May 16, 2017


Ford tackles dwindling sales with speedy management layoff


This week, sources at Ford Motor Company told reporters that the automaker plans to cut 10 percent of its salaried jobs in North America and Asia, amidst a larger effort to reduce costs. Arthur Wheaton, an automotive expert and senior extension associate with Cornell University’s School of Industrial and Labor Relations, says the decision to trim salaried positions allows Ford to implement cuts faster as its stock price slides and profits dwindle.



Wheaton says:

“Ford's reduction in salaried employees would signal weaker sales and a longer term financial impact. Car and truck sales seem to have peaked around 17 million vehicles per year and car sales are slowing faster than SUV and truck sales.

“Reducing management does not require negotiations and can be implemented faster than layoffs and eliminating shifts. Ford and GM stock prices have not been increasing as rapidly as other companies.

“Tesla passed Ford in market value even though it doesn't make profits or many vehicles. Ford – and likely GM – need to be more aggressive in announcing changes to attract the attention of Wall Street.”


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