Ford lays off hundreds of engineers and employees due to high costs of transitioning to electric vehicles.

Ford Motor Co. Announces Job Cuts Amid Transition to Electric Vehicles

Ford Motor Co. is undergoing another round of white-collar job cuts as the company continues to reduce costs during its transition to electric vehicles.

The company confirmed on Tuesday that it was starting to notify several hundred engineers and other salaried employees that their jobs are being eliminated. This comes after around 200 Ford contract employees were let go last week.

Spokesman T.R. Reid stated that while he couldn’t provide an exact number of job cuts this week, they are not nearly as significant as the cuts made last summer when the company let go of 3,000 white-collar workers and another 1,000 contractors, mostly in the U.S. While most of the cuts were in engineering, all business units will see job cuts.

According to CEO Jim Farley, Ford’s workforce lacks the necessary skills for the transition from internal combustion to battery-powered vehicles. This week’s job cuts demonstrate Ford’s commitment to adapting to change more consistently.

“It’s more real time and not kind of big titanic events,” Farley said, adding that the company is also hiring in areas such as software development.

These job cuts come as Ford aims to address a $7 billion cost disadvantage compared to its competitors. The company is also investing over $50 billion by 2026 to develop and build electric vehicles globally.

The Biden administration recently awarded Ford a $9.2 billion conditional loan for building battery factories. Ford plans to manufacture EVs at a rate of 600,000 per year by the end of this year and 2 million per year by 2026.

As part of its reorganization, Ford has divided itself into three business units: Ford Model e for electric vehicles, Ford Blue for vehicles with combustion engines, and Ford Pro for commercial vehicles.

While Ford’s electric vehicle business has incurred losses of $3 billion before taxes in the past two years, company officials expect it to become profitable before taxes by late 2026 with an 8 percent pretax profit margin. On the other hand, its commercial and combustion units remain highly profitable.

In May, Farley stated that there would be no reductions in the number of factory employees or among engineers and other office workers.

The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.

Read More: Ford Axes Hundreds of Engineers, Other Employees as Electric Vehicle Transition Proves Costly

Source: The Western Journal

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