Ford Cost-Cutting Plans Could Be More Severe Than GM, Says Morgan Stanley Analyst
Although Ford is undergoing its own restructuring, and has for some time, it’s dismissed the claims as ‘pure speculation.’
An analyst for investment bank Morgan Stanley predicts that Ford will follow in the footsteps of General Motors and eliminate thousands from its workforce in 2019 as part of a grand cost-cutting campaign said to total $11 billion.
The analyst, Adam Jonas, wrote Monday that he forecasts large-scale job eliminations at Ford, which Bloomberg says could total as many as 25,000.
"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 stated Monday. "But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers."
GM plans to eliminate more than 14,000 jobs from its business worldwide, the majority of which will be hourly positions instead of salaried. Downsizing, however, isn't limited to these two of Detroit's Big Three, according to Jonas, who says that this trend could encourage other international automakers to launch similar programs to repurpose cash for investment into electric propulsion technology.
"This is not just a GM or a Ford thing," he continued. "There are bigger forces at work driving global OEMs to rethink the fundamental idea of supporting increasingly obsolete segments, propulsion systems, and geographic regions."
Ford dismissed Jonas' claims as "pure speculation" to The Detroit News.
Even the most conservative automakers such as Mazda forecast full-lineup electrification by the end of the 2020s, and some such as Porsche reportedly aim to have electrified vehicles make up more than 90 percent of annual sales volume in 2026. Ford will too bring electric vehicles to market in the near future, with an electric crossover expected for release as soon as 2020.
MORE TO READ
GM’s Cruise Autonomous Driving Division Names Dan Ammann as New CEO
Ammann is responsible for securing to major investments, one from Honda and another from Japan’s SoftBank.
President Trump Slams GM for Plant Closures, Threatens Removal of All Subsidies
Statements from the President’s economic advisor suggest that the White House may use GM’s actions to rescind the Federal EV tax credit.
GM Stops Vehicle Production at Hamtramck and Lordstown Plants Amid Company-Wide Restructuring
The Ohio and Michigan factories are being put on idle as other GM facilities face full closures.
Here Are the Cars GM Killed Today With Its Global Restructuring Plan
To accelerate the future, General Motors is cutting dead weight in the present.