Ford trims its workforce as it prepares for the transition to electric vehicles
Will the shift to EVs lead to substantial job losses in the automotive industries? EVs are simpler to assemble than legacy vehicles, and key components that support whole sub-industries, such as engines, transmissions and exhaust systems, will no longer be necessary, so a shrinking demand for labor would appear to be an inconvenient truth.
Above: Ford's F-150 Lightning Units. Photo: Ford
The latest news from Ford seems to bear this out—the automaker has announced that it will cut a total of 3,000 salaried and contract jobs, mostly in North America and India. (Ford had an estimated 186,000 global employees as of 2020.)
Reuters reports that Ford Chief Executive Jim Farley has been saying for some time that the company has too many people, and that not enough of its workforce had the skills required for the transition to EVs and digital services.
“We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” Farley and Ford Chairman Bill Ford wrote in a recent joint email to employees. “You will hear more specifics from the leaders of your area of the business later this week.”
Farley and Ford also wrote that the company’s cost structure “is uncompetitive versus traditional and new competitors.” This echoes language used by former VW CEO Herbert Diess some months ago, when he noted that Tesla’s cost to assemble a Model 3 at its German Gigafactory was a fraction of what it cost VW to produce an ID.3. (Hopefully Mr. Farley will not also meet the fate Mr. Diess suffered for speaking truth to power.)