Normally, layoffs are welcome news to shareholders. And with good reason; they mean huge cost savings and often serve as a sign that the business is prepared to do what it takes to survive. However, at legacy automaker Ford Motor Co. (F), that did not prove to be the case. Ford bucked tradition once again, and lost nearly 3.5% in Wednesday trading after word of 4,000 European job cuts emerged.
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The news came after major rival Stellantis (STLA) revealed that it had no plans to cut jobs in Europe, at least, not in Italy. But Ford would do something completely different, and is cutting 4,000 jobs total. Ford’s cuts will target mainly Germany and the United Kingdom, and are mostly being done to achieve cost savings.
The cuts will take place over the next several years, running into 2027. About 2,900 jobs will be lost in Germany and 800 jobs in the U.K. That cuts Ford’s European workforce down 14%. And with German labor costs the highest in Europe, the end result is bad news for the German labor market.
The Detroit Deck Shuffle
It will not be just Europe that sees some changes in the workforce at Ford. The automaker is also reassigning some of its Wayne, Michigan workers to other plants. No layoffs, but rather simple reassignments.
The Wayne plant is known for making the Bronco SUV, and with Bronco sales down 10% this year, Ford is moving some labor off the Wayne line. Now, those workers will be sent to the Dearborn Engine Plant, or to the Monroe Parts Depot starting in early 2025. About 400 workers will be impacted by the change.
Is Ford Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on five Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 12.13% rally in its share price over the past year, the average F price target of $11.75 per share implies 10.28% upside potential.
