DEARBORN, Mich. (WXYZ) — The 580 job reductions Ford announced this week may be just the beginning of a restructuring the entire auto industry is facing. When it happens, it will no doubt impact metro Detroit as we transition to the electric future, experts say.
This week has been full of headlines that tell the two intersecting stories for Ford.
First came electrifying news Tuesday. Ford revved up excitement as the all-electric F-150 lighting rolled off the assembly line and on to the market Tuesday. The first all-electric truck is sold out for the 2022 model year.
The Lightning announcement, you could say, came before the storm.
Wednesday Ford reported a $3.1 billion net loss for the first quarter. Most of it is because Ford’s investment in Rivian stock plummeted. Facing also the pandemic, the chip shortage and the war in Ukraine creating challenges, Ford announced it will be eliminating 580 jobs.
Ford tells 7 Action News the job reductions are impacting engineers — 230 of them agency and 350 of them salaried positions. It is not saying how many are based in metro Detroit.
“It has to cut costs. Structural costs. One way, the fastest way, is to cut head count,” said John McElroy, the host of the television program "Autoline."
McElroy estimates the cuts will save the company about $100 million.
“One hundred million dollars is a lot of money. And that comes out of the internal combustion side of the business, where it really has to cut costs and reinvest that money on the electrical side,” McElroy said.
McElroy says automakers and auto suppliers will all have to restructure as electric vehicles take up more and market share.
Analysis done by the Economic Policy Institute says by 2030, we could lose up to 75,000 auto jobs in the USA, depending on how many internal combustion vehicles are still being made.
It suggests our nation implement policies that support more electric vehicle power train component manufacturing and domestic car sales to create replacement jobs.
“The real pain is going to be blue collar workers. There are no two ways around it. Electric cars are simpler and easier to make. They are just not going to need as many blue collar workers to make them. On the other side, the technical side jobs are going to go up. We need a lot more software engineers and battery engineers,” McElroy said.