Ford to lay off workers as it focuses on electric vehicles

https://www.cnn.com/2023/06/27/business/ford-layoffs/index.html

by sizzle • 3 years ago

55 111 3 years ago

They're laying off workers whose skillsets are specific to making vehicles with combustion engines and hiring workers specific to making vehicles with electric motors.

criddell• 3 years ago

I wonder how the switch to electric is going to impact Ford dealers? From what I've read they need to (re)train their mechanics and buy a bunch of new equipment and then also deal with the fact that electric vehicles require less maintenance.

JimtheCoder2• 3 years ago

Well, I'm sure all of those massive dealer markups from the pandemic and ensuing vehicle shortage needed to go somewhere, right?

toomuchtodo3• 3 years ago

https://electrek.co/2023/01/27/ford-considering-changes-ev-d...

https://cleantechnica.com/2023/03/22/some-ford-dealers-withd...

https://insideevs.com/news/610114/ford-modele-dealership-rul...

burnished2• 3 years ago

Well, their primary income seems to come from deceiving people, I'm sure they'll either invent new forms of 'maintenance' work or grossly exaggerate the required frequency of some other task.

Mizoguchi• 3 years ago

Dealers will slowly fade away as online car shopping becomes more common. Volvo for example is aiming at 2030 as the year they turn 100% online. It's reasonable to assume all other car makers will do the same. There's absolutely no reason to buy from a dealer in today's world, that's like when in the 80s and early 90s you needed a middleman to buy a computer.

m4633• 3 years ago

I keep on reading that electric vehicles require less maintenance, but they still require some maintenance, and lots of things continue to break.

how much maintenance does a honda ice car really require? Most of them run flawlessly for years and years, almost without opening the hood at all.

I wonder how the numbers break down?

grugagag• 3 years ago

Maybe the whole dealership ‘model’ is to change too?

stcroixx2• 3 years ago

In my circles, dealers would always be the absolute last resort option for having any maintenance done due to their reputation of inflating prices and doing crappy work. Not sure if EV manufacturers are attempting to force consumers to have all their work done by dealers. If so, I’ll keep waiting.

cityofdelusion• 3 years ago

I'm not sure much changes. High voltage systems are fairly complex and basically impossible to work on at home in a safe manner. This will direct pretty much all repairs that require disabling the high voltage system to mechanics / dealerships. We have a living example of this sort of transition with GM and their Volt / Bolt. Mechanics working on EVs today have be specially trained on high voltage procedures, which are fairly cumbersome in the shop to perform. Even things that seem simple, like the heat pump, end up with a fair amount of complexity due to stuff like special procedures, special oils, more valves with addition of a battery loop, etc.

Dealerships do lose the oil change up-sell loop, but my gut feeling is they can make up the cost with big margins on high-voltage repairs. Check out the workshop service manuals for some existing EVs today -- its staggering how much more complex a battery cell replacement is compared to say, an ICE engine swap. Dealer prices on these two procedures are priced accordingly, with procedures that involve HV components regularly costing more than the depreciated value of the EV itself! The Toyota Prius seems to be the first and last model with any kind of easy repair kept in mind for high-voltage components on cars.

JimtheCoder2• 3 years ago

Sometimes, I wish headlines would be a bit more specific.

"Workers" to me implies assembly line workers, whereas the actual layoffs are mostly engineers. I have never really heard anyone call engineers, "Workers"...

lolinder• 3 years ago

Google parent to lay off 12,000 workers

https://nypost.com/2023/01/20/google-parent-alphabet-to-lay-...

Microsoft laid off another 689 workers from its Seattle-area offices Monday

https://www.seattletimes.com/business/microsoft-cuts-another...

Meta to Lay Off Another 10,000 Workers

https://www.nytimes.com/2023/03/14/technology/meta-facebook-...

wccrawford• 3 years ago

"Workers" doesn't even mean non-managers any more... It's just all employees. The word has lost a lot of nuance.

gonzo41• 3 years ago

It's sad that they don't have some sort of retraining for these people.

throwaway894345• 3 years ago

I'm guessing it's mostly people with deep specialization (and interest) in combustion drive trains (e.g., engineers). I don't think it's feasible to take a combustion drive train engineer with a decade of experience and make them reasonably productive as a battery engineer in a short timeframe. No doubt many of those engineers are capable of making the pivot, but most are likely not particularly interested.

hgs3• 3 years ago

I assume it's cheaper to hire new employees at base pay than pay to retrain the seasoned employees.

jupp0r• 3 years ago

Ford has previously said it is also hiring in some areas, so it’s not clear if these layoffs will result in an overall reduction in Ford’s workforce in the United States or Canada.

This might mean that they are eliminating positions, but are possibly filling new ones with the laid off employees where appropriate.

cubefox2• 3 years ago

The thing is: Combustion motors are amazingly complex and highly optimized beasts, while electric motors are dead simple. There isn't much to improve. So there are not many people working on electric motors.

sundvor2• 3 years ago

Nor servicing them, further down the line.

stcredzero2• 3 years ago

electric motors are dead simple. There isn't much to improve.

But the entire system of the vehicle, and the way we use vehicles, and the way those form factors affect society and people's lives are very, very complex. So basically, the shift in technology is going to enable changes and improvements in all of those ways.

Also, look at what Tesla, Lucid, and even Volkswagen have been able to achieve in terms of innovations just to date. Tesla has found ways to let electric motors spin faster, drive vehicles more efficiently, get built cheaper, and without rare earths. Lucid has Tesla beat in terms of comparable capacity in smaller packaging. Even Volkswagen has impressed Munroe and associates with some of their design around motors.

I'd bet you can find people mistakenly saying, "there isn't much to improve," in internal combustion engines over their long history. Even now, this isn't correct. I suspect 21st century innovation in vehicles is just beginning!

olivermarks2• 3 years ago

Ford is bleeding to death on purpose so they can get more tax payer EV subsidies

https://youtu.be/5MZeTeqdsTw

toomuchtodo3• 3 years ago

I wouldn't say it's on purpose. Ford has always been a marginal (financially) automaker, and while the US gov is providing substantial support (>$10B) via battery and vehicle subsidies, it will be a painful transition based on the financials and balance sheet. Too much financial and institutional debt considering the swiftness at which they must transform. Tesla has a lot of room in their margin (and also generous subsidies due to US component content) to eat price reductions due to rising interest rates, Ford does not while also trying to retool their entire manufacturing supply chain.

TLDR Efficient, nimble innovators can kick the can, laggard incumbents cannot.

jdsully• 3 years ago

Ford Credit (loans to purchasers of their vehicles) is on Ford's balance sheet while the others had to spin off those businesses in '08. So the debt situation is a bit misleading if you just compare the top level numbers to industry peers.

olivermarks2• 3 years ago

https://mishtalk.com/economics/ford-to-layoff-at-least-1000-...

jjtheblunt• 3 years ago

Wasn't Ford, unlike GM and Chrysler, NOT a recipient of bailout "too big to fail" federal money?

abakker• 3 years ago

yes, but it was more circumstantial. by lucky happenstance they had arrange a significant loan facility almost directly before the financial crisis. they leveraged this heavily but because the financing had been arranged ahead of time it left them more sound. Ultimately, the other vehicle makers just got loans from the government post-hoc.

gobins• 3 years ago

It's interesting that while other companies are doubling down on electric vehicles, Toyota has come out and said the opposite after being one of the first companies to start.

qqtt• 3 years ago

Toyota and Honda are both pushing more into electric cars these days. The main reason they are behind is that the Japanese government pushed hard to develop fuel cell cars and gave out big incentives for companies to put fuel cell vehicles on the road. This big push is why Honda and Toyota both have fuel cell options for customers to use on the road today, but they are both pretty behind on battery electric vehicles.

jandrese5• 3 years ago

To be fair the Toyota CEO was also actively hostile to BEVs, sparing no opportunity to belittle them. But yeah, the years wasted on dead end fuel cell technology definitely hurt them.

bigyikes• 3 years ago

Electric cars becoming dominant seems like an inevitability to me, and it looks like many auto makers agree. It’s “just” a matter of battery costs, battery density, energy costs, and volume.

What does Toyota see that we’re missing?

I ask this as someone who just bought an ICE vehicle, but only because there were no electric vehicles in my market segment.

GiorgioG• 3 years ago

As someone who isn't sold on EVs (as they exist today), I just don't how EVs will wind up being better economically. Energy costs will wind up going up as demand on the grid strains our infrastructure's ability to supply enough electricity as most folks switches over to EVs. Worse, costs for all electricity (home, industry, etc) will go up as demand surges. My ICE vehicle won't lose range like an EV's will over time. Nor, will it need an expensive battery to be replaced.

From a practical perspective, I can store 100+ miles of range in a $30 plastic container that I can store in the yard. If there's an extended power outage and I have an EV - I have to wait for the grid to come back up in order to drive my EV. Backup home batteries are still very expensive. Even at half their current prices they're prohibitive (compared to say an emergency gas generator).

Will these problems be solved? Probably, just not in the next few years. My wife just got a new car and we chose an ICE. I will probably replace my 2016 ICE vehicle in the next 5-10 years and I think I'll wind up with another ICE.

jdeibele• 3 years ago

I would have said that Japan was not great for solar but surprisingly (to me) they have almost 20X more solar energy produced than wind.

Renewable sources of electricity would seem to be solar, wind, hydro, geothermal, biomass, and nuclear. According to https://www.reuters.com/business/energy/japan-can-achieve-90... 24% of their energy is renewable today and they're planning on significantly boosting nuclear.

76% of their energy comes from gas and oil from other countries. Toyota and other Japanese manufacturers seemed to focus on their domestic market, meaning hybrids or ICE vehicles instead of EVs. Electric vehicles are becoming drastically more popular in the US and Europe.

Toyota talks about how the battery requirements of 1 EV could be used for a dozen hybrids. And they're right. But it's also besides the point.

https://en.wikipedia.org/wiki/Solar_power_in_Japan https://en.wikipedia.org/wiki/Wind_power_in_Japan

jandrese5• 3 years ago

What does Toyota see that we’re missing?

A huge ICE vehicle construction infrastructure that they don't want to throw away.

scop• 3 years ago

I was speaking with the owner of an auto shop a few months back and he made an interesting point I hadn’t heard re Ford: whereas Tesla is eating new customers, Ford and other legacy automakers are having to eat their own customers…which can lead to some serious business complexity!

SamuelAdams• 3 years ago

In the business world we call this cannibalizing sales.

https://en.wikipedia.org/wiki/Cannibalization_(marketing)?wp...

CharlesW• 3 years ago

The Innovator's Dilemma is a classic book on this, well worth a read: https://claytonchristensen.com/books/the-innovators-dilemma/

jandrese5• 3 years ago

Yep, and there is always a business case for trying to suppress/ignore the new technology and stick with what you know and what has been profitable for many years. This is how once mighty businesses fail. Look at Sears, who was Amazon before anybody knew what the Internet was, but then the Internet appeared and they couldn't move on because they had invested too much in their old business model. Moving a catalog mail order business online should be an incredibly easy transition, but decade after decade they dawdled until it was too late because it would have hurt the stores and the quarterly profits.

klipklop• 3 years ago

Likely a ploy to lay off more expensive older workers in favor of newer younger/cheaper ones. I can imagine them saying, "It has nothing to do with their age, we just need 'EV experience.'" Give me a break.

The idea that auto maker employees can't adapt to building EV's is pretty absurd. Interesting that upper management/execs are not being tossed out as well. You would assume they would be the group with the most outdated knowledge in a changing market. I know this did happen with Toyota, but you don't hear much with the likes of Ford. They seem as backwards as ever when it comes to selling cars.

Ford to lay off workers as it focuses on electric vehicles

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