The industry gasped when Ford announced earlier this year it would shed every single passenger car from its lineup, save for the Mustang. Ford also had an $11 billion restructuring plan in the works. Ford appeared one step ahead of its rivals.
Until GM dropped its own bombshell.
The automaker said the cuts it announced this past Monday will help open up $6 billion in savings in the next few years. The cuts include the end of production for numerous passenger cars (Chevrolet Impala, Cruze, Volt, Buick LaCrosse, and Cadillac CT6), and a 25 percent reduction to its corporate workforce. Thousands of production workers will be laid off as GM moves to idle four U.S. plants, too.
Ford, meanwhile, hasn’t announced much with reference to its reorganization. Jobs cuts at Ford have also been expected, but CEO Jim Hackett hasn’t delivered an announcement thus far. While the GM cuts sent its stock prices up by 5 percent, Ford shares reached their lowest point since 2009 this past October. Company bonds are quickly approaching junk bond status, too.
Both automakers have moved to transform their traditional businesses as the market moves away from sedans, into more utility vehicles, and combs through plans to introduce self-driving car technology and electric vehicles. GM has, arguably, been ahead of Ford in these regards, too. GM plans for 20 new electric cars by 2023 and has its Cruise Automation subsidiary to handle autonomous car development. Ford has handled all of these projects in-house with side investments. Its electrification roadmap is also fuzzier.
Perhaps news of Ford’s restructuring has dropped because of a potential major deal in the works. Ford has reportedly cozied up to Germany’s VW in recent months as the two explore synergies. What began as a potential partnership on commercial trucks may expand into a full-blown tie-up to save costs in budding segments such as EVs and automation.