President Donald Trump's tariffs have already cost the Ford Motor Co. $1 billion in lost profit, and now those tariffs could possibly have an adverse impact on the company's ongoing reorganization, according to NBC News— an endeavor that is already going to cost jobs.
Ford will be making cuts to its 70,000-strong white-collar workforce in a move it calls a "redesign" of its staff to be leaner, have fewer layers, and offer more decision-making power to employees, the company announced.
NBC said the company has not yet revealed the exact number of jobs to be cut.
“A lot of the (reorganization) is about making different choices about strategy,” Chief Financial Officer Bob Shanks told NBC News, adding that the goal isn’t just to slash spending but to improve the “fitness” of the company.
However, a recent report by Morgan Stanley estimates "a global headcount reduction of approximately 12 percent,” or 24,000 of Ford's 202,000 workers worldwide. "Such a magnitude of reduction is not without precedent in the auto industry,” analysts wrote in the investment note.
The decision is part of Ford's $25.5 billion reorganization plan, which includes slashing $6 billion in improved capital efficiencies. Ford CEO Jim Hackett, who cut more than 12,000 jobs as head of office furniture maker Steelcase, had been expected to make cutbacks even sooner, according to some observers. Hackett took over from Ford veteran Mark Fields when he was ousted from the company in May 2017.
Ford previously told Trump that his tariffs have already cost the company $1 billion in profits and has warned that his trade policies could adversely impact its reorganization as well.
Trump and Ford have been squaring off since well before the 2016 election, when then-presidential candidate originally threatened to impose hefty tariffs on vehicles Ford intended to start importing from a factory in Mexico. The carmaker eventually scrubbed that plan, but rather than return production to the U.S. it decided to move it to China.
Ironically, Ford actually may have to cut production of the Mustang and some other models — in the process, potentially reducing U.S. jobs — as a result of the tariffs China has enacted on American-made vehicles in a tit-for-tat trade war. The Mustang had been one of the most popular U.S. vehicles sold in that country.