The Turnaround at Ford Term Paper Example | Topics and Well Written Essays - 750 words

The Turnaround at track - Term Paper typefaceFrom this paper it is clear that in the case of Ford, it was tougher because it was faced with two pronged issue, first is the harsh macroeconomic environment wrought by the financial crisis, second is the aggravation of competition that compelled auto companies to streamline their trading operations to remain competitive. In Fords case, their market cope declined from 26% in the 1990s to a mere 14.8% in 2007. During the crisis, demand for high ticket items declined of which auto industry were among the worst hit and this resulted to the big labor surplus at Ford because the demand significantly declined. During the precipitous decline of demand, Ford has to deletion its production to avoid waste with the same manpower it had when it was operating in full capacity. Also, the decline in demand resulted in decline in sales that could no longer sustain its overheads in manpower.Ford has decided to pursue employee buyouts and attrition i n an attempt to shrink its workforce to match its productivity demands. wherefore do you think Ford is using these two tactics? Do you think these are the lift out options for Ford to achieve its goals? Ford has to use this tactics because the demand declined. This is evident with their shrinking market share of a mere 14.8% from a 26% in the 1990s. They just cannot maintain the same overhead damage in terms of manpower when sales is declining. This is evident with their losses of $12.6 billion in 2006 and $2.7 billion in 2007. If they will not cut down their manpower according to the manpower requirement of the demand, loses will fall out and it will not be long before Ford will get bankrupt. If that happens, Ford will instead have to let go all of its employees.