Still Like Your Union Job?

Fascinating article today in the Washington Times on the impending Ford layoffs.

Ford Motor Co. yesterday said it will close 14 North American manufacturing facilities and cut employment by up to 30,000 in the next six years as part of a broad restructuring meant to reverse financial losses and stabilize eroding sales in the company's home market.

U.S. automakers and their suppliers are laying off tens of thousands of workers as they struggle to overcome high pension, health care and wage costs; strong foreign competition; and auto designs that have limited consumer appeal.

American automakers are sitting on a double-edged sword in today's market. Not only has the United Autoworkers union contributed to the high costs Ford has grappled with for years as a result of its demands for inflated wages and pension and health care plans, but foreign competitors are simultaneously not strapped by such provisions. This is a plan for financial disaster, though you'll never hear union reps admit it.

Ford is having more success in foreign markets, posting profits in Asia, Europe and South America. The company, for example, is expanding its manufacturing facilities and introducing new products with a more than $1 billion investment in China, the Associated Press reported last week. The autos are sold in the fast-growing country.

Of course they are. Foreign governments are more concerned with creating jobs and expanding their economies than they are with regulating American manufacturers.

The United Autoworkers (UAW), which represents Ford workers, said [Ford's] plan, like the 2002 strategy, is a misguided attempt to gain profits by cutting workers and closing plants in North America.

Would you look at that! Ford Motor Company actually wants to make a profit! Huh. Someone ought to inform the UAW that when the costs of retaining workers and plants outweigh the benefits of doing so, the number of workers and plants will decrease. This is nothing new, nor should it be surprising. But instead of admitting that unions have directly contributed to these artificially inflated costs, Ford critics will simply wail that corporate "greed" accounts for its decision to outsource labor and manufacturing.

"Then, as now, the focus should instead be on striving to gain market share in this competitive market by offering consumers innovative and appealing products," said UAW President Ron Gettelfinger.

Hey, Ron. You worry about your workers. Let Ford worry about its marketing strategy.

"Somehow Ford is going to have to take on the UAW," said Jim Hossack, a consultant with AutoPacific Inc., an industry research firm.

Uh, I think that's what they're doing.

And now for the best part.

Peter Morici, a professor at the University of Maryland, said the plan does not clearly state how Ford will get its labor and design costs in line with its Japanese competitors, a shortcoming that will limit its ability to compete on price, quality and content.

"In a nutshell, the [Ford plan] looks like the road to Chapter 11," Mr. Morici said, naming the most common filing under U.S. Bankruptcy Code.

Actually, Ford is embracing this new plan to try to avoid going broke. And if the UAW doesn't do its part to reduce the high costs it has placed on Ford over the years, layoffs and outsourcing will continue to be the natural course of events. On the bright side, however, this is usually a company's last resort before it goes bankrupt altogether - which tends to cost everyone his job.