Ford Needs A Better Idea

The news today at Ford was not good. They are shutting down plants and laying off workers. Seeing how they were paying some employees to sit around and not work, there is little difference except the employees will earn substantially less on unemployment for doing the same thing. I feel badly for the people who will lose their jobs but they and their unions have brought this on themselves. When workers are being paid $30-40 per hour the cost is shifted to the product and ultimately to the consumer. Add the benefits union employees enjoy and the costs skyrocket.

Ford had to do something to cut costs. Many automobile manufacturers overseas are producing cars for much less because their overhead is much lower. In a free market this spells disaster. There was once a time when car makers could get away with this because there were few options. When China makes cars that sell for 6-7 thousand dollars the American cars become over priced.

The news is bad and you never want to see a person lose his job. However, they need to take a step back and look at the reasons behind the company’s troubles. Unless they can become competitive, they will go the way of many other businesses that failed to recognize the signs of demise.

Source 1: WBAL
Source 2: Reuters



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