Ford, BMW Planning Job Cuts In U.S.
According to Bloomberg, the latest round of cuts are unrelated to financial complications stemming from the pandemic. They’re just another saga in the company’s extensive restructuring program, with sources suggesting an official announcement by the manufacturer should be made within a week or so.
Ford is in the midst of a sweeping reorganization as it seeks to reverse declining fortunes and achieve what CEO Jim Hackett calls financial “fitness.” The company expects to report a full-year operating loss for the first time in a decade.
Last year, Ford closed plants and eliminated thousands of jobs in Europe, where it has been losing money. In North America — the automaker’s most profitable region thanks to F-Series pickups — the cutbacks are smaller and are expected to come in the form of voluntary buyouts. They are in addition to 2,300 previously announced salaried job reductions in the U.S. during Hackett’s tenure.
BMW has likewise decided to trim down its workforce in the United States. Reporting from Automotive News indicates these are related to COVID-19 , however. “The effects of COVID-19 are far-reaching,” BMW of North America CEO Bernhard Kuhnt wrote in letter to dealers that was intercepted by the outlet. “Given the reduced size of the business, we now need to … re-scale our business across the company accordingly.”
Ford outperformed expectations in the second quarter by only posting a loss of $1.9 billion (pre-tax and interest) instead of the $5 billion it had predicted during the start of the pandemic. Meanwhile, BMW’s Q2 showing was worse than expected. The smaller automaker found its operating profits $790 million in the red as sales in the first half fell by 28 percent against the previous year. While both anticipate the rest of 2020 to be a tad more merciful, neither expecting their year-end reports to be loudly celebrated by investors.
For most automakers, the rest of this year will be all about seeing how well things can be improved to reduce the ugliness that has to go into their end-of-year reports, while at the same time ensuring 2021 kicks off with some momentum.
[Image: Image: Ford Motor Co.]