Ford: Cutting unknown number of salaried positions, credit rating downgraded

 

DEARBORN, Mich. — When Ford Motor was celebrating the 100th anniversary of its Rouge industrial complex last week, its chairman, William C. Ford Jr., offered an optimistic outlook for the years ahead.

The company is still solidly profitable, he said, and while it is losing money overseas, it is working on a solution. Furthermore, he praised the ability and leadership of Ford’s chief executive, Jim Hackett, who he said was doing “a really good job.”

“I don’t think it’s even close to a crisis,” he said.

Not everyone shares his confidence.

The automaker’s bottom line is weakening despite record sales of its pickup trucks and sport utility vehicles. In August, its credit rating was cut to one level above junk status. And Ford’s stock price has fallen to its lowest point since 2009, when the United States economy was in a deep recession.

“The foundation of Ford — the trucks — is still healthy, but there are concerns about whether Ford has prepared for tomorrow and the future,” said Karl Brauer, executive publisher of the auto information providers Autotrader and Kelley Blue Book. “Ford hasn’t been effective enough in convincing investors that they are.”

In the latest move to cut costs, Ford is reorganizing its worldwide salaried work force of 70,000 with the goal of having a leaner staff by the second quarter of 2019. The move, outlined to employees on Thursday, is likely to eliminate several thousand jobs, said Karen Hampton, a company spokeswoman.

“We believe there will be reductions as part of it, but we don’t have specific targets,” Ms. Hampton said. She said the reorganization was meant to speed decision-making and cut the time it takes to develop new vehicles, two points that Mr. Hackett has emphasized.

The effort was first reported by The Detroit Free Press.

Part of the frustration among those sizing up the company stems from Mr. Hackett’s slow rollout of a recovery plan. Since taking the helm in May 2017, Mr. Hackett has outlined broad cost-reduction goals, but has stopped short of explaining how they will be achieved. Ford once planned a daylong meeting with Wall Street analysts on Sept. 25, but canceled it in July, saying it needed more time.

Elements of the plan are emerging bit by bit. Beyond the reduction in the salaried work force, another initiative involves partnerships.

Ford is in talks with Volkswagen about a broad alliance that could help turn around its ailing operations in Europe and South America. It is also discussing ways to expand cooperation with Mahindra, the Indian automaker. India is another market where Ford is struggling.

www.nytimes.com/2018/10/05/business/ford-motor-cars.html

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