The automaker’s goal in offering the company-wide buyouts was to cut jobs, reduce its ongoing pension expenses, to position itself to be more competitive in the market, and to align its labor capacity with the demand for its products. In 2018, Ford announced that by 2020 around 90% of Ford’s sales in North America would be trucks, SUVs, and commercial vehicles. The only two cars to be manufactured in North America would be the Mustang and the Focus Active Crossover. The company has reallocated $7 billion of its research funds from cars to trucks and SUVs.
Answer the following questions:
What factors have contributed to the large-scale labor surplus at Ford?
What impact is the most recent strategic plan at Ford likely to have on the company’s labor supply?
Over the years, Ford has decided to pursue employee buyouts and attrition in an attempt to shrink its workforce to match its productivity demands. Why do you believe Ford uses these two tactics?
Do you believe these are the best options for Ford to achieve its goals?
What are the downsides of these two approaches?
Are there any other approaches that you might recommend to address its labor surplus?