Family Automakers Facing Tough Times
It’s been a tough week for family-controlled automakers.
Ford Motor Co. announced that it will offer early retirement packages to 10% of its salaried employees in North America and Asia as “an accelerated attack on costs,” the Wall Street Journal reported.
While the U.S. automaker rebounded from the financial crisis and increased its workforce, sales have grown stagnant and share prices have slumped since Mark Fields became CEO three years ago.
Of Ford’s worldwide workforce of 200,000, 1,400 jobs will be cut, according to the Journal. Factory personnel and employees in analytics, information technology and product development will not be affected. (Source: Wall Street Journal, May 17, 2017.)
Matthias Mueller also received bad news this week. Stuttgart prosecutors said they were investigating him in connection with Volkswagen’s 2015 emissions scandal.
Mueller, now chief executive of the company, was not with VW at the time of the scandal, but was a board member of Porsche SE, the holding company that controls VW. He was also chief executive of a VW Group subsidiary, Porsche’s sports car business, according to the BBC.
The investigation into Mueller doesn’t focus on the cause of the scandal in which VW rigged car emission systems to cheat on regulatory tests, but on how the board handled the information. (Source: BBC, May 17, 2017.)
Finally, Toyota and BMW are two of four automakers that will be opening their checkbooks to settle claims over exploding airbags.
The companies that settled this week will pay $553 million. This does not include any personal injury claims, the Financial Times reported.
Lawyers for the plaintiffs lawyers said that, as of the end of April, about 30% of planned recalls of Toyota vehicles and 16% of BMW recalls were complete.
The maker of the airbags, Takata, reached a $1 billion settlement with the United States government earlier this year.
Subaru and Mazda were also part of the settlement. Ford, Honda and Nissan are still facing claims. (Source: The Financial Times, May 18, 2017.)