Ford cutting around 700 jobs at its small-car factory in Southeast Michigan
Ford Motor Co. has decided to cut around 700 jobs at its small-car factory in southeast Michigan. This factory was the auto maker's first major US manufacturing layoff since 2009 as Americans shunned smaller vehicles amid low gasoline prices.
The workers were notified on Thursday, regarding the workforce cuts at the plant, which builds Ford's compact Focus, as well as electric and hybrid models. By the end of the June, the layoffs will begin and the Dearborn, Mich., company said that it could reassign many of the employees.
The action has taken place months before Ford executives kicked off labor negotiations with the United Auto Workers union.
As UAW officials will push for more compensation, the pain in the US small-car market is a reminder of the cyclical nature of the American auto industry even during the best of times. Such a pain was also faced by General Motors Co. and Fiat Chrysler Automobiles NV.
Auto makers have been scrambling to build as many of profitable vehicles as they can, as the buyers, while taking advantage of low gas prices have started shifting toward larger, roomier trucks and sport-utility vehicles that usually consume more gasoline. For example, GM has proposed to add workers at an SUV plant in Texas.
In the beginning of this year, Ford said that it would be hiring 1,500 workers at its truck factories in southeast Michigan and near Kansas City, Mo. for boosting production of its F-series pickup trucks.
Ford-UAW President Jimmy Settles, said, “While today's announcement of a shift reduction at our Michigan Assembly Plant is unfortunate, it is not completely unexpected. We are reminded from time to time that our industry is cyclical and volatile to market conditions’.
In the first quarter of this year, small vehicle sales have dropped to approximately 18.5% of US retail car sales, in comparison to 20% during the same period last year. The result has come up as the category's lowest first-quarter retail share of sales since 2009.