Ford has announced a significant reduction in its workforce dedicated to the production of the F-150 Lightning electric vehicle (EV), cutting it by approximately two-thirds.
This decision comes as the automotive giant aims to realign its electric vehicle production efforts with the current market demand and push towards achieving profitability in its EV sector. The Detroit Free Press reported that Ford confirmed this move on Wednesday, March 27th, stating it would affect workers at the Rouge Electric Vehicle Center (REV-C).
Ford’s Plan for Affected Employees
The adjustment will see around 700 production employees retained on-site, while the remaining 1,400 employees will be presented with options to transfer to Ford’s Michigan Assembly Plant in Wayne, where the Bronco and Ranger models are manufactured, or to accept a $50,000 retirement package, a result of the last year’s intense union negotiations.
The workforce reduction is part of Ford’s broader strategy to adapt to the slower-than-expected sales. Despite this shift, Ford reassures that these staffing changes will not lead to outright job losses, as affected employees will be offered reassignment or retirement options.
The Michigan Assembly Plant is also set to receive a third shift, indicating Ford’s continued reliance on its gas vehicle sales to support its financial stability amidst the EV market’s unpredictability.
Production Adjustments
The F-150 Lightning’s production was initially reduced late the previous year as Ford evaluated the optimal and strategic output level for its EV pickup.
Furthermore, in February, Ford decided to pause shipments of the F-150 Lightning to prioritize the output and deliveries of its gas-powered F-150, with the new EV units being withheld for a quality review.
The Challenges of EV Adoption
According to Todd Dunn, President of UAW Local 862 in Louisville, Kentucky, battery technology and its limitations have been a significant factor in the reduced purchasing rate of the EV.
Dunn highlighted the initial intentions to produce over 180,000 units of the F-150 Lightning, which has since been adjusted to about 55,000 units. This adjustment reflects challenges such as battery charge range and the integration of new technology already being implemented in overseas markets.
John Lawler, Ford’s CFO, voiced concerns at a recent conference about the mismatch between capacity and demand within the EV sector. Acknowledging that the industry’s expectations for EV growth were overly optimistic, Lawler emphasized the need for Ford to implement stricter cost controls, especially within its EV division. This includes making the Ford Model e division financially independent, relying less on profits from traditional internal combustion engine vehicles and commercial units.
The reduction in the F-150 Lightning’s production workforce is seen as a measure to “right-size” the company’s production capacity, ensuring that supply more accurately meets demand. Despite the adjustments, Ford is committed to not laying off workers, offering them alternative opportunities within the company.
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