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Ford Prepares For Mass Layoffs After Losing $1 Billion To Trump's Trade Tariffs, Report Says (Demo)

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By Gary Reber Uncategorized November 26, 2018

On October 9, 2018, Kevin Kelleher writes on Yahoo! Finance:

Ford is having a bad year in 2018. Its stock is down 29%, and the tariffs imposed by President Trump have reportedly cost the company $1 billion, as the company is in the midst of a reorganization. Now, the company is announcing layoffs.

Jim Hackett, Ford’s CEO, is working to engineer a $25.5 billion restructuring of the automaker, hoping to cut costs and remain competitive, the Wall Street Journal reports. But auto sales are down, and one reason is the trade tariffs that Trump has imposed on metals and other goods. According to Bloomberg, Hackett has said they have already cost the company $1 billion in profit and could do “more damage” if the disputes aren’t resolved quickly.

Ford, the No. 2 U.S. automaker by sales, is making aggressive job cuts as part of that reorganization, NBC News reported. While the company hasn’t said how many jobs will be lost, a report from Morgan Stanley estimates “a global headcount reduction of approximately 12 percent,” or 24,000 of Ford’s 202,000 workers worldwide.”

While reports have indicated that the job cuts are likely to come early next year, The Kansas City Star reported Tuesday that Ford has temporarily halted production of transit vans in Claycomo, Mo. The move is intended to prevent a build-up in Ford’s inventories of the vans, but it will leave 2,000 workers idle between Oct. 22 and Nov. 4.

Despite news of the layoffs, Ford’s stock closed down 3.4% Tuesday.

At a time when automakers are scrambling to prepare for self-driving cars, Ford is also struggling to keep pace with the rest of the industry. September was a bad month for U.S. auto sales—with aggregate sales down 7%—but Ford’s drop off was even more severe. Ford said its sales of its vehicles declined 11.2% last month, with sales of its best-selling F-Series pickup trucks down 9%.

Ford has not responded to Fortune’s request for comment.

Gary Reber Comments:

Corporations are always seeking ways to reduce costs by downsizing and substituting non-human means of production to stay with other corporations who are doing the same thing. A tariff on metals will possibly raise the cost of manufacturing vehicles, but it will be a small increase. To sell more vehicles Ford needs to produce vehicles that people want to buy, and yes at a competitive price, which can be realized by efficiency reorganization, which involves replacing humans with non-human things that do the producing at a lower cost.
 
Unfortunately, with the ownership of corporations being so concentrated and becoming increasingly so, ordinary people are struggling to stay economically afloat and purchasing a vehicle is expensive, requiring consumer credit. Without owning non-human productive corporate capital assets and receiving full earnings payouts, ordinary people have only a job as a means of earning an income. With good-paying jobs becoming more scarce or requiring the applicant to have advanced education, more and more citizens are having to find and take whatever job they can get. Of course in most cases of low-income households, credit becomes less available to buy hight-ticket consumer items that require consumer credit financing, such as vehicles and houses. They need more income. But more income requires them to produce more, and the only way to produce more is to own full dividend paying productive capital assets, not gamble in the artificial, speculative secondary stock exchanges trading in previously owned stock. The stock market could crash at any time but the physical world of production capability would still exist.
 
These challenges are addressed in the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at

 
Also download free and read “Capital Homesteading for Every Citizen” at http://www.cesj.org/wp-content/uploads/2012/05/CapitalHomesteadingForEveryCitizen.pdf.
Gary Reber / About Author
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