The company will see 500 salaried workers in the U.S. leave involuntarily this week, and 800 total in the U.S. by June, Ford said. By the end of August, Ford projects to see 7,000 voluntary and involuntary separations globally.
However, the letter does not specify how many people in Dearborn or Michigan would be impacted. Employees interviewed by the Free Press have indicated a significant portion would be leaving world headquarters. A Ford spokesman declined to comment.
In the letter to employees, with the subject line “Smart Redesign Update,” Hackett wrote:
“As we enter the final weeks of Smart Redesign in North America, I want to update you on our overall progress. But first, I want to thank you for your focus and dedication … To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work, and cut costs. This required intensive work across multiple layers of our company.”
The letter continues, “We are now entering the final phase of Smart Redesign. Notifications to employees in North America affected by wave four of Smart Redesign will begin tomorrow (May 21). The majority will be completed by May 24.”
He noted that restructuring will continue in Europe, China, South America and elsewhere with hopes of completing the reorganization by the end of August.
“The time and effort from so many of our team members is helping to make us a stronger company, well positioned for the future,” Hackett wrote.
Hackett said when “Smart Redesign” is complete:
“More than 80% of our managers will have healthy spans of control of six or more direct reports, up from 35% before Smart Redesign
“Our average span of control for managers will have increased from five direct reports to more than seven, reducing management bureaucracy by one-third.
“By year end, most of the organization will be structured with nine layers or less, resulting in a flatter and more agile team. At the beginning of the redesign we had up to 14 organizational layers.
“We identified more than 5,000 concrete ideas to change the way we work – identifying new initiatives as well as work that was not value added.
“We created the new Enterprise Product Line Management organization, which will ensure we manage our product lines end-to-end for maximum customer centricity and profitability, as well as our Customer Experience group.
“We also created the International Markets Group, to focus on the customer and ensure these markets receive the attention they need to thrive and grow.
“Each skill team fundamentally redesigned their work. For example, Product Development created a new vehicle architecture and testing team, a new systems engineering and design assurance group, and expanded future investments for in-vehicle infotainment, software, electrification, and other areas. Clearly, cost reduction is a key aspect of Smart Redesign.”
Overall, by the end of the process later in August, Ford will have eliminated about 7,000 salaried positions, or about 10% of its global salaried workforce, Hackett wrote.
“This includes both voluntary and involuntary separations over the past year. Within that total, and consistent with our goal to reduce bureaucracy, we will have reduced management structure by close to 20%,” he said. “This will result in annual savings of about $600 million. We also made significant progress in eliminating bureaucracy, speeding up decision making and driving empowerment as part of this redesign.”
Hackett added, “Ford is a family company and saying goodbye to colleagues is difficult and emotional. We have moved away from past practices in some regions where team members who were separated had to leave immediately with their belongings, instead giving people the choice to stay for a few days to wrap up and say goodbye. We also have a range of resources and services in place to support employees in managing this transition. I hope that you take a moment to thank them personally for their service and commitment to Ford.”
Hackett ends his letter saying he is in “awe” of the skill and dedication of the Ford team.
“I hope you can feel the momentum building as we work together transforming Ford into the world’s most trusted company, designing smart vehicles for a smart world,” he wrote. “Thanks for all you do for Ford.”
And he signed the letter, “Jim.”
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