I get the feeling that history is repeating itself. Taurus (again) rotting on vine. Same with Flex. Explorer soldiers on. Got caught with pants down on mid size truck and ecosport.

 

I get it, you can't be everything to everyone and you have to make smart choices but seems to me that resources are being spread too thin, especially when sales have peaked (at least for now).

 

The thing to keep in mind is this, we are at the infancy of the transportation revolution 2.0. Electric and autonomous cars are most likely the future. Ride sharing could possibly become the norm in big cities. How this all shakes out is anyone's guess. What I do know is you don't want to be the modern version of the carriage maker and horse breeder (looking at you FCA)!

 

Flex's limited life has been known for some time....not officially, but the writing has been on the wall almost since day 1, so that's not surprising. Some of your other points, ok, but they also have a slew of new products coming in the next few years that should hopefully solve these product gaps.

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Will Mark Fields' job be among the 10% that get cut ?

Not a chance, Fields was the architect for many of the changes implemented in saving Ford,

Mulally oversaw that process and got a lot of the credit for removing all the duplicated products and processes...

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Remarkably, the aging D3 Explorer is still selling quite well and I can only imagine what the next generation product could be.

I'm hoping that NG Expedition is a hit with nuyersm something they have been waiting to buy for so long now.

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Not a chance, Fields was the architect for many of the changes implemented in saving Ford,

Mulally oversaw that process and got a lot of the credit for removing all the duplicated products and processes...

Does he also get credit for the stock price disaster? Buh, buh....we need not worry...we have electric bikes to generate huge revenues.....and the self driving cars in another decade that nobody can afford....not to mention the cost of insurance! Edited by bdegrand
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I don't think it's engineers getting cut, it's probably going to be middle-management types whose jobs overlap or are just plain redundant.

You are correct. In 2007, when Ford offered salary buyouts to employees, it kept a significant layer of middle management that are still there today. Very much overlap and huge salaries with lease cars. Many salary employees were replaced with 'contract workers'

but middle management was mostly not touched or replaced.

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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. Ford said nearly all of its “skill teams” will be affected, except for product development, Ford Credit, manufacturing, IT and global data and analytics.




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A Ford spokesman said the reductions will affect corporate staff, including the finance, legal, human resources, communications, government, marketing, sales and service departments.

 

Pretty much what I predicted. You can cut 10% from those departments and probably not bat an eye. Early retirement for the older folks and separation packages for the low performers.

 

It really shouldn't be based on stock price or dictated by the board but probably a good thing to do anyway - especially if they haven't done it within the last 10 years.

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Not a chance, Fields was the architect for many of the changes implemented in saving Ford,

Mulally oversaw that process and got a lot of the credit for removing all the duplicated products and processes...

I don't know Fields history like some of you, and it sounds like he was the right axe man for the lean times, but that doesn't exactly mean he's the right guy for the flush times. Time will tell I guess.

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This is a pretty dramatic shift for Ford (driverless cars, connected cars, electric vehicles) and it's really hard to tell whether it will pay off in the long run and whether Ford is over or under investing.

 

 

There was an article on Autoweek's website speaking about Toyota and they seem to be just as unsettled by what direction the auto markets are going to be taking the next few years themselves.

 

http://autoweek.com/article/car-news/toyota-president-feels-strong-sense-crisis-era-zero-emission-and-autonomous-cars

 

IMO some of this is getting forced on the auto industry by the tech industry way of thinking and doing business...they (Tech) is trying to grow and they are focusing on established markets and shaking them up. I don't think transportation is ready for the 12-24 month refresh cycle that tech industry is used to....its going to have to be a much longer process since people don't change cars that often and I think some people are hitting "tech" fagtue to a point with everything. IMO autonomous cars won't be ready for prime time for at least another 10 years or so and its going to take just as long for it become common place. I can see it being the big thing in 20 years or so.

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As a member of the 2007 US salaried "mass exodus" I wonder how this will be executed. Specifically, what parts of the global "one Ford" will be affected According to the Automotive News article, it is only affect Ford US and Ford Asia-Pacific. I know Ford has cut back (shutdown ?) their offices in Japan, but they are still trying to grow China. Personally, I have to wonder about Product Development in Australia.

Ford said nearly all of its “skill teams” will be affected, except for product development, Ford Credit, manufacturing, IT and global data and analytics.

 

A Ford spokesman said the reductions will affect corporate staff, including the finance, legal, human resources, communications, government, marketing, sales and service departments.


If that statement is correct, it should have very little affect on product development. Actually, NA Product Development ("engineering") has been growing quite quickly for the past couple of years. Ford is back leasing large off-site buildings in the Dearborn area to house these people ahead of substantial progress on the re-building of the Research and Engineering Center. Much of "world wide engineering" is now done in Dearborn.

 

 

Interesting rumor from back in the Alan Mulally days. Reportedly he said, "In the aircraft industry, when we needed a 'reduction in force' we simply laid them off !" No early retirements, no severance packages.

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Like I said they're not going to hurt product development. Early retirement is usually a win/win because the pension is already funded. Longer term it frees up more senior positions for promotions and it allows them to bring in new talent down the road.

 

Adding a separation bonus is simply a nice gesture by the company and the cost is recouped within the first year. Personally I think it's just the right thing to do if the company has the cash, regardless of whether it's necessary or not.

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