Ford CEO Jim Farley has said for months that he believed the Dearborn, Mich.-based automaker would it had too many people and that it didn’t have enough of the workforce with the skills required as the auto industry turns to electric vehicles and digital services. “We are eliminating work as well as reorganizing and streamlining operations across the business. You will hear more details from your business area leaders later this week,” Farley and Ford President Bill Ford wrote in a public e-mail. Sign up now for FREE unlimited access to Reuters.com Register Ford shares fell 4.8% in midday trading amid a broader decline on Wall Street. Like other established automakers, Ford has a workforce largely recruited to support a range of traditional combustion technology products. Going forward, Farley has planned a strategy for Ford to develop a wide range of electric vehicles. Like Tesla, Ford wants to generate more revenue through services that depend on digital software and connectivity. Tesla’s pre-tax margins have outpaced Ford’s this year, and Farley has been blunt about the need to cut costs. The wheel of a 2018 Ford Focus is seen at the launch of the new model in London, Britain, April 10, 2018. REUTERS/Hannah McKay In Monday’s email to staff, Farley and Ford said the company’s cost structure “is uncompetitive against traditional and new competitors.” Rising prices for batteries, raw materials and shipping are putting additional pressure on Ford and other automakers. But Ford has stuck to its full-year profit forecast despite $3 billion in higher costs due to inflation. Ford has begun to separate its businesses into electric, internal combustion engine and commercial vehicles. Farley said in July “there will be cost reduction” in the burning operations. However, Ford said on Monday that the staff cuts will affect all parts of the company. Rival General Motors Co ( GM.N ) in late 2018 moved to cut 14,000 jobs as it prepared to accelerate its electric vehicle strategy. The North American operations of Ford, GM and Stellantis will face a new labor challenge next year as they begin contract negotiations with the United Auto Workers union, which represents employees at the U.S. automaker’s Detroit plant. . UAW leaders have expressed concern that electric vehicles will mean fewer manufacturing jobs and more scattered jobs in non-union battery and EV hardware factories. Sign up now for FREE unlimited access to Reuters.com Register Edited by Bernadette Baum Our Standards: The Thomson Reuters Trust Principles.
