Ford is expecting to lose $3 billion in electric vehicle operating profit this year, and the company's current operating costs are $7 billion to $8 billion, higher than any other competitor, which has forced the company to layoff employees, along with other cost-saving measures, Wall Street Journal reports.
The layoffs will impact at least 1,000 salaried employees in North America with white-color jobs in its electric vehicle and software programming departments. Some employees in Ford's gas engine and commercial vehicle divisions will also be axed, according to the journal.
The automaker first notified employees about the upcoming layoffs in an internal meeting on Monday, and managers told affected employees to work from home for the duration of the week.
Ford's mass layoffs are the result of the heavy costs associated with electric vehicle investments, and the automaker's CEO Jim Farley predicts that the company will not see profitability in EVs for at least a few years. Last month, Farley said that "the cost of making an EV might not be equal to that of internal-combustion vehicles until after 2030," according to WSJ.
Automakers have focused on boosting profit margins on the internal combustion side of the business due to electric vehicles not being profitable, for now, analysts say.
This round of layoffs comes in addition to Ford cutting more than 3,000 US positions over the past year. Ford executives have turned to the federal government for funding to produce EV batteries, which other auto manufacturing companies have strongly criticized due to Ford's profitability.
The United States Department of Energy (DOE) said last week that the government would loan $9.2 million in a joint venture with Ford to support the production of electric vehicle batteries across three factories in the US South, the largest commitment in the loan program’s office history.
Shawn Fain, president of the United Auto Workers union, criticized the billion federal loan and insisted that the cash will not benefit Ford's workforce.
"These companies are extremely profitable and will continue to make money hand-over-fist whether they’re selling combustion engines or EVs. Yet the workers get a smaller and smaller piece of the pie," Fain said.
Join and support independent free thinkers!
We’re independent and can’t be cancelled. The establishment media is increasingly dedicated to divisive cancel culture, corporate wokeism, and political correctness, all while covering up corruption from the corridors of power. The need for fact-based journalism and thoughtful analysis has never been greater. When you support The Post Millennial, you support freedom of the press at a time when it's under direct attack. Join the ranks of independent, free thinkers by supporting us today for as little as $1.
Remind me next month