Tramp Trades Blows, Con't

Trump tariffs are now starting to bite on automakers and the first of many to announce major layoffs is Ford, announcing that some 24,000 American auto jobs are going away.

Ford will be making cuts to its 70,000-strong white-collar workforce in a move it calls a "redesign" of its staff to be leaner, have fewer layers, and offer more decision-making power to employees, the company announced.

The number of jobs that will be axed is unknown at this point.

“A lot of the (reorganization) is about making different choices about strategy,” Chief Financial Officer Bob Shanks told NBC News, adding that the goal isn’t just to slash spending but to improve the “fitness” of the company.

However, a recent report by Morgan Stanley estimates "a global headcount reduction of approximately 12 percent,” or 24,000 of Ford's 202,000 workers worldwide. "Such a magnitude of reduction is not without precedent in the auto industry,” analysts wrote in the investment note.

The decision is part of Ford's $25.5 billion reorganization plan, which includes slashing $6 billion in improved capital efficiencies. Ford CEO Jim Hackett, who cut more than 12,000 jobs as head of office furniture maker Steelcase, had been expected to make cutbacks even sooner, according to some observers. Hackett took over from Ford veteran Mark Fields when he was ousted from the company in May 2017.

Ford is lagging behind the competition, selling an anemic 32.8 vehicles per employee. Long-time rival GM puts out 52.7 vehicles per employee. But it's unclear exactly how improved efficiencies will impact potential job cuts.

Ford has already warned that President Donald Trump's auto tariffs have impacted the company to the tune of $1 billion, and the president’s trade policies threaten to play havoc with Ford’s ongoing reorganization, Shanks told NBC News.

Trump and Ford have been squaring off since well before the 2016 election, when then-presidential candidate originally threatened to impose hefty tariffs on vehicles Ford intended to start importing from a factory in Mexico. The carmaker eventually scrubbed that plan, but rather than return production to the U.S. it decided to move it to China.

Earlier this year, Ford said it would all but pull out of the U.S. passenger car market, citing the rapid shift in demand from sedans, coupes, and wagons to SUVs, CUVs and pickups. It was going to eliminate the conventional Focus models in favor of a crossover version, the Active. Now, with that model dropped, the still-popular Mustang will be the only remaining passenger car model in its line-up, with Ford relying in the future almost entirely on light trucks — such as the F-Series pickups that last year generated nearly all of its profits.

Ironically, Ford actually may have to cut production of the Mustang and some other models — in the process, potentially reducing U.S. jobs — as a result of the tariffs China has enacted on American-made vehicles in a tit-for-tat trade war. The Mustang had been one of the most popular U.S. vehicles sold in that country. 

Expect more "reorganizations" from automakers in the months ahead.  The way the housing and financial markets are right now, it won't take much to push them over the edge into another 2008-style collapse and another deep recession.

And this time we won't be getting out of it nearly as well.