The North American auto industry could be in for another round of significant job losses, as Ford Motor Co. moves ahead with a US$11-billion restructuring plan that could cut deeper than the recent plant closures at General Motors, an investment banking analyst says.
Ford’s restructuring plan could eliminate as many as 25,000 jobs, including some in the U.S. and Canada, Morgan Stanley analyst Adam Jonas wrote in a recent note to investors.
“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” analyst Adam Jonas wrote in a note to investors.
“But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly [United Automobile Workers] and CAW (sic) workers.”
Jonas appeared to refer to the Canadian Auto Workers, the predecessor to Unifor, which currently represents Canadian auto-sector workers.
Ford recently told employees to expect unspecified job losses under its restructuring plan, which will be largely aimed at addressing its operations in Europe. The company has not indicated how many jobs will be lost.
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Ford CEO Jim Hackett downplayed Jonas’ analysis on Tuesday. He said the company did not provide Morgan Stanley with job numbers, but it will offer an update later in the week.
Canada’s auto industry is still reeling from last month’s announcement that General Motors will close five North American production facilities, including one in Oshawa, Ont. The move is expected to eliminate 2,500 jobs from a sector that currently employs 125,000 people in Canada.
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Ford employs approximately 8,000 Canadians at facilities in Windsor, Ont., and Oakville, Ont. The company says it set a record in November with sales of the Ford Edge, an SUV built in Oakville.
Ford is mulling a partnership with Volkswagen that would bring some of the German automaker’s operations to plants in the U.S., Ford executive chairman Bill Ford Jr. told Reuters on Tuesday.
The company’s restructuring plans are aimed at addressing a 22 per cent dip in its stock price. Ford has said it plans to launch self-driving vehicles for sale in 2021.
Ford earlier this year created a separate unit for its autonomous vehicle operations, which includes a majority stake in self-driving car software company Argo AI.
— With files from Reuters