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Ford announced that it would be laying off up to 30,000 workers over the next six years and shuttering up to 14 plants in a move that appears to signal a shift "East" instead of "Forward".

Ford just announced today that it's "Way Forward" restructuring plan will eliminate 30,000 jobs and close 14 plants.

It might better have been called "The Way East" plan, for despite shrinking market share here in North America, both Ford and GM had an outstanding year in China. The Geely 71751 CK exhibit and Ford's -- as well as GM's -- success in China, appear to me, at least, to be the handwriting is on the wall -- unless arrested by political events -- that more and more parts and eventually finished cars sporting Ford and GM badges are going to be "Made in China".

But moving to cheap labor markets is hardly the kind of innovation that Bloomberg columnist Doran Levin said Ford needs to implement or "die". Long ago, I suggested -- somewhat tongue-in-cheek at the time -- that Ford ought to consider building wind turbines, in part to offset the greenhouse gas emissions of its SUVs and pickups. In the current light, the idea isn't all that outlandish. Consider that during the Second World War, Ford converted its plants to building everything from Jeeps to B-24 bombers.

But just building cheaper cars isn't going to solve beleaguered U.S. car company problems. Someone else will always build them for less. If and when Asian labor costs get too high, there's always impoverished Africa.

So, maybe its time to start thinking beyond the automobile. Writes Friedman, "green energy-saving technologies and designs - for cars, planes, homes, appliances or office buildings - will be one of the biggest industries of the 21st century."

When it comes to innovation beyond the car factory, Honda has to be the model. Besides cars, it builds off-road vehicles, motorcycles, boat motors, generators, robots, corporate jets and now its getting into solar photovoltaic. Toyota even has a home building unit in Japan.

For a company like Ford -- or GM -- that kind of innovation won't be easy, of course. Old Henry Ford tried to break into the emerging technologies of his time, with little lasting success. Douglas DC-3s made Ford Trimotors obsolete, and Ford farm tractors didn't keep pace with the national shift away from an agrarian society to a suburban one after World War Two. There were fewer, but larger farms requiring ever-bigger machines. The 160 acre, quarter section farm, for which the Ford tractor was ideal, was gradually becoming a thing of the past.

Neither Ford nor GM have the financial resources to make many more missteps. This much seems certain, the age of the highly-profitable, fuel-hungry SUV is past. Ford's new cross-over Edge is designed around that assumption. It's Reflex diesel-electric hybrid concept car also strongly hints at the direction of its strategic thinking.

People and goods will always need to get around safely, quickly and affordably, but given the profound shifts that a post-petroleum world will force on the world in the 21st century, Ford's future may lay beyond the legacy of Bill Ford's great grandfather, who experimented with hemp-based body panels and rubber extracted from goldenrod.

Instead of "Quality Is Job One", Ford's new motto is likely to be "Innovate or Die".

Originally posted to My EV World on Mon Jan 23, 2006 at 04:19 PM PST.

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Comment Preferences

  •  I Wonder How Much Market Share (none)
    They will be able to pick up in jobless America?  Doesn't really matter anymore, though does it?

    They should just have China make plastic Ford-badged kids toys.  As that's about the only thing Wal-Mart wage Americans will be able to afford soon.

    America is like a game of monopoly that has ended, but everyone is forced to keep playing forever.

    by Necons Will Ban Me on Mon Jan 23, 2006 at 04:22:06 PM PST

  •  A quarter section is 160 acres, not 80 n/t (none)

    Economic Left/Right: -6.63 Social Libertarian/Authoritarian: -5.85 That makes me more Gandhi than Stalin

    by TomDuncombe on Mon Jan 23, 2006 at 04:22:43 PM PST

  •  it's all about health care (4.00)
    Other countries don't expect employers to pay for health care via grossly inefficient private insurance plans.

    Ford and GM will continue to build cars in North America, but mostly in Canada, where it's far cheaper for them.

    If you want to keep good jobs in the US, you want to take the problem of providing health insurance out of the hands of employers.  Expand Medicare so it covers everyone; the required tax increases will be more than offset by savings to employers.  The employers can make up for it by paying extra taxes to compensate for the health benefits they no longer have to pay.

    But it would be even smarter to assess those make-up taxes based not on number of employees, but on some combination of revenue and income, so that moving jobs overseas is less profitable.

    •  Also Pensions (4.00)
      Just heard Harley Shaiken on PBS, and he said Ford and GM have approximately 800,000 retirees in the US for whom they provide pensions and health care.  By comparison, the Japaneese have 1,000.

      The revolution will not be televised, but we'll analyze it to death at The Next Hurrah.

      by Dana Houle on Mon Jan 23, 2006 at 04:37:28 PM PST

      [ Parent ]

    •  UAW President Calls for Single Payer Healthcare (none)
      Agreed, that part of the problem is the healthcare/pension problem at Ford and GM. This week, the President of the UAW gave a speech at the Detroit Auto Show calling for a single payer healthcare system, i.e. national healthcare... which is one of the reasons a lot of cars are going to be built in Canada.
  •  Darnnit (none)
    Seems the Japanese have already beat old Fordy boy again -

    WASHINGTON (Kyodo) Toyota Motor Corp. said Tuesday it will start manufacturing Camry sedans with hybrid electric-gasoline systems at its Kentucky plant in late 2006, making it Toyota's first U.S. production base for hybrid vehicles.


    Toyota's top executives have said recently they are concerned about the current financial plight at General Motor Corp. Industry sources said Toyota fears the situation could revive the kind of auto friction that sent Japan and the U.S. toward a trade war in the 1980s and 1990s.

    Stressing its economic contributions, Toyota said its annual production capacity in North America by 2006 will reach 1.66 million cars and trucks, with direct investment of nearly $16.6 billion and annual purchasing of parts, materials, goods and services from North American suppliers totaling close to $25 billion.

    I applaud the Japanese for their investments.  I just think it puts things in perspective that Ford is getting all these pats on the back for doing what the Japanese auto manufacturers are already doing, and how Japanese companies, instead of being happy they are beating the American companies, are actually concerned at how badly they're doing.

  •  Some Details (4.00)
    Honda is a shitty example in other areas, most notably their virulent hostility to unions.  They pay their American workers about 30% less than the UAW-organized manufacturers, and locate mostly in anti-union locales.  

    As for being "green," Ford is by far the greenest of the American companies, and in some ways greener than anyone in the industry.  Bill Ford Jr is committed to the environement, and Ford has done some interesting things, including growing greenery on the roofs of some of their newer buildings to cut down on energy consumption and capture pollutants.  You also alluded to their hybrids, which are further advnaced than the Europeans, Koreans and GM.

    And a quibble: I'm pretty certain Ford didn't build Jeeps.  I think the Jeeps were all built by Willys, which was absorbed by AMC, which was absorbed by Chrysler, which was largely absorbed by Daimler-Benz.

    The revolution will not be televised, but we'll analyze it to death at The Next Hurrah.

    by Dana Houle on Mon Jan 23, 2006 at 04:35:44 PM PST

    •  Ford-Built Jeeps (none)
      Ford did build Jeeps. "Even before the bombing of Pearl Harbor, the Army realized it had a great vehicle on its hands and contracted with Ford Motor Company to supply additional vehicles using the Willy-Overland design. Virtually all parts were interchangeable between the Willys- and Ford-built Jeeps, though the Ford used a u-shaped front cross member while the Willys used a tubular brace."
    •  exactly. (none)
      Toyota, Honda and Hyundai build cars in this country at non-union plants.

      Ford is catching on a bit late, but they're pushing hard into recycled materials, diesel hybrids, and manufacturing plants that can easily be modified to build more than one type of vehicle.

      I'm rooting for Ford, and for GM.

      If Ford will put a diesel hybrid engine in the new Fusion or Edge, I will buy one for my next vehicle.

  •  Great Leap Forward with Comrade Chairman Ford (none)
         Or, was it Great Leap Backward.
  •  Yeah well... (none)
    What do you expect by a company that not only was founded by a major fascist bigot, but one which still tries to paint a rosy picture of the asshole.
  •  if the American Car companies (none)
    make their cars 100% overseas, I'm going to buy the best car for my money without respect to where the corporate headquarters is.  Are they even incorporated in the U.S.?  

    Our last 2 vehicles have been American made.  Next vehicle is going to be a Prius that's on a ship right now.  Don't know what the car after that is going to be, hopefully the American car companies will have their stuff together by then.

    If you look at the Japanese car companies, they have design centers here, management and engineering in Japan, and many of the cars are made here.  American car companies have everything here but manufacturing is steadily moving overseas.  As that happens, their sales have steadily dropped.  Maybe management should be outsourced, and manufacturing stays here.  

    American and Japanese car companies sell essentially the same vehicle in many cases.  The one that comes immediately to mind is the toyota matrix and the pontiac vibe.  Nobody wants a vibe, but the matrix is doing ok, and they are the same car.  So what's the problem?  It's not manufacturing, design or engineering, that is obvious.

  •  Going East (none)
    You're right that the car companies are going east.

    But right now, they're selling cars, not yet making them (parts is another issue). And GM (which got in earlier and therefore has made back its initial investments) can make a ton more on a car there than here. They used to be able to make $2000 (as compared to $250 here) profit on a Regal. Every car they sell in China is more money that goes into healthcare here.

    But honestly, we ought to take a lesson from Asia. Almost every Asian country taxes imports at about 35-45%. So they're guaranteed to get jobs and technology along with the cars (ASEAN allows trade within the block, so a car made in Phillipines can be sold in Thailand without that duty). Most companies are making the cars they sell in the US here. But that's changing.

    This is the way democracy ends Not with a bomb But with a gavel -Max Baucus

    by emptywheel on Mon Jan 23, 2006 at 08:51:55 PM PST

  •  That won't help them. (none)
    Ford's problem isn't the workers.  It's the upper management who are only interested in looting the sinking ship just before it goes under.

    In the 90's the big three had a fucking goldmine on their hands.  Americans fell in love with gas guzzling tanks and were willing to pay a hefty extra for the thrill of launching 6000 pounds of steel down the highway.  In a well-managed company, one might expect the management to anticipate the chance of a sudden and prolonged gas hike that could decimate the guzzler sales and to invest in development of vehicles that are not as vulnerable to high gas prices.  But who the hell would want to do that if the new profits can be pocketed instead, the long-term consequences be damned?  The current situation is nothing more than the consequences catching up to Ford's decisions.  Too bad the workers will bear the brunt of the negative effects.

    I think the C*O types in those companies are counting on the government or the states to do everything possible to keep Ford or GM from going under.  If one of them were to go out of business, quite a few states would have their unemployment figures jump to The Great Depression levels overnight.

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