The tariffs have eaten $1 billion in profit, and reports now say over 20,000 jobs could be threatened.
To say the current political climate in the United States is tense is something of an understatement. There’s been plenty of back-and-forth talk about the trade war between China and the U.S., but now Ford seems to be pressing the point further that President Trump’s tariffs are a driving force behind the trouble. And it could lead to massive layoffs at the company.
A couple weeks ago we reported that Ford CEO Jim Hackett was expecting the company to lose $1 billion in profits because of the metal tariffs levied on steel and aluminum imports from China. NBC News reports the company will also make significant cuts to its white-collar workforce, with another report from Morgan Stanley suggesting those layoffs could total 24,000. That would constitute approximately 12 percent of Ford’s global workforce.
It’s all part of a biblical reorganization plan underway at the Blue Oval that’s designed to cut costs, shift investments into fresh tech, and basically try to get the company making money again. The tariffs set against China by the Trump Administration don’t appear to be helping on that front, not to mention the retaliatory tariffs China dropped on U.S. products coming into China.
This isn’t the first time some friction has been observed between Ford and Trump. The company did an about-face on shifting Focus production to Mexico when the president threatened big tariffs there as well. The work instead went to China, where Ford had planned to build and import the Focus Active – a vehicle the company has since dropped from its U.S. lineup because it's no longer is financially viable.
Of course, Ford also made serious waves when it announced all sedan and passenger car models would be cut from its North American lineup, save for the Mustang. The automaker pledged to focus on SUVs, crossovers, and pickup trucks – all of which continue to be strong sellers in the U.S. market. Still, there’s been no shortage of criticism against the company for all but abandoning a segment where it sold upwards of a half a million vehicles in 2017.
As a result of all this, Ford stock has dropped below $9 for the first time in several years. With the rumors of mass layoffs now spreading, it appears things will get worse for the automaker before they get better.