The cuts will affect the newly established Ford Blue unit that produces engines for gas-powered vehicles, as well as other salaried, operational positions throughout the company, people familiar with the development told Bloomberg.
Under the auspices of Chief Executive Officer Jim Farley, in March Ford diversified its automotive manufacturing into two distinct business projects: the “Model e” unit for EV development and “Ford Blue” for internal-combustion engines.
Some staff are likely to be let go this summer, and the layoffs may happen in stages, the people said. They are expected to target the U.S. sector of Ford, where 31,000 salaried workers are employed, Bloomberg noted. Declining to comment on the potential job cuts, Ford emphasized that it is committed to revolutionizing EVs, where many automakers believe the future of the car market is headed.
“As part of this, we have laid out clear targets to lower our cost structure to ensure we are lean and fully competitive with the best in the industry,” Chief Communications Officer Mark Truby said in a statement.
Reducing staff numbers is crucial to increase profits, especially in the Ford Blue division, which is not running as efficiently as it could be, Farley has said. The extra cash flow can support the subsidization of scaling up EVs. Some Ford profits have been lost to some of its EV models due to soaring commodity and warranty costs, Bloomberg added.
“The funding for that $50 billion, it’s all based on our core automotive operations,” Farley said in a March interview with Bloomberg Television. “That’s why we created a separate group called Ford Blue, because we need them to be more profitable to fund this.”
EVs have been viewed as a major step in the decarbonization of the economy. However, the energy transition to EVs, while environmentally friendly, has inevitably resulted in lost jobs, especially those of auto-service technicians and other blue-collar roles. It is still unclear whether EVs will be a significant source of net new green jobs, our Andrew Stuttaford has noted.
Ford’s plans come after President Biden, frustrated with the demise of his sweeping legislative agenda aimed at cutting greenhouse-gas emissions and preparing vulnerable communities for natural disasters, claimed the U.S. is in a climate “emergency” Wednesday. He vowed to use bold strokes to bypass Congress.
“Since Congress is not acting as it should, and these guys here are, but we’re not getting any Republican votes, this is an emergency,” Biden said. “As president I’ll use my executive powers to combat climate crisis in the absence of congressional action.”