October 11, 2018
The Ford Motor Company is preparing for major layoffs—reportedly, as many as 200,000 worldwide—after suffering a blow to profits of at least $1 billion due to tariffs enacted by President Donald Trump.
Layoffs will affect Ford’s 70,000-strong white-collar workforce as part of what the company is calling a “redesign” of its staff in an ongoing $22.5 billion reorganization, according to an NBC News report on October 8.
Ford CEO Jim Hackett told Bloomberg in September that tariffs on imported aluminum and steel, alone, were enough to knock the company on its heels.
“From Ford’s perspective the metals tariffs took about $1 billion in profit from us,” Hackett said. “The irony of which is we source most of that in the U.S. If it goes on any longer, it will do more damage.”
As a result of the ongoing trade war, the automaker now intends to cut back on production—almost exclusively manufacturing its popular and profitable SUVs and trucks. Its only passenger car will remain the popular Mustang, but production of the iconic brand could also be hurt if profits continue to fall.
One high-profile casualty of the cutbacks will be the new Focus crossover, which, the automaker already has said will not be offered in U.S. dealerships. The Ford Focus Active is manufactured in China. Because of the U.S.’s new tariffs on imported cars, it’s no longer profitable for the company to sell it in America, officials said.
“This is the first of potentially many vehicles that will disappear from the U.S. market” due to the trade war, Kristin Dziczek of the Ann Arbor, Michigan-based Center for Automotive Research told The Detroit Free Press.
Research contact: @Ford