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Ford reportedly preparing to slash 8,000 jobs to help fund EV transition

USA TODAY logo USA TODAY 7/21/2022 Jamie L. LaReau, Detroit Free Press
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Ford Motor Co. is getting ready to eliminate up to 8,000 jobs in the coming weeks to help fund its push into electric vehicles, according to a news report. 

Bloomberg, citing unnamed sources familiar with the plan, said Wednesday the cuts will come largely in the newly created Ford Blue unit that produces gasoline-powered vehicles, as well as "other salaried operations throughout the company." The plan has reportedly not yet been finalized, so details may change.

Ford CEO Jim Farley set a plan to build 2 million electric vehicles a year by 2026. © AP Ford CEO Jim Farley set a plan to build 2 million electric vehicles a year by 2026.

The news comes on the heels of Michigan giving the automaker a $100 million tax-funded incentive package in June as part of a plan to create new jobs in the state. The Bloomberg report does not mention how many jobs might be cut in Michigan. 

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Ford spokesman Mark Truby told the Detroit Free Press that he could not confirm the Bloomberg report.

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Ford CEO Jim Farley has said he plans to slash $3 billion in costs by 2026 and that he wants to turn Ford Blue into “the profit and cash engine for the entire enterprise.” In March, Farley restructured the automaker to create two businesses: the “Model e” unit to develop EVs and “Ford Blue” to focus on internal combustion engine vehicles such as the popular F-150 pickup, the Mustang and the Bronco SUV.

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Bloomberg reported that the job cuts are expected to hit a variety of operational functions among Ford’s white-collar workforce and they may come in phases, but are likely to begin this summer. The majority of the cuts are expected to be in the U.S. where Ford employs about 31,000 salaried workers.

Ford declined to comment on "speculation" about its business. Spokesman T.R. Reid said in an email to the Free Press, "As we’ve said lots of times, to deliver our Ford+ transformation and lead an exciting and disruptive new era of electric and connected vehicles, we’re reshaping our work and modernizing our organization across all of the automotive business units and the entire company. We’ve laid out clear targets for our cost structure so that we’re lean and fully competitive with the best in the industry."

In March, Farley boosted Ford's spending on EVs to $50 billion, up from $30 billion through 2026. He set a plan to build 2 million EVs a year by 2026. Last year, Ford sold 27,140 EVs.

Ford's crosstown rival, General Motors, is investing $35 billion in EV and self-driving car technology by middecade with the goal to sell one million EVs in the U.S. by that time.

Farley has said workforce reduction is a key to boosting profits, which have eroded on its Mustang Mach-E and other plug-in models because of the automaker's increased costs for commodities and warranties.

“We have too many people,” Farley said at a Wolfe Research auto conference in February. “This management team firmly believes that our ICE and BEV portfolios are under-earning.”

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Contact Jamie L. LaReau at jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: Ford reportedly preparing to slash 8,000 jobs to help fund EV transition

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