‘According to people briefed on the plan.’ Ford’s shares have gotten hammered as it struggles with plunging car sales, and in April even with weak truck sales, mired as automakers are in the US ‘car recession.’ At $10.94 at the close on Monday, shares are down 37% from their high in July 2014, when Mark Fields became CEO. Shares hit a new 52-week low on Friday, despite two consecutive years of record earnings. But Ford announced that profits would decline in 2017, and at a ‘strategy session’ last week, Ford’s frustrated directors put the heat on Fields.
After announcing in March that Ford would create 700 jobs in Michigan, more or less an optical illusion as a nod to Trump, it is now time to throw Wall Street a bone. A huge bone.
Ford is considering cutting 10% of its global workforce of around 200,000 employees (about half of them in the US), ‘according to people briefed on the plan,’ cited by the Wall Street Journal.
That’s about 20,000 people, globally. If these cuts, or some of these cuts, hit US workers, there’s going to be some wild tweeting from the White House. But that too shall pass. Because Wall Street should be happy.
This post was published at Wolf Street on May 16, 2017.
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