Ford Motor Co. and Dow Chemical Co. joined a growing number of companies firing thousands of workers as sluggish U.S. growth and Europe’s deepening recession lead to a persisting slump in sales.
North American companies have announced plans to eliminate more than 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.
Restructuring measures designed to trim annual costs by about $190 million are “difficult but necessary steps to ensure our plan has the right scale and scope to address the market and competitive challenges we now face,” Rory Read, chief executive officer of the Sunnyvale, California-based company, said on an Oct. 18 conference call.
Ford, the second-largest U.S. automaker, is closing two factories in the U.K. and one in Belgium by the end of 2014. Including previously announced cuts, Ford said it is eliminating 6,200 positions, or 13 percent of its European workforce. In contrast, the Dearborn, Michigan-based automaker has added more than 6,500 hourly jobs and 900 salaried positions in the U.S. this year, Todd Nissen, a spokesman, said in e-mails.
Back in the U.S., companies are hesitant to expand until they know the result of the presidential election and how lawmakers will handle the so-called fiscal cliff, or the $607 billion in tax increases and spending cuts set to take effect in January if Congress doesn’t intervene. Inaction probably would cause a recession in the first half of 2013, according to the Congressional Budget Office.