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Ford offers underperforming white-collar workers the option of layoffs or performance improvements

Ford offers underperforming white-collar workers the option of layoffs or performance improvements
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Motor Co. is changing its approach to address white-collar workers it deems underperforming, telling managers that some of those workers must choose between layoffs or a performance-enhancement program.

According to an internal email reviewed by The Wall Street Journal and confirmed by a company, the changes in talent management policies are aimed primarily at employees with eight or more years of service who have demonstrated a pattern of underperformance at the company. spokesman.

Those employees have the option to quit instead of enrolling in the improvement plan, which could take four to six weeks, according to the email and the spokeswoman.

As of October, those who choose an upgrade plan instead but fail to upgrade won’t be eligible for any layoffs. 4 emails to all US managers.

A Ford spokesman said the changes are intended to simplify the way managers deal with poor performance and provide an alternative to an improvement plan that can be a stressful period for employees who have made the decision.

The revised policies, which apply to all U.S. salaried employees, went into effect on October 1. 1, according to the email.

As part of the updated policy, managers with underperforming employees for less than eight years can skip the performance improvement plan and move to forced separation with severance, a Ford spokeswoman said. He said that if these workers are dismissed, they can receive some benefits, such as job placement assistance.

Ford has about 30,000 salaried employees in the United States

The U.S. automaker has taken steps to streamline its white-collar workforce in recent months as part of a broader effort to cut costs by about $3 billion annually by 2026. The shift to electric vehicles, a market now dominated by competitors

Tesla Inc.

The Dearborn, Mich., automaker said in August was laying off about 3,000 people Salaried and contract workers in the U.S., Canada and India, a move after company executives signaled to Wall Street that they need to cut staffing levels.

Related Video: Supply chain problems, parts shortages and inflation make vehicles like Ford more expensive to produce. Is this trend here to stay and does this mean cars will become more expensive? WSJ’s George Downs explains. Illustration: George Downs

Ford CEO Jim Farley said the shift to electric vehicles is causing a reassessment of the company’s resources, including staffing levels in some areas.

“We have a lot of people in certain places, there’s no doubt about that. And we have skills that no longer work and jobs that need to be replaced.” Farley said on an earnings call in July.

Earlier this year, Ford reorganized its internal operations to create different divisions. focuses exclusively on electric vehicles.

Ford, like other companies, may face some wear and tear in the near term due to rising interest rates and the expected impact. to have pension payments for those looking to retire.

In a separate email to employees in September, Ford said the rate applied to the lump sum for U.S. salaried workers who choose to retire because of rising interest rates will change starting in December. 1. After that date, interest rates could reduce total lump sum cash by about 20% to 25%, the email said.

A Ford spokeswoman said potential retirees have until the end of November to decide whether they want to retire by the end of December. 1 and cash in their pension before the IRS bracket rates affect their pension calculations.

Across the auto industry, executives are bracing for a potential downturn in business by taking steps to either lay off workers or freeze hiring.

Stellantis

This was announced on Friday by NV, the global parent of Jeep, Chrysler and other car brands offers voluntary purchases U.S. salaried workers as part of restructuring to sharpen focus on new technologies and low-emission vehicles.

The company said in a statement that the buyouts, which began this month, target some white-collar workers with benefits packages that would otherwise be out of reach.

Write to Nora Eckert nora.eckert@wsj.com

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