Ford Motor Co. is preparing to lay off 8,000 employees in the upcoming weeks to help finance its drive into electric vehicles.

The announcement follows Michigan's June awarding of a $100 million tax-funded incentive package to the manufacturer (per Detroit Free Press) as part of a strategy to generate new jobs in the state.

Bloomberg, citing anonymous sources familiar with the proposal, the reductions will primarily affect the newly established Ford Blue unit, which manufactures gasoline-powered cars, and "other salaried operations throughout the company."

The specifics of this arrangement have not yet been decided and may alter in the upcoming weeks. However, if it proceeds as planned, it will probably happen in stages this summer.

According to Fortune, Ford CEO Jim Farley revealed that he is increasing EV investment to $50 billion and establishing a strategy to create 2 million EVs per year by 2026.

NPR added that Farley dividied the company into to carry out his plans. One is Ford Blue, responsible for creating ICE vehicles, and the second is Ford E, which is focused on creating EVs, such as the Ford Mach E and the F150 Lightning.

Regarding the Model E's EV activities, Farley said he decided to divide the business into two because he wants its Blue section to be "a profit and cash engine for the entire enterprise."

"The funding for that $50 billion, it's all based on our core automotive operations," Farley said in a March interview with Bloomberg Television (via CNBC TV 18). "That's why we created a separate group called Ford Blue because we need them to be more profitable to fund this."

Farley thinks laying off employees is one way for the Blue division to make money and profit, nonetheless. At a Wolfe Research car conference in February, he complained that the corporation employs "too many people."

Farley has a solid reason to think so, after all. Given the 39 percent decline in share price, Ford's management team "firmly believes" that its ICE and battery electric car portfolios are performing worse than anticipated.

Ford declined to comment on the information from the sources since it was concentrating on "reshaping" the business to benefit from the rise of EVs.

Ford's leadership has set clear goals to reduce the organization's cost structure to be streamlined and competitive enough to compete against the finest in the automotive sector, Ford Chief Communications Officer Mark Truby told Bloomberg.

The Ford Motor Company logo is seen July
The Ford Motor Company logo is seen July 20, 2008 at a dealership in Hudson, Wisconsin. KAREN BLEIER/AFP via Getty Images

© 2024 Latin Times. All rights reserved. Do not reproduce without permission.