Ford Cuts Jobs, CEO To Step Down

  • Tuesday, 06 June 2017 00:00
Mark Fields Mark Fields

Michigan, USA: Ford Motor, facing pressure to improve profitability, announced it would cut nearly 10 percent of jobs in its North America and Asia Pacific divisions. The company’s chief executive officer, Mark Fields, will also be stepping down amidst plummeting stock prices.

The move is part of the company’s strategy to becoming efficient and lean in its business operations.

The job cuts will affect 1,400 of about 15,000 salaried workers in North America and Asia Pacific.

The reductions will be spread out among salaried departments, and will be completed by October this year. The departments that will face cuts include communications, corporate staff, finance, government affairs, legal, marketing, purchasing, sales and service. These departments account for more than 11,000 salaried employees in North America and more than 4,000 in the Asia Pacific region.

The cuts are not expected to affect hourly workers at Ford's factories or operations in Europe and South America, which have already seen workforce reductions. There are four divisions which will not be affected in the job layoffs—Ford Credit, product development, information technology and global data and analytics—as the company aims to strengthen its efforts in automation and electric vehicles.

The company’s chief executive officer Mark Fields, 56, is stepping down, to be replaced with board member and Ford Smart Mobility chairman Jim Hackett.

Mr Hackett, 62, the chairman of the unit that works on autonomous vehicles, would take on the helm. He was previously the chief executive officer of furniture manufacturer Steelcase, where he transformed the company from traditional furniture manufacturer to a leaner, more progressive provider of the open office work environment.

The company’s shares went down by nearly 40 percent since Mr Fields took over three years ago, at the peak of the US auto industry's recovery. The board of directors and chairman Bill Ford Jr have been unhappy with the company's performance and sought more reassurance that investments in self-driving cars, electric vehicles, and ride services would pay off.

In his new role, Mr Hackett will be focusing on three priorities at the company: Sharpening operational execution, streamlining Ford’s present business and transforming the company for the future.

"We remain focused on the three strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities," Ford said in a statement.

APMEN News, Jun 2017

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