Back in March, Ford announced its Ford+ strategy, splitting between the conventional Ford Blue and the electric Ford Model e. The division, beyond the aesthetic, supposes that there are two very different lines of business. One, Ford Blue, is related to internal combustion vehicles, whether they are for daily use, recreational or special, and does not include industrial vehicles. On the other hand, the Ford Model e focused on electric vehicles.
Both business branches are still part of the Ford Motor Company, without dividing it by companies, but we will begin to see the consequences of the division. Let’s start with this obvious: Ford Model e will need more employees over time, but fewer than Ford Blue needs for the same volume of vehicles. On the other hand, Ford is starting to have an excess of workers, a figure that could reach 8,000.
In the United States alone, 31,000 people are working in its factories, so the cutback would be significant. The savings in labor costs would be related to unlocking financial resources that should be invested in new electric propulsion products. This is what an analyst explained to Bloomberg Finance, after learning of an internal “tip”:
At the moment it is not official information from Ford, and when it is, it will be dressed with words like “transformation”, “opportunity”, “changing environment” and other euphemisms when it comes to laying off thousands of people. After all, they are maneuvers that are not without pain for a company, especially when these dismissals cost money: early retirement, compensation, relocation, etc.
Ford wants to make money with both divisions, so costs have to be adjusted, Jim Farley had talked about saving 3,000 million dollars in 2026. Everything that is earned with Ford Blue can be reinvested in Ford e, and in fact, it is the objective. The layoffs could begin this summer, according to the reserved attribution source, and will be mainly concentrated in the United States.
It will not be the first time that a giant like Ford has had to make adjustments to put its accounts in order. It already happened, for example, when Henry Ford II took control of the company in 1945. With good management, money was made again in a very abundant way in 10 years, and having an adjusted cost structure is good for any company, be it Ford, Tesla, or Rivian. The three companies are going to have to do without people.
As we can see in this corporate video from March, “Ford is transforming its global automotive business to scale electric vehicles, strengthen operations and unlock value. ” That does not imply abandoning combustion in a rush. Moreover, Jim Farley himself explains in the video “we are going to continue investing in internal combustion engines”. Why? For Ford Blue to continue making cash for Ford Model e, it’s that simple.