In the name of profit, Ford Motor Co. (NYSE: F) said it would fire more people, pushing the total numbers in the past year well into the thousands, and this is not the end. The process will take as many as two years, but 3,800 people at Ford Europe will be gone. The layoffs are part of the rotation of Ford from fossil-fuel to electric vehicles (EVs), a process that has been slow by the standards of critics. The workers, in other words, should have seen it coming.
Indeed, Ford has telegraphed that it is much too large. CEO Jim Farley recently said Ford has far too many engineers. His argument is based on the engineer count at more efficiently run rivals.
While the layoffs are to be spread over as much as two years, so is Ford’s car quality recovery. Ford has admitted that it lags most of the industry in quality. Farley also has said it will take years to fix this because it took years to create the problem. That is a sad statement. One of the world’s oldest manufacturing companies cannot regain its quality edge more quickly. The fact that this is true is breathtaking. (Click here for the most fuel-efficient new trucks this year.)
Ford has entered the fight of its life. Executive board chair and family member proxy William Clay Ford Jr. has said so. The Ford family’s fortune is partially on the line. While Ford’s stock has recovered recently, it skidded 25% in the past year. Farley’s job is on the line as well.
Ford has admitted a large part of its way forward is to fire tens of thousands of people, and overstaffing has caused much of its current trouble. What management has not said is how things got this way.
Get Our Free Investment Newsletter
Ford, if anything, will be stretched thin soon, if it is not already. It has to run a legacy business and create an EV-centered future. That feels like two businesses. It is a neat trick to figure out how that is not the case.
Ford has an uphill climb in the EV market. Every major manufacturer has charged into the sector, convinced it is the wave of the future. The industry has not been this competitive since the invention of the windshield wiper. As a means to drive efficiency in a risky period, the bodies already have started to pile up.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Source: Read Full Article
Asian shares fall, dollar gains after Fed minutes
DBS to launch digital currency exchange; trading may start as early as next week
How muni bond interest can trigger Medicare premium hikes
Saudi crown prince takes some responsibility for Khashoggi death: PBS interview
Lagarde will have 'very little' left to tackle any euro zone weakness, bank CEO says