U.S. automaker Ford has launched restructuring efforts, including workforce reductions, as losses grow due to massive spending on the transition to electric vehicles.
On the 26th (local time), Bloomberg News reported, citing sources, that Ford will begin layoffs targeting workers in the United States this week. The layoffs could affect hundreds of engineering employees in the U.S. and are expected to be announced between the 27th and 28th, according to sources.
A Ford spokesperson stated, "We plan to reduce engineering staff across all three divisions: electric vehicles, internal combustion engine vehicles, and commercial vehicles." However, the spokesperson did not specify the number of employees to be laid off in this round of cuts.
Foreign media reported that Ford, which has been pursuing cost-cutting measures through workforce reductions in domestic and overseas divisions last year and earlier this year to improve management efficiency amid the electric vehicle transition, is now undertaking additional layoffs. Previously, Ford laid off 3,000 employees in August last year and reduced 3,800 employees in Europe earlier this year.
In March, Ford announced a reorganization into three divisions: the electric vehicle division 'Ford Model e,' the internal combustion engine division 'Ford Blue,' and the commercial vehicle division 'Ford Pro,' targeting government agencies and corporate customers. Bloomberg assessed that this move was driven by investor pressure demanding new investments through the spin-off of the electric vehicle division and a reevaluation of the electric vehicle business's value.
Ford expects a $3 billion loss this year due to the electric vehicle transition. The company aims to produce 2 million electric vehicles annually by 2026, with the electric vehicle division expected to turn profitable three years from now. Jim Farley, Ford's CEO, said, "Our goal is to achieve an 8% return, excluding interest and taxes, in the electric vehicle business by the end of 2026." Ford plans to invest a total of $50 billion in the electric vehicle transition by 2026, funneling all profits from the internal combustion engine division into the electric vehicle business.
Ford is also strengthening its supply chain through BlueOvalSK, a joint venture with SK On, a subsidiary of its Korean battery partner SK Innovation, each holding a 50% stake. Ford plans to build three battery plants in the U.S., including the Kentucky 1 and 2 plants and Tennessee, through BlueOvalSK. Last week, the two companies received conditional approval for a $9.2 billion policy loan from the U.S. Department of Energy (DOE) to establish these North American battery plants.
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