Ford is closing 14 North American plants and cutting 25-30,000 jobs in the next four years. Meanwhile, Japanese auto makers and their American factories and sales counterparts have waiting lists for some of their cars.
When you think of Ford, what comes to mind? For me, it's over-sized trucks and the Mustang. Of course they're late getting on the hubrid wagon (
they do say they'll have 250,000 hybrids rolling off the line by 2010, about ten years too late).
GM also posted losses and layoffs in the past year.
This is a failure of vision, plain and simple. Unlike the airlines, this one can't be blamed on the spectre of "high labor costs," since Japanese automakers pay their people even more than we do.
The UAW is actually pretty pissed.
From Reuters:
Union leaders, who must negotiate a new contract with the car maker in 2007, called Ford's restructuring "extremely disappointing and devastating news for the many thousands of hard-working men and women who have devoted their working lives to Ford."
"Certainly today's announcement will only make the 2007 negotiations all the more difficult and all the more important," UAW president Ron Gettelfinger said in a statement.
I think this is the gist of the underlying problem. When American icons like GM and Ford fail, it's not just Bill Ford and stockholder's problem, it's everyone's. Lest we forget, car companies like to lay people off and then rehire a lot of them as "temporary" workers without their union benefits. Many others will simply have no chance for their old jobs back and be forced to declare bankruptcy, become displaced around the country, and take jobs that will move them down the chain of pay and benefits.
How can American automakers come back from 20 years of mismanagement?