DETROIT (AP) — About 3,000 white-collar workers at Ford Motor Co. will lose their jobs as the company cuts costs to help make the long transition from internal combustion vehicles to those powered by batteries.
Leaders of the Dearborn, Michigan, automaker made the announcement Aug. 22 in a companywide email, saying that 2,000 full-time salaried workers would be let go along with another 1,000 contract workers.
The cuts represent about 6% of the 31,000 full-time salaried workforce in the United States and Canada. Ford’s 56,000 union factory workers are not affected. Some workers also will lose jobs in India.
The job losses come at a time of unprecedented change in the auto industry that for more than 100 years has made a living by selling petroleum-powered vehicles.
Governments across the globe are pushing to eliminate combustion automobiles to mitigate the impact of climate change.
Companies like Ford are orchestrating the wind-down of their combustion businesses over multiple years, even though they are still generating the cash to fund electric vehicle development.
Ford has said it plans for half of its global production to be electric vehicles by 2030.
Executive Chairman Bill Ford and CEO Jim Farley said in the email to employees that Ford will provide severance benefits and significant help for the workers to find new jobs. They wrote that Ford has a chance to lead in the new era of connected and electric vehicles.
“Building on this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” the email said. “It means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new companies.”
Farley and Ford wrote that the company examined each team’s shifting work to decide where cuts would be made. The company determined that its cost structure wasn’t competitive with General Motors, Stellantis and Tesla.
Ford has said previously that it has a target of cutting $3 billion in annual internal combustion vehicle structural costs by 2026.
“We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” they wrote in the email.
Farley has said repeatedly that the company’s global workforce of 182,000 is too large, and it needs to trim costs and simplify processes so it can move faster as it transitions to electric vehicles.
The company already has restructured in Europe, Asia and India.
The cuts may not be over. Company spokesman T.R. Reid said Ford will continue to change with the industry and more job losses are possible.
He said it’s common for companies to continually add people where they need them and trim where fewer jobs are needed.
“With the fast pace of this industry, we’re going to manage the business smartly for these rapidly evolving priorities,” he said.
Ford shares, already under pressure after a $1.7 billion verdict against the company related to a vehicle fatality in Georgia, slid almost 6% and led automakers lower amid a broad sell-off in markets.