Morgan Stanley Predicts Ford to Cut 25,000 Jobs in Overhaul
Ford has yet to detail its job cuts, but Morgan Stanley analyst Adam Jonas predicts they could be larger than GM’s in a note to investors.
“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”
Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.
“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”
Jonas said other automakers will be forced to follow GM’s and Ford’s actions as the industry transforms, first to abandon factories building slow-selling sedans and ultimately to retool to build electric and self-driving vehicles.
“We believe existential business model risk will be prioritized over near-term profits and cash return,” Jonas wrote. “We still do not believe investor expectations have fully considered the near-term earnings risk.”
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