Reports now suggest that over 20,000 jobs may be at risk due to tariffs.
It’s an understatement to say that the political climate in the United States right now is turbulent. There has been much back-and-forth about the trade war between China, the U.S. and China. But Ford appears to be emphasizing that President Trump’s tariffs are the driving force behind all the problems. It could also lead to mass layoffs at Ford.
We reported a few weeks ago that Ford CEO Jim Hackett expected the company to lose $1billion in profits due to the metal tariffs imposed on steel and aluminum imports form China. NBC News reports that the company will make substantial cuts to its white-collar workforce. Another report from Morgan Stanley suggests that these layoffs could reach 24,000. This would represent approximately 12 percent Ford’s global workforce.
This is all part of the Blue Oval’s biblical reorganization plan. It’s meant to reduce costs, move investments into new tech and make the company more profitable. Trump’s tariffs against China don’t seem to be working, nor do the retaliatory tariffs China placed on U.S. goods entering China.
Trump and Ford have had friction before. After Trump threatened to impose big tariffs on Mexico, the company changed its mind and moved Focus production there. Instead, the work went to China where Ford planned to build and export the Focus Active. The company has since removed the vehicle from its U.S. lineup as it is no longer financially sustainable.
Ford made waves when it said all sedan and passenger car models would no longer be available in North America, except for the Mustang. Ford pledged to concentrate on SUVs and crossovers as well as pickup trucks, all of which are still strong sellers in the U.S. The company has been criticized for abandoning a segment that saw it sell upwards of half a million cars in 2017.
Ford stock dropped below $9 for first time in many years. It seems that the automaker will face more problems than good with the spread of mass layoff rumors.