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

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Motor Co is changing its approach to addressing white-collar workers deemed to be underperforming, telling managers that some of those workers will have to 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.

According to an Oct. 4 email to all U.S. managers, those who choose an upgrade plan but fail to upgrade will not be eligible for any severance.

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, took effect Oct. 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 cars, a market now dominated by rival Tesla Inc.

In August, the Dearborn, Mich., automaker said it was cutting about 3,000 salaried and contract workers in the U.S., Canada and India, a move that came after executives told Wall Street for months that the job cuts were needed.

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 are no longer working and we have jobs that need to be replaced,” Mr. Farley said on an earnings call in July.

Earlier this year, Ford reorganized its internal operations to create different divisions, including one focused solely on electric cars.

Ford, like other companies, may face some near-term attrition due to rising interest rates and the expected impact on pension payments for those looking to retire.

Ford said in a separate email to employees in September that the rate applied to the lump sum for U.S. salaried workers who choose to retire because of rising interest rates will change as of Dec. 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 Dec. 1 and cash out their pensions before the IRS segment 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 NV, the global parent of Jeep, Chrysler and other auto brands, said on Friday it is offering voluntary buyouts to salaried workers in the United States as part of a restructuring to 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.

Email Nora Eckert at

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