The U.S. auto major Ford Motors has decided to lay off a total of 3,000 jobs across different segments in the U.S., Canada and Ford Business Solutions (FBS), its second division in India, as it intensifies its focus on electric vehicles to catch up to the likes of Elon Musk-led Tesla Inc. These actions come after Ford conducted similar operations outside North America in the recent months to cut extra costs. In April alone, Ford laid off 580 salaried employees.
"Overall, we are reducing our salaried workforce by about 2,000, as well as reducing agency personnel by about 1,000," says an internal letter from Ford.
In internal communication, accessed by Fortune India, the U.S. auto behemoth says the industry and the business environment are changing with "breathtaking speed", and that Ford wants to redeploy resources to focus on connected and electric vehicles. The Dearborn, Michigan-based company says it has an opportunity to create the most growth and value for the company and its shareholders since it scaled the Model T in 1908.
The company says its Ford+ plan combines existing strengths, new capabilities and relations with customers to disrupt the EV industry. Ford’s latest move comes in the backdrop of the company eying the biggest disruption in the EV space since the company introduced mass production during the Henry Ford days. For a start, Ford's Mustang Mach-E, an electric SUV that was launched in 2020 and the F-150 pickup truck launched this year have propelled the company to the second place in the U.S. after Tesla.
"Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century," says the letter signed by Ford’s executive chairman, William C. Ford Jr., and its chief executive, Jim Farley. Ford says it is reorganising and simplifying functions through the business, and announcements regarding these plans will follow soon, says the report. Ford says it'll provide benefits to those leaving the company and help them find new career opportunities.
Farley, on many previous occasions, has been warning about job cuts and lower costs across various markets. In September 2021, Ford followed its compatriots Harley Davidson and General Motors, wrapping up its manufacturing operations in India after being present in the country for 25 years. The U.S. carmaker cited dwindling profitability prospects and growing losses as the reasons behind its exit. The company ran two manufacturing units in the country — in Sanand and Chennai.
The company's vehicle assembly at the Sanand plant (Gujarat) was shut down in the fourth quarter of FY22. The plant has now been acquired by Tata Passenger Electric Mobility Ltd (TPEML), the EV arm of Tata Motors from Ford India, the defunct subsidiary of American carmaker Ford, in a deal worth ₹725.7 crore, excluding taxes. Ford says it sold the plant keeping in mind the best interests of those who were affected by its exit from the Indian market.
The acquisition includes entire land & buildings; a vehicle manufacturing plant along with machinery and equipment situated therein; and the transfer of all eligible employees of Ford India’s vehicle manufacturing operation at Sanand.
Meanwhile, while the Sanand plant has gone to Tata Motors, uncertainty still looms over its other manufacturing facility in Maraimalai Nagar in Tamil Nadu–where protests have erupted, perpetrated by workers who demand better severance pay. There was speculation that the Maraimalai Nagar plant will be used for the company’s ambitious project on electric vehicles–which gathered more steam when it applied for the PLI scheme. However, Ford later dropped the plan after a review.
