Ford cuts thousands of workers in response to global economic pressure

This week both class and my google.news searching made me consider global pressures on the business front. In particular, I am thinking of the huge job cuts by Ford.

Perhaps some young Japanese males are separating themselves from the national stereotype (see hikikomori blog) but Japan’s economic bid into the global market remains strong. Just look at how the country’s car manufacturing has affected US business and market strategies.

According to USA Today, http://www.usatoday.com/money/autos/2006-01-24-ford-cover-usat_x.htm, “Together, the downsizing of Detroit's Big Two automakers is evidence of how dramatically foreign rivals, mainly the Japanese, have expanded in the USA. It means that the two automakers that once dominated the U.S. car market like schoolyard bullies will shrink into companies that will scrap for buyers on the same footing as many others.” In this view of the global market, nations are competitors fighting for a piece of a pie that is global-size rather than nation-size. But as the cuts by Ford shows, supersizing your business can be risky. Ford just made “a stunning 26% cut that will eliminate 25,000 to 30,000 hourly jobs, in addition to 4,000 white-collar jobs Ford previously said it would ax” (USA Today). But Ford itself feel it is just responding to global pressures in the market: “What gives us confidence is that it has worked in Ford of Europe. It's worked in Mazda. It's worked in South America," said Bill Ford. "We have turned around our major operations. We know what to do.”” (USA Today).

And what are they doing? According to the San Diego Tribune, http://www.signonsandiego.com/news/business/20060124-1325-automakers-restructuring.html, “GM and Ford say they're going to the very core of their businesses to turn things around. They're vowing to work more closely with suppliers to cut costs, a tactic borrowed from Japanese rivals. They expect to save billions in development costs by sharing components globally and making plants more flexible, and they're promising to rely less on costly incentives. ‘At both companies, they're very much attacking the culture of the organization,’ said David Cole, chairman of the Center for Automotive Research in Ann Arbor.” Still, this shows that America is not exempt from feeling global pressure itself, despite how much pressure it exerts on others. The job loss reflects the agonies of workers in capitalist systems around the world in down times. American workers do not have some special protection to the forces of globalization on the economic front.