‘Black Monday' looms over Ford's future – 01/22/06 – The Detroit News:
Good luck tomorrow when the “Way Forward” plan is introduced. It sounds like some tough cuts have to be made, the sad reality is that Ford has way too much capacity than sales. Management can shuffle the deck chairs and make excuses for not selling enough, but the factory people take the brunt of it when they're no longer needed.
Of course, you might ask why Ford didn't act sooner.
Even if Ford boarded up all of its American factories tomorrow, it would still have to pay the 87,000 United Auto Workers members who labor in them, while also continuing to cover health care and pension costs not only for them, but also for twice that many UAW retirees and their dependents.
This is true for GM also, thanks to the negotiated “JOBS Bank.” Why would GM and Ford agree to such a clause?
Part of the blame falls on GM and then-CEO Roger Smith who thought automation and the “lights out factory” was the wave of the future. The UAW feared the mass job losses and fought for protections for workers displaced by automation. Turns out that the lights out factory was a bit of a pipe dream, but Ford and GM sales dropped much faster than they would have wanted to anticipate. The thousands of people in the JOBS Bank wasn't caused by automation…. it was caused by declining sales, blame for that has to fall squarely on management's shoulders.
Imagine how things might have turned out differently if GM had been obsessed with Toyota-like principles of waste reduction and employee involvement? What if GM, instead of investing in robot experiments, had invested in training and education in true lean mindsets and approaches?
Now, Ford and GM would have still had to keep sales up… but with a better focus on people (rather than technology), I'm sure quality would have improved faster and that certainly would have help prevent such a sales slip and the need for as many plant closures.
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