Become a fan of Slashdot on Facebook

 



Forgot your password?
typodupeerror
×
Businesses Transportation

Ford to Fund Its EV Efforts in Part by Laying Off 8,000 Workers (caranddriver.com) 121

Up to 8,000 Ford employees could be hit by job cuts, according to a Wednesday report from Bloomberg. The move could be part of a plan to cut $3 billion in operational costs from the company's gasoline-powered business operations in order to boost profit and invest more into Ford's electric-vehicle endeavors. Car and Driver reports: The cuts will reportedly come in the Ford Blue division, which handles production of Ford's internal-combustion-engine vehicles, and primarily come from salaried positions. There are approximately 31,000 salaried workers at Ford currently. Ford CEO Jim Farley announced in March a radical restructuring of Ford called the Ford+ plan, creating the Ford Blue division and the Model e division, which handles electric vehicles. As part of the plan, he also boosted spending on EVs to $50 billion, which he said in an interview with Bloomberg Television was "based on our core automotive operations." Farley also added that "We need [Ford Blue] to be more profitable to fund this."

Previously, in February at a Wolfe Research conference appearance in reference to Ford's ICE operations, Farley said, "We have too many people, we have too much investment, we have too much complexity, and we don't have expertise in transitioning our assets." Ford lost $3.1 billion in the first quarter of 2022, although much of that was driven by a sharp value decline in its stake in EV startup Rivian. Operating profit, meanwhile, was at $2.3 billion, down from $3.9 billion in the first quarter of 2021.

This discussion has been archived. No new comments can be posted.

Ford to Fund Its EV Efforts in Part by Laying Off 8,000 Workers

Comments Filter:
  • by Powercntrl ( 458442 ) on Wednesday July 20, 2022 @09:10PM (#62720804) Homepage

    Ford to its workers over 100 years ago: "We want you to stick around, here's a crazy high wage!" [npr.org]

    Ford to its workers today: "GTFO, this Tesla knock-off isn't gonna pay to design itself."

    • by systemd-anonymousd ( 6652324 ) on Wednesday July 20, 2022 @10:15PM (#62720912)

      The refocus is an excuse to lay off workers as we plunge headlong into a massive recession.

      • by phantomfive ( 622387 ) on Thursday July 21, 2022 @12:58AM (#62721128) Journal

        In the past, Ford has laid off workers, then rehired them in a non-union area. That is possibly what is happening here.

        • by ShanghaiBill ( 739463 ) on Thursday July 21, 2022 @01:09AM (#62721140)

          Before that, Henry Ford tried to break the unions by recruiting blacks from the South and moving them to Detroit. The UAW was "white-only" at the time but soon realized that was not a good policy. So they opened up to their membership and unionized the black workers. It was only then that Ford offered higher wages.

          Ford was virulently anti-Semitic but got along well with African-Americans and always paid them equal wages.

        • No, just like they said publicly, they are winding down to TWO product lines, EV cars (Mustang) and EV trucks (Lightning), but to get there they need to sell a shit-ton of ICE cars to cover the expense of re-working production lines.

          Kind of amazing that the only way ford can produce EV cars/trucks is to keep pumping out ICE cars/trucks for the next few years.

          • Kind of amazing that the only way ford can produce EV cars/trucks is to keep pumping out ICE cars/trucks for the next few years.

            I don't know, sales of their EVs have been solid. You haven't been able to order a 2022 electric mustang for a few months now.

      • Re: (Score:2, Interesting)

        The refocus is an excuse to lay off workers as we plunge headlong into a massive recession.

        Ford doesn't need an excuse. Ford needs a business case. And it apparently has one. Why would they be paying 8000 workers they will not need? US economy is shrinking, inflation decreases the purchasing power, so people will buy fewer cars and, in particular, still fewer Ford cars, That means that they have to lower the car production and that they need fewer workers. Welcome to the transition to green energy.

    • He was keeping workers who were in a high tech industry of the time. Now they are getting rid of salaried workers in an industry that is in decline. Who needs another internal combustion engine design?
    • by cfulmer ( 3166 )

      Ford raised wages mainly as an incentive to keep his own workers. The auto industry in Detroit at the time was crazy -- people would jump from company to company and just take unannounced vacations knowing that they could easily find a new job when they returned. Ford raises his wages above his competitors, making it costly for employees to jump ship or to get fired. He ended up getting more reliable employees, and was driven by his business needs, not a desire to help his workers.

      From your article:

      • driven by his business needs, not a desire to help his workers.

        He should have had them sign non-compete contracts. I guess hindsight is 20/20.

      • No, no, NO! This is completely wrong! EVERYONE knows that higher wages causes lower profits, runaway inflation, & the sky falls in.
        • The job market of today is not like it was 100 years ago in Detroit.

          Forcing "Hot Dog on a stick" to pay high school workers a "living wage" to cover their housing, food, and medical expenses DOES absolutely drive up the cost of hot dogs on a stick.

    • Ford had a few other interesting interactions with employees you sorta glossed over, typically around unionizing, oh, and he had great admiration for all of Hitler's work in taking care of the "Jewish problem", but other than that, ol' Henry Ford was a great guy, a friend of the non-union white worker.

  • by ahoffer0 ( 1372847 ) on Wednesday July 20, 2022 @09:19PM (#62720816)

    No wants to be terminated involuntarily. But cutting jobs in a division where you don't see future growth is a pretty straightforward thing to do. I'm not sure why this is front page news.

    • Seems like you're missing the pain where EVs are their loss leader? What we more likely witnessing is a strike among the Capitalist class to discipline unionized labor, even if it costs them short term profits.
      • by bws111 ( 1216812 ) on Thursday July 21, 2022 @07:10AM (#62721492)

        You have no idea what a loss leader is, do you? A loss leader is an item that a retailer will sell at a loss in order to lead people into the store where hopefully they will also buy more profitable items. There is no way an EV is a loss leader. You also seem to have missed the fact that the cuts are from salaried positions, which generally aren't unionized. But other than that your post makes perfect sense.

        • You have no idea what a loss leader is, do you? A loss leader is an item that a retailer will sell at a loss in order to lead people into the store where hopefully they will also buy more profitable items. There is no way an EV is a loss leader. You also seem to have missed the fact that the cuts are from salaried positions, which generally aren't unionized. But other than that your post makes perfect sense.

          EVs used to be loss leaders / halo products to get you in the door so the salesmen can talk you into an ICE where the traditional companies have an edge. The game has changed though and now EVs are becoming commodity cars.

      • I have a hard time believing, based on past history, that anyone involved in the "Capitalist class" as you call it, would do ANYTHING that attempts to develop profits anywhere other than the short term. Most don't think beyond their next month. The real far-thinkers sometimes think about the next quarter. Nobody's thinking long-term when it comes to business decisions. The long-term simply doesn't exist to them.

        • Nobody's thinking long-term when it comes to business decisions. The long-term simply doesn't exist to them.

          I have lots of problems with Ford, some of the ones I'm having in my life right now have even dampened my enthusiasm for the F-150 Lightning, but as far as major US automakers go they are probably the most forward-thinking. As an example, take the aforementioned electric pickup truck; Ford moved the entire unibody of the F150 to using Aluminum years ago. They also have been moving the engine back towards the firewall. The combination has let them build an EV on the platform now without making it spectacular

    • Re: (Score:2, Insightful)

      But they're not cutting jobs. They're going to layoff workers. They're not reducing a division and moving those workers to different ones more aligned with their "plans". They're just laying them off.
    • I think it is news because Ford released a press release making it seem like a tradeoff. It was either that or two separate news stories: 1) Ford invests money in new EV production facilities to increase future profitability, and 2) Ford lays off workers to improve current profitability.
      • by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Thursday July 21, 2022 @08:25AM (#62721664) Homepage Journal

        You fundamentally do not need as many employees if you are building EVs. Motor winding is done by machine, and there are very few parts to put together. There are many special and expensive machines used, with human operators guiding them, in building ICEs. Battery construction is also largely automated. They are just fundamentally simpler things, mechanically. If you want them to be smooth and efficient they need a fair amount of complexity in the motor control hardware, but it's worth mentioning that the simplest modern production EV is actually fantastically overwrought compared to the simplest example that would offer good performance. Hobby-grade equipment can literally do that if simply scaled up.

      • I think it is news because Ford released a press release making it seem like a tradeoff. It was either that or two separate news stories: 1) Ford invests money in new EV production facilities to increase future profitability, and 2) Ford lays off workers to improve current profitability.

        You are correct. A more accurate title would be "For cuts workforce, blames it on EVs". These two things are separate decisions.

    • by khchung ( 462899 )

      You are missing the R word that the media is trying so hard to avoid saying out loud -- Recession.

      Recession is coming, and every company is trying to cut costs now to help survive through it, while making up all kinds of excuses to keep their stock prices up.

    • by larryjoe ( 135075 ) on Wednesday July 20, 2022 @11:32PM (#62721000)

      No wants to be terminated involuntarily. But cutting jobs in a division where you don't see future growth is a pretty straightforward thing to do. I'm not sure why this is front page news.

      Ford's strategy seems to be shifting resources from Blue to Model e. To see the big picture, the question should consider the 8,000 jobs cut from Blue along with the jobs that will be created in Model e. $3 billion cut annually from Blue, but $50 billion invested in Model e over the next four years. Will there be a total job loss from the combined Blue and Model e?

      • by Bert64 ( 520050 )

        It depends on the nature of the jobs..
        If you're an expert at designing internal combustion engines, then there won't be much use for you in model e.
        On the other hand if you're an assembly worker, or working on things like interiors or suspension systems then there's not a huge difference between electric and ICE..

    • And that's why the robots won't be taking our jobs. We'll just retrain and find plenty of other work for the existing employees.

  • They can all just get one of the millions of better "green" jobs that have been created.
    • They can all just get one of the millions of better "green" jobs that have been created.

      ...like manufacturing EVs.

      Too soon?

    • Re:No problem (Score:5, Insightful)

      by The Evil Atheist ( 2484676 ) on Wednesday July 20, 2022 @09:48PM (#62720872)
      If you think going green is what is causing this, then you just admit that you believe whatever the rich people tell you.

      If Ford is serious about their EV efforts, they'd move these workers to those units.

      What they're actually doing is they're just looking for an excuse to layoff workers, and they're blaming their EV efforts for it. And you fell for it.
      • we don't have expertise in transitioning our assets

        I'm not sure why you think it would be easy-peasy to transfer a bunch of people from the ICE division to the EV division. Their EV division is already staffed. Do you want to make up a ton of positions for the ICE people? Do ICE people have enough generic knowledge to be useful in an EV division?

        The article doesn't say where their $50bn investment is going. Maybe it's going towards equipment. Maybe they have enough people they just need to execute the ideas and plans those people have.

        They may be us

        • It would be easier-peasier than hiring complete outsiders.
          • Unless they need electrical engineers instead of mechanical engineers. I have no idea if that's the case, but then neither do you.
        • Re:No problem (Score:5, Insightful)

          by DarkOx ( 621550 ) on Thursday July 21, 2022 @07:31AM (#62721518) Journal

          There is a lot of things to consider here.

          One of those things is the EV market may end up quite a bit smaller than the ICE market was. There are lots of reasons for that.

          Body and frame materials are getting better all the time. Modern cars don't really have to rust (at least no the degree most of the cars we have known have/do). There hasn't been a huge incentive to fix those problems though because well the drive lines have had a finite life span too. Excluding the batter and all electric drive line should be cheaper to manufacture. There are just a lot few moving parts which means a lot less stuff with really fine mechanical and temperature tolerances. Industry knows how build a long lived brush-less electric motor, and I have differentials, drive shaft joints, and steering racks on 50 year cars now that have never been rebuilt and work great. Industry has this stuff down; for all the problems you hear about with Tesla quality issues, its not the main drive-line components with issues usually. In short I think we can probably expect to see 1-million mile EVs with the only major maintenance been a couple battery swaps along the way pretty often.

          The other question is who is going to own these things? It really does look like there may be a whole class of urban drivers who own a car today but shift into the short term rental market in the future. That could mean a lot higher utilization for a large portion of the fleet and in turn mean fewer vehicles are needed. While I doubt very much suburban and rural dwellers will give up ownership of their cars anytime soon, there is potential there as well for reduced feet. Even though its an extra trip and more miles if dad can take the car to work in the morning and it can drive it self home for mom and the kids to use during the day and then return itself to the parking lot for him, that might make economic sense for a lot families vs owning/insuring/maintaining/housing a second vehicle.

          For these reasons and others the auto industry might have 'right-size' itself to some degree. Its very possible after the uptake/transition to EVs might find themselves looking at a market that decreases in demand, at least in their more lucrative market places. Nominally the strategy if you believe that is where things are going would be staff up now, push product to market and capture as much market share as you can, and layoff the excess people and sell off the excess capital later. However this is the auto-industry. Unions make restructuring hard and costly, you can't just turn lose the overhead. That affects what you do with non-union workers as well. Because you need those people to get some return out of the manufacturing work force. A lot of auto-industry capital plant isnt super liquid, you can't find buyer for facility and equipment any time you want one, like if you decide to liquidate many other types of business. So some of this is certainly to avoid being caught bag-holding with a lot of extra overhead.

      • What they're actually doing is they're just looking for an excuse to layoff workers

        Capitalism doesn't work that way. They don't need an excuse to lay off workers.

        • You are crazy if you think capitalism doesn't depend on some amount of PR.
        • > Capitalism doesn't work that way. They don't need an excuse to lay off workers.

          public relations; noun (plural noun: public relations)

          1) the professional maintenance of a favorable public image by a company or other organization or a famous person

          They need an excuse to reduce the damage to their public image, which in turn effects their sales and their stock prices, which makes the shareholders upset and also makes it harder to raise money if they need it. Public relations is a vital part of any busine

          • No one buying a Ford is suddenly not going to buy a Ford because 8000 people they don't know got laid off.

            • I'm sure it wouldn't have much of an impact on their core market, but it might have some effect on sales.

              In this specific case it's not so much how many, but who. Ford is cutting back their ICE development division which I'd imagine the shareholders might get worried about. Tempering that by framing it as a restructuring and refocus, rather than letting it be seen as a desperate move to reduce operating costs, will absolutely help their stock value.
              =Smidge=

  • Proper title (Score:4, Informative)

    by The Evil Atheist ( 2484676 ) on Wednesday July 20, 2022 @09:43PM (#62720860)
    Ford looking for excuse to layoff 8000 workers.

    This is no doubt the machinations of the bean counters who don't understand the business. Most, if not all, the 8000 workers can be moved to different/new units and use their skills, adapt to the new skills required and organizational knowledge. Any retraining would cost less than hiring new workers and waiting until they adapt to a completely new working environment.
    • it's just a different assembly line.
    • EVs have a lower part count and require fewer workers.

    • First step is to see what actually happens. For now, it's "An anonymous source told Bloomberg on Wednesday that Ford is planning to cut as many as 8000 jobs from its Ford Blue division."

      How many will be transfers to Model E rather than net cuts? How many will happen at all? We don't know. And the less sensational the actual truth is the less likely the press will even bother to report it.

      • When stuff like this "leaks" out, it tends to be true and plans are most likely already in motion.

        The stuff about IBM laying off remote and old employees at scale came out long before it was confirmed.

        The best predictor of future behaviour is past behaviour, and big companies are the most predictable.
        • 8000 would be about 25% of Ford's salaried workers, which I don't think is plausible. If I had to bet, my bet is this will not come true, at least not in the simplistic way it comes across in this headline. Maybe it's their plan for the gasoline division over the next 5 years. Or maybe most of it will be transfers to their EV division. But I would be really surprised if we see them simply sending out 8000 pink slips next week.
    • What retraining? Why retrain people you don't need? EVs are no where near as complex and the new factories being built to make them have a higher degree of automation.

      8000 people are being made redundant because they aren't needed, not because of some lack of awareness that people can learn new stuff.

      • What retraining? Why retrain people you don't need?

        Spoken like a true bean counter.

        • If you want people to have jobs without a job to do I'm sure you could send them to China. Companies who don't count beans are companies that don't exist. Wasting money isn't a good financial strategy and if not wasting money on pointless employees with nothing to do makes me a bean counter then I'm not only proud of that designation, but really worried about how you think the world works.

      • Why retrain them? Why not get rid of them and bring in a new batch of graduates who are much cheaper, and essentially start with a clean piece of paper?

        • Still under the assumption that these people are being replaced with humans rather than machines or more efficient work practices. They don't need 8000 people full stop. If you want a mandatory payment program it's called social security and normally is the job of governments.

  • by 93 Escort Wagon ( 326346 ) on Wednesday July 20, 2022 @09:50PM (#62720878)

    Am I Blue, am I Blue
    Ain't these tears in my eyes telling you
    Am I Blue, you'd be too
    If each plan with your van done fell through

    Was a time ICE was the only one
    But now Blue's the sad and lonely one, lonely
    Was I gay till today
    EV's here and it's clear, ICE is through

    Was I gay till today
    Now ICE's gone and we're through, am I Blue
    ICE is gone, gas is done, am I Blue

  • to make the EVs? Something's very, very fishy here. Sounds like they were planning layoffs to boost stock price and are using the EVs as an excuse.
  • Ford does pay them enough to buy an electric car and the required accessories.
  • Like I was just telling some people earlier tonight? Tesla has been exclusively building and selling electric vehicles since 2012. And yet, despite them building several gigantic factories for making their own battery packs, they still have the Tesla semi truck, the new version of the Roadster and the Cybertruck in 3 variants that probably won't see mass production for YEARS - all because they're just not able to produce enough battery packs for all of them.

    The idea that Ford can just jump in with both feet

    • ... Even that F-150 EV pickup seems like a mistake to me, right now. That's a product that should have waited until batteries were more plentiful and less costly, and then they could have sold it with a larger capacity one. (Right now, it's getting slammed in most truck enthusiast publications for the lousy range when towing.)

      Ford has a century of experience building gasoline powered engines. Better to leverage that than to dump it all and try to pivot to EVs when that's still a new thing for them.

      As long as we're armchair quarterbacking here, I should probably point out a couple of things. First, long-term success in business requires a bit of gambling; if Ford doesn't start transitioning to electric now - in spite of a current battery shortage - then their lunch will have been eaten for breakfast by their competitors. Both technology and geopolitics are changing so rapidly right now that standing still is likely a death sentence.

      Second, because of AGW the handwriting is on the wall for ICE engines;

      • Both technology and geopolitics are changing so rapidly right now that standing still is likely a death sentence.

        And investors actually recognize this, which is why the ones who wanted to invest in auto companies invested in Tesla, instead of GM or Ford. Auto CEOs have whined that when they turned in a good quarter, the market failed to respond, while Tesla stock was shooting into the stratosphere. But it was based on Tesla trying something new, while they were still plodding along with a fundamentally unsustainable business model of selling ecosphere-burning machines.

  • To build more electric cars will take more micro-controllers, more batteries, more rare earth magnets, and so much else that must come from China and other Asian nations. There's been a mess at West cost seaports and the Biden appointed secretary of transportation is on paternity leave. The excuse has been that the adoption is important to the secretary and his deputy is supposedly capable to fill in. But then if the secretary knew he was taking a two month leave then maybe he should have stepped down as

    • The Biden administration is opposed to domestic energy production, domestic mining, domestic manufacturing, which comes with trying to convince foreign nations to supply these goods. That is driving up prices on everything... We are in a recession that was created by Biden. Putin may have force certain choices on Biden but Biden still has many options to get the USA out of a recession. Biden instead chose a recession. If he doesn't change course soon then voters will make choices that should get us out of this recession. The election may not remove Biden from office but it may remove Congress from his control. After that Biden may lose the ability to veto anything. Harris will also be quite powerless as the Senate won't need her to break any tied votes.

      I was nodding along with your post - disagreeing with significant parts of it, but counting it as rational and thoughtful - until I got to the bits I quoted above. Then I felt compelled to say "Give your head a shake and get a grip man!". First off, the Biden administration isn't "opposed" to the things you listed. They're opposed to how they're currently being done, for valid and important reasons such as sustainability and AGW.

      Second, Biden didn't "choose" a recession - he doesn't have that much power. A

  • Not mentioned in the summary is that EVs are mechanically simpler. Electric motors have far fewer components than a combustion engine, and a Tesla has, if I remember right, only a simple one speed transmission. Hence the coming global switch to EVs will for sure impact the manufacturing workforce.
    • There are several needs for announcement. Regulations , large cuts advance notice. Likely restructuring provisions so desire to segregate separation costs from operations. Re Assure investors future potential . Death of a SalesMan spreads to middle managers and legacy parts. Economy negative spiral gets more momentum.
  • Just figure out how to build a no-frills gas pickup for $20-$25k.
    • Why would I do that when I can import JDM Kei trucks [mitsuicoltd.com] from Japan for less than $5K??

    • The F-150 starts at $29,990 for a minimal-features XL. That's a ways off your ask, but not spectacularly. It costs relatively little to stuff more content in there, so if Ford can make a profit selling them for that, imagine what they make selling a fully optioned $80k model. It only makes sense for them to push the high end models. What I don't get is why people buy them. Even the best-handling trucks drive like crap compared to a sedan that costs that much, and a nice roomy LWB sedan is way more comfortab

    • Just figure out how to build a no-frills gas pickup for $20-$25k.

      Nah... I want a moderate frills, small to medium size PEV pickup. The Ford Maverick truck is about the right size I'm looking for, but a bit bigger wouldn't be terrible. Towing would not be an issue, but the ability to haul some bulky items on occasion would be nice.

  • Sad for Ford workers, but worse part is U.S. electrical grid will no where be ready by 2030 for expected mandate of EV vehicles. Youtube vid of confessional hearing showed that compared to a refrigerator, a EV charging will use more 50x power ! Most power grids will NOT be able to handle that even at night, especially Texas grid.
  • Farley will get his bonus even though he pushed for Ford to take a big stake in Rivian which most of their $3.1B loss in Q1 [cnn.com]
    but according to the great dumpster fire that is Farley...

    "We have too many people, we have too much investment, we have too much complexity, and we don't have expertise in transitioning our assets."

    Meaning, "we're not retraining staff, we're getting rid of those people who are making us money in an attempt to be all green and shit."

    He also said.

    "We need [Ford Blue] to be more profitable to fund this."

    The blue division is profitable, hell they're selling $50K+ pickup trucks [motor1.com] but the idiot wants more profitability from them? In essence, "Let's sacrifice profitability and loyal emplo

Avoid strange women and temporary variables.

Working...