Ford requires low performers to "retire or complete improvement programs"

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] According to the Wall Street Journal (WSJ) on the 31st (local time), U.S. automaker Ford is requiring some low-performing employees to either accept severance pay and leave the company or participate in a special program aimed at performance improvement.

According to an internal company email obtained by WSJ, Ford has been implementing this policy since the 1st of this month, targeting office workers in the U.S. who have more than 8 years of service but show patterns of declining performance.

The performance improvement program takes 4 to 6 weeks. However, employees who choose to complete the improvement program but still perform poorly will not be eligible for severance pay. Employees with less than 8 years of service are subject to involuntary layoffs without exception. A Ford spokesperson confirmed, "The management's approach to dealing with poor performance has been simplified," adding, "(Low-performing employees with less than 8 years of service) can receive some benefits such as job placement support upon retirement."

Ford has approximately 30,000 full-time employees in the U.S. This measure was disclosed amid Ford's intensified cost-cutting efforts while expanding investments in electric vehicles. Earlier in March, Ford announced it would split the company into electric vehicle and internal combustion engine divisions and reduce costs by $3 billion per month until 2026. Additionally, in August, Ford announced layoffs of about 3,000 employees in the U.S., Canada, and India. This action came shortly after CEO Jim Farley pointed out in an earnings report that "certain areas have too many personnel."

WSJ noted, "Across the automotive industry, there is a trend of reducing staff or freezing hiring in preparation for a potential economic downturn," and reported that Stellantis, the parent company of Jeep and Chrysler, has also recently decided to implement voluntary early retirement for full-time employees.

Meanwhile, on the afternoon of the same day, Ford's stock price on the New York Stock Exchange was trading about 1.36% higher than the previous close.

This content was produced with the assistance of AI translation services.