Ford Motor is cutting its engineering staff by about 1,000 people as it works to manage costs during the expensive transition to electric vehicles. However, the layoffs are turning into a beneficial move for other industries in urgent need of engineering talent.
While the company confirms that cost reduction measures are underway, it did not specify how many jobs would be lost. This move is part of a bigger effort by Ford to become as lean as possible as it navigates the shift from being a huge seller of gasoline-powered vehicles to a more prominent manufacturer of both traditional and battery-powered vehicles.
Although transitions are never easy, some engineers who have been laid off are finding useful employment in other industries. CNH Industrial, a manufacturer of tractor combines and heavy-duty machinery, has hired 500 engineers recently from Rivian Automotive, Tesla, Ferrari, and Ford.
As a result of these cost-saving measures, the market is reacting positively to news of the layoffs, with Ford shares up 1.3% in midday trading while both the S&P 500 and Dow Jones Industrial Average also rising with gains of 0.9% and 0.4%, respectively.
As of the end of 2022, Ford had a total workforce of around 173,000 employees.
CNH Looks to Hiring More Engineers for Heavy-Duty Machinery
The rapid rise of autonomous driving and electrification in personal transportation is now transforming the heavy-duty machinery industry. CNH Industrial (CNHI) – a major manufacturer of tractors, backhoes, and other related equipment – recognizes this shift and is ramping up its efforts to hire more engineers to develop automated solutions for their products.
While it might not be feasible to electrify every tractor or backhoe, using batteries on some heavy machinery can make them less noisy and expand their working hours in cities. Additionally, CNH is collaborating with Hemisphere, a leading provider of high-performance satellite positioning technology, to develop automated and autonomous solutions for agriculture and construction. Deere & Co has also made similar strides in developing smarter equipment, which has given both companies an edge in profit margins.
According to Wall Street analysts, CNH’s operating profit margins are expected to increase from 10% in 2022 to almost 13% in 2025. Meanwhile, Deere & Co’s margins are expected to go up from 20% to around 22% in the same period. The advances in heavy-duty machinery engineering have proven immensely beneficial to the ag-equipment making industry and their investors alike.