Ford is facing huge layoffs in the wake of steel and aluminum tariffs levied against China.
It turns out that American carmaker Ford might be the first victim in the heated trade war between the United States and China. Thanks to tariffs levied on steel and aluminum imports to the far-east nation, Ford is expected to lose $1 billion in profits this year and may need to cut up to 20,000 jobs.
According to Bloomberg, Ford alerted their salaried workforce (which numbers at roughly 70,000) that job cuts are likely coming as part of the company’s restructuring plans.
“Yesterday, we told our employees that we were in the early stages of an organizational redesign of the global salaried workforce,” said Ford spokesperson Karen Hampton. The cuts will be aimed at producing a “wider, flatter organization that is really designed for speed. Inevitably, we expect that to result in some reductions, but at this point there’s not a target.”
Ford has been struggling to increase their profitability per vehicle in recent years. Earlier in 2018, Ford announced that they would actually pull out of the car market in North America citing razor-thin profits on sedans and small cars. Instead, the company would refocus their efforts on producing SUVs, trucks, and the Mustang sports car.
There were also plans to build a crossover version of the Ford Focus called the Focus Active. Originally Ford planned to build the Focus Active in Mexico, but when the White House threatened tariffs against their southern neighbor, Ford execs instead decided to relocate that production to China. Once the Chinese tariffs were instated, it spelled the end of the Focus Active.
For the first time in a decade, Ford has fallen behind rivals GM, Toyota, and even Fiat Chrysler in last month’s US sales. This has been seen by many as a red flag for the company, and have spurred Ford to faster action during its restructuring. Ford is attempting to find $25 billion in efficiencies, with a large cut to its white-collar workforce being inevitable.