Auto giant Ford Motor Co. (NYSE:F) reportedly intends to lay off hundreds of salaried workers, with a primary focus on engineers, in the United States and Canada this week. The key reason behind this action is to enhance profitability and reduce costs as the company moves towards electric vehicles (EVs).
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Additionally, the reductions will be made across all three divisions, which include EVs, traditional internal combustion engine models, and commercial vehicles.
Prior to these expected layoffs, Ford fired 3,000 white-collar and contract employees in August 2022. Following that, in early 2023, the company announced plans to reduce its European workforce by 3,800 employees. These measures were taken as part of its ongoing efforts to optimize operations and streamline headcount in response to changing market conditions.
EV Powerhouse
Importantly, Ford is in the midst of a transition phase to position itself as a major participant in the rapidly expanding EV market. This strategic shift involves substantial investments in manufacturing plants to facilitate the production of electric vehicles.
Additionally, the company is actively forming strategic partnerships to bolster its EV charging infrastructure. Last week, the US Department of Energy announced its plan to provide a loan of $9.2 billion to Ford’s joint venture with South Korean company SK On. This funding aims to assist in the establishment of three battery plants within the United States. These initiatives underscore Ford’s commitment to establishing a strong presence in the EV market.
Is Ford a Buy or Sell Stock?
Turning to Wall Street, Ford has a Moderate Buy consensus rating based on five Buys, four Holds, and one Sell assigned in the past three months. The average Ford stock price target of $14.88 implies 5.46% upside potential.
Notably, analyst Philippe Houchois from Jefferies is the most accurate and profitable analyst for Ford. Copying the analyst’s trades on this stock and holding each position for one year has resulted in 71% of transactions generating a profit, with an average return of 42.04% per trade. Interestingly, Green upgraded the stock’s rating to Buy about 28 days ago.
