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Ford Cutting Jobs in China

China sales fell 2.8% in 2018.

by on Feb.28, 2019

While Ford's Mustang is still selling well, the rest of its line-up is not, contributing to a double-digit decline.

Ford Motor Co. is moving to slash thousands of jobs in China.

Since last fall, Ford has been promising to put its house in order and analysts have speculated that the restructuring could result in the elimination of 15,000 jobs worldwide.

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Now it appears that a large piece of the restructuring will involve cuts to the company’s operations in China where Ford lost as much as $1 billion in 2018, according to the company’s financial statements.

Ford’s joint venture with China Changan Automobile Group is canceling its contract with some agencies supplying it with workers, as carmakers struggle to cope with slumping sales in China, according to Reuters.

(Ford’s future relies on its manufacturing prowess. Click Here for the story.)

Ford's new entry-level sport-utility, the Territory, is the first of a wave of 50 new or redesigned products for China.

The New York Times reported earlier that the Ford-Changan joint venture has “quietly begun” dismissing thousands of its 20,000 workers in the world’s second-largest economy. Ford did not comment on how many of its workers were being supplied by the agencies.

China’s car sales fell 2.8% in 2018, according to China’s Association of Automobile Manufacturers (CAAM), marking the first contraction since the 1990s. Slowing economic growth as well as the fallout of trade frictions with the United States have hurt demand.

Ford sales, though, dropped 36.9% last year in China, due to lack of new and significantly redesigned models, especially SUVs, for the market.

(Click Here for more about Ford’s Hackett wanting to double profits.)

The problems in China were exacerbated by the fact Ford had difficulty of finding an executive to run the company’s Chinese ventures and by tariffs that made it difficult to for Ford to sell high-margin, American-made vehicles such as the Ford Raptor and Ford Mustang to customers in China.

The newest Focus model debuting in China last year didn't help turn around sales.

Jim Farley, Ford president of global marketing, has said the company has a plan to revamp its business in China by introducing new products and re-orienting its supply chain to make use or more Chinese suppliers.

A company executive told Reuters last year it was unlikely that Ford’s sales will regain momentum in China until later in 2019 when the first new vehicle models arrive in showrooms in large enough numbers.

(Farley says Ford following a different game plan for EVs. Click Here for the story.)

Meanwhile Ford has moved to close a truck plant in Brazil and seems to be waiting out the turmoil around Brexit to finish the restructuring in Europe even as it seems ready to stand pat in North America.

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