Ford Motor Co. is set to lay off at least 1,000 employees in North America less than a week after the auto titan got a multibillion-dollar loan from the Biden administration to invest in its electric vehicle business, The Wall Street Journal reported Tuesday.
Salaried employees began being internally notified of the cuts Monday, with a spokesman confirming the cuts to the WSJ Tuesday and saying that the company is focused on engineers in a bid to save money across all business units. On June 22, Ford and business partner SK On, a Korean battery maker, received a $9.2 billion loan from the Biden administration to construct a trio of electric vehicles factories in the U.S. south.
The cut to Ford’s roughly 28,000 strong workforce is the third in a series of mass layoffs that began with a 3,000 person cut to U.S. jobs last summer as the company looks to blunt the costs of its massive investment in electric vehicles, the WSJ reported. Ford cut an additional 3,800 jobs in Europe in early 2023 as a cost cutting measure to support its electric vehicle pivot after missing its earnings expectations by $1.1 billion in the fourth quarter of 2022.
In the news: Biden Admin Gives ‘Conditional’ $9 Billion Loan To Ford, Foreign Company For EV Plants
Ford’s electric vehicle division lost $722 million in the first three months of 2023, costing the company more than $60,000 per car sold. The company’s electric vehicle division is on track for roughly $3 billion in yearly losses, but nonetheless projects that it will begin turning a profit next year.
Ford has also cited the annual costs of its internal-combustion-engine divisions as too high compared to rivals, making it difficult to cover the billions in losses set to be accrued by the company’s electric vehicle division, the WSJ reported. The company is also preparing for negotiations with the United Auto Workers union, which represents its hourly factory workers, in which the union is expected to be particularly aggressive about securing benefits for workers.
“These companies are extremely profitable and will continue to make money hand-over-fist whether they’re selling combustion engines or EVs,” said UAW President Shawn Fain, according to the WSJ. “Yet the workers get a smaller and smaller piece of the pie.”
Following Ford’s difficult first quarter, Heritage Foundation economist E.J. Antoni told the Daily Caller News Foundation that Ford’s decision to go “all-in” on electric vehicles was a “tremendous risk” that would require help from the Biden administration.
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