(WJBK) - Ford Motor Company is on the verge of cutting 10 percent of its workforce, according to a report published by The Wall Street Journal Monday night. Thousands of employees across the world could be facing layoffs.
Ford has not confirmed the Wall Street Journal report.
"The cats out of the bag right now. The media is reporting on this happening; there's all kinds of rumors going around. Ford needs to step up on what it's going to do to get those those rumors to go away," says auto analyst John McElroy.
Ten percent of the company's workforce equates to about 20,000 people. A FOX 2 source says that number could be less, but, whatever the figure may be, no doubt the downsizing will be felt here in the Motor City.
"Most of Ford's workforce is in North America; most of it is in Michigan; most of it is in southeast Michigan. So, when you announce that you're going to get rid of 10 percent of your white collar workforce - they haven't announced it but that's what the media is reporting - inevitably, the ax is going to fall here harder than anywhere else," McElroy says. He hosts a weekly program dedicated to the auto industry, so he certainly has a lot of insight.
The goal of the cuts will likely be to boost profits and raise stock prices. Ford profits were down some 35 percent in the first quarter and its stock dropped 17 percent since January.
"What Ford is probably going to do is offer buyouts. It's going to do this more on an attrition basis and, believe me, if Ford is thinking about it - all of them are thinking about doing it," McElroy says.
While Ford has yet to confirm the layoffs, the automaker has said it is focused on reducing costs and becoming as lean and efficienct as possible. This latest reported developement is likely a step towards that. You can bet the world will be watching as the details unfold on this and perhaps other changes down the line.
"I think we are probably going to see some blue collar layoffs or, certainly, plant slow downs. Ford's got something like nine model lines with 90 days of inventory so you would think that they're going to try to get that inventory down," McElroy says.
Ford is expected to speak on their plan sometime this week, but an official press conference has not yet been called.
This is a developing story. Stay with FOX 2 for updates.
You can find the Wall Street Journal's story online here, but you'll need to subscribe or sign in to read the full story.