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American auto giant Ford plans global reduction

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American auto giant Ford plans global reduction
May 17
09:00 2017

Yesterday The Wall Street Journal published the information about the intentions of Ford auto concern to fire about one in ten of its employees.

Such an unpopular measure was provoked by the desire of the company’s management to keep the share prices. At the moment, the global staff consists of about 200 thousand people. Thus, the reduction will affect more than 20 thousand people.

It should be noted that the necessity of this measure is long overdue. The carmaker is going through hard times: the company’s shares (publicly traded on the New York Stock Exchange) have fallen in price by 40% over the past few years. The current year has been declared the Year of cutting costs by 3 billion US dollars by PSG General Manager Mark Fields. This measure should improve the company’s profitability next year despite the lack of sales growth. The capitalization of the company with a more than century-old history is now lower than one of the automakers General Motors and Tesla.

About ten years ago Ford was experiencing difficult times as well. At that time the company was kept alive by successful restructuring, which was to sell two divisions of Aston Martin and Volvo Cars and the launch of a new “One Ford” strategy, (its essence was to divert to manufacturing products unified for all markets without geographical location).

 

The material was prepared with the participation of  Vladimir Haritonov,
a leading analyst of the brokerage company CTTrade

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