Job losses join tariff losses.
Ford isn't best pleased with the US government.
Tariffs on Chinese metal have already eaten into more than $1 billion of profit as Ford imports the steel, and most critically, the aluminum integral to F-150 production from the People's Republic. The company has been quick to blame US president, Donald Trump, for the predicament it currently faces, and now NBC News is reporting that it's about to get worse.
The Blue Oval brand will be forced to make significant cuts to its workforce, including a large number of white-collar positions, which could see the company ditch nearly 24,000 people in total or some 12 percent of its global workforce. Of course, a majority of those job losses are tied to the ending of numerous car programs in North America, but let’s not let that get in the way of a good political narrative.
Ford is headed into a massive reorganization phase, a plan for which CEO Jim Hackett has yet to reveal more than a year after he took the helm from Mark Fields. The tariffs set against China by the Trump Administration and the retaliatory tariffs China fired back at the US certainly aren’t making things in Dearborn any better, despite the new train station.
If you enjoy irony, there’s none better than the current predicament the company currently face. First, it canceled plans to make the Focus in Mexico in the hopes of avoiding friction with the government, choosing to send the work to China instead. But now, the Focus Active won't even make it to North America because the new tariffs have made it an economic dead horse.
Also don't forget that earlier this year Ford announced it would cut all passenger cars from its North American lineup, except for the iconic Mustang, in order to focus on high-profit SUVs, crossovers, and pickups. Well, with a massive reduction in programs to work on, Ford naturally has massively reduced its demand for human capital, which isn't the result of tariffs at all.
The company’s stock is currently trading below $9 for the first time in nearly a decade, and things will probably continue to get worse before Wall Street starts to look upon Dearborn favorably.