Ford CEO Jim Farley has been very clear that he believes the automaker is overstaffed by a significant margin, which inevitably led to rumors of pending job cuts last year. However, there are many of these reductions on the way, partly due to the fact that all-electric vehicles require far less labor to produce than their ICE counterparts – which is precisely why FoMoCo plans to cut thousands of jobs in Europe after meeting with union officials in that region. Now, mere days after Farley expressed frustration with Ford’s disappointing 2022 financial performance – which was aided by the automaker’s overstaffing issue – the executive has noted that the company employs 25 percent more engineers than its needs as well, according to Bloomberg.
“It takes us 25 percent more engineers to do the same work statements as our competitors,” Farley said on the SiriusXM show Cars & Culture with Jason Stein during a recent interview. “I can’t afford to be 25 percent less efficient.”
These comments are just the latest indication that FoMoCo plans to trim its workforce in the coming months in a variety of areas, particularly those where Farley believes the company is overstaffed and wasteful as the CEO aims to turn things around and improve profitability. Last week, Farley noted that Ford left “$2 billion in profit on the table” due to supply chain issues and wasteful spending.
Farley is aiming to slash around $2.5 billion in costs this year, at least some of which will come from job cuts. In Europe, the German union IG Metall believes that The Blue Oval could slash around 3,200 jobs in that region alone, while the automaker might eliminate roughly 8,000 in total across the globe. Additionally, Ford cut bonus payouts for some of its tops executives following the company’s most recent earnings report.
We’ll have more on Ford’s planned job cuts soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
The overstaffing is a result of:
– Ford not consolidating VC’s in Europe (Dunton and Köln) during Ford 2000; and
– an excess of engineers related to all things ICE powertrain;
Technology transitions are difficult, to be fair, Ford is understaffed in BEV and overstaffed in ICE engineers.
For a time Ford will be “double staffed” on the powertrain side and on the vehicle programs side but this 25% will attrit as all the ICE related hardware disappears from new vehicles.
As Ford discontinues small ICE powertrain and the related vehicles and as BEV portfolio takes shape, this personnel imbalance between ICE and BEV will flatten out.
But GM is hiring and spending almost a billion on a new small block v8. Many old Ford ICE engineers are at GM and Chrysler now.
“Many old”, doesn’t sound optimal.
Perhaps you mean former, but even so, I’m surprised you didn’t say only the good ones went to GM and Chrysler.
Also what’s wrong with those companies if they can’t already develop new engines?
Correct Old has nothing to do with age. They cut many different years experience to keep law suits down. BEV’s are a losing cause
Actually Ford habitually gets into legal trouble when it cuts because regardless of method they cut the older high earners disproportionately and then come the civil suits.
As for how you get from personnel cuts to your conclusion on BEVs is a kind of mysteriously bizarre leap.
Too many engineers, yet too many recalls.
Simple answer is put the existing engineers into the current ICE side vehicles, the ones making profit as long as the supply chain failures don’t drown them in recalls, fire all the people that thought it a good idea to invest in Rivian and the AI driving company that has cost Ford so Dearly. and then offer clean sheet engineering jobs for the BEV Side. Those vehicles only use the engineering assigned to that cost center and see if that results in maybe a profit on the EV side. For now they are basically biting the hand that feeds them by dumping on the ICE side vehicles.
Except that is what Ford has already done by creating Body, ICE and BEV groups.
ICE will ramp down as BEV ramps up.
The ramp rates and scale will be asymmetrical because more will be cut on the ICE side than will be added on the BEV side because ICE product development is very very personnel intensive.
Stop filing all these absurd patents. Good area for cuts.
LoL are you doubling as Bil The Cat? He has a real thing against patents too.
Amen, I’ve never seen so may absolutely stupid patents it look like a bunch of 14 year old’s developed them.
Can’t they put some engineers to work on quality control and just fire the whole procurement organization?
As usual Farley has to blame everyone else for his failure in leadership! Ford’s quality, Jim admitted, has been bad for several decades and is not getting any better. Ford has squandered it’s money over the years in office buildings for example, the Detroit Train Station that has cost over 950 million. Several other office buildings are under construction all the while 80% are working from home. Ford has already layed off over 5000 engineers. Laying off more Engineers is not going to solve Ford’s quality or financial problems. Ford has been hiring many executives in all departments over the last several years. How many executives have been layed off?
The magic elixir to appease analysts are layoffs, layoffs, and more layoffs. This leads to a cycle of destruction- senior employees are bought out, the expertise is gone, those left are overwhelmed and/or do not have the expertise needed to run the place and it leads to what we have seen at Ford.
The Train Station s a lot of “non value added” as far as Ford’s bottom line is concerned. Also, they did not need to spend billions of dollars on a new assembly plant for trucks when they could have converted one of their underutilized plants.
100% agree, especially the building bit. Here in Australia it was always a joke when Ford built a new factory/office it had to meet North American Ford standards, just one of which the roofs had to be able to support so many tons of snow… WTF.
Also regards engineers, it’s being reported that Ford Australia will be having its work force (predominantly engineers) cut after the final work on the current Ranger is completed and the next model will go to America. (Not having a go at Americans here) Why would any company do that when the Australians have designed engineered and tested the old and new generation of Rangers to be one of the most capable, popular and profitable vehicles in the world. I think America is the one place that the Ranger is not either the first or second most popular vehicle not only in its category but across the board. Farley, as he himself has said, needs to ensure their cars stop falling apart or being the subject of recalls and the way to do that is to engineer/design better vehicle components, screw them together better and sort out dealerships by kicking them out if they consistently get poor consumer reports due to either poor service or outright lying to customers and ensure that if a product fails miserably ensure it’s fixed as one company not let every country try to lie it’s way out of any issues such as happened with the Focus auto trans. I’m America an eventual admittance of the transmissions issues, replacements or complete vehicle buy backs agreed to but go to another country and it’s the same old “it’s the way you drive” BS and the need for court actions to sort things out. Ford also need to take a leaf out of other manufacturers, especially the Asian ones, Ford constantly say it’s not profitable to produce vehicles in RHD for such a small market yet virtually every non American company produces them as they understand the concept that whilst you might lose dollars on some cars if you provide enough alternatives the buyers are less likely to walk into another dealership. In Australia Ford sell 6 models go across to Toyota and they have about 12 as do other brands. I’d love to buy another Ford but until I know that it won’t be in the workshop every month and the dealerships have my back it’s likely my next car won’t have the blue oval on it; very sad after nearly 50 years and over 60 models of Ford’s gracing my driveway.
I’m not sure how referring to buildings built like a half a century ago bolsters your point for Ford’s current situation.
Some companies produce RHD as a matter of course because their home market is RHD, other LHD home market producers don’t always pursue RHD on a given model because it’s not destined for RHD export markets.
I did enjoy your comment tho.
I would guess a goodly portion of the layoffs will be through buyouts and attrition. I hope the “good’uns” are retained for BEVs; a team that can design and develop a lighter, efficient crankshaft could also D&D a better armature.
If Ford has problems building ICE cars after 120 years, I don’t have too much faith in their abilities to lead in EVs.
Keep the engineers because they design the cars and the equipment to build them. Just fire top management and save millions.
Don’t expect any of these engineers to ever work for Ford again. Other automakers will welcome them with open arms. Ford just cannot do anything right.
Agree many are at GM and Chrysler now and other major suppliers
You guys kill me.
Both GM and Chrysler will have to cut development staff as their EV programs ramp up.
This is a certainty.
Maybe redirect their talents into quality control. There never seems to be enough resources in that area.
Quality control isn’t supposed to be needed nowadays because the quality is supposed to be designed into the product.
This has been the way of industry for about 50 years now.
If it’s not right the first time there’s a good chance engineering did a poor job by not eliminating variability in design or process or properly identifying and failure proofing potential points of failure.
The real issue is in supplier management. Typically your supply chain organization is grades on on time delivery, and positive price variances. If you can buy something from a cheaper vendor, they get to claim a win. If that vendor sucks, can’t hit prints, has lax quality, requires tons of time to manage them… Doesnt hit their metrics.
It boils down to poor management, creating poor organizational structure and metrics.
Best thing to happen to Ford is to be taken over by Honda or Kia.
Toyota is another good candidate; they still know how to make a profit on sedans.
That’s crazy man.
Fortunately not gonna happen.
Ford needs engineers who know what they doing. the quality of ford vehicles is awful. Plus they need designers who know how to design much better interior especially in the Ford vehicles. many less expensive cars and suvs have done a far better job in that area
I think Farley is setting up a Bankruptcy filing. Need to finish the train station Resto.
Your comment wins the capital D for capital dumb.
Just plain nonsense.
Why don’t you find another forum to insult people chief
Because you and your ilk are such juicy targets.
Maybe you can find a better forum for leaving nonhelpful nonproductive nonsensical glop.
PS. Can’t wait for the inevitable nimrod response from Dumb with a capital D.
What ilk leftie
It’s remarkable Ford isn’t doing better with such a successful new product strategy. It should have been more than enough to bolster their bottom-line and to tolerate at least ONE “Commodity” product like Escape. But when you look at their complexity and their failure to consolidate, especially around electrification, you can see why they are run so inefficiently. They have several hybrid and PHEV systems, most of which are lower volume than expected because they ended up scaling back significantly on their hybridization plans. That all adds to their engineering and warranty obligations long-term. GM otoh completely scrapped Hybrids and PHEVs, significantly de-invested in ICE, and dumped it all into BEVs. This set them up for improved operating efficiency while saving resources at a time when fuel efficiency was less critical. Ford had good intentions, but they overspent in the wrong areas and have fallen behind on key next-generation technologies. Cars like CD6 should never have been greenlit, low volume one-vehicle platforms were suppose to be verboten at Ford, and CD6 ended up being a massive lemon at the same time. Ford also diversified their electronics architectures which is the worst thing you can do to cut cost, which also contributed to inconsistent feature rollouts and software updates that are making all their refreshes more expensive. And now Ford has a very tepid EV strategy that got them to market, but ultimately set them back years without a proper volume EV strategy to get costs down. They’ll get there eventually, and perhaps do better, but they are definitely going to be a much lower volume EV maker this decade than GM and the gap will be very obvious both in profitability and sales leadership. Fortunately I think they’ve prioritized Lighting to prevent Ford from losing too much ground, without Lighting the future would be pretty bleak for Ford.
GM overinvested in BEV and is likely going to end up bankrupt as those vehicles fail.
LoL. Moronic Forecasts’ forecasts are moronic.
The Ford Lightning, battery range under 100 miles when towing 10,000 pounds at highway speeds.
So don’t buy it for doing that if you have range anxiety.
But if you need to haul 10k pounds know that you can still do it albeit with a limitation in between charge range.
The poor quality of many recent products would say otherwise.
The only excess of engineers they have is in their EV department, where they’ve got an excess of vehicles that aren’t selling.
LoL Re your 2nd graph, how about putting up some facts to bolster that counterfactual glop.
Dealers have tons of mach E and Lightnings sitting around on lots unsold. Go to a dealer. They’ll try anything to get you into these expensive vehicles nobody wants.