As we move towards a globalized business world, new competitors have risen from developing nations. These nations now pose a threat to the many industries still stuck in their old ways. One industry in particular is the American auto industry that has seen a large fall in their earnings. Japan is one nation who has revolutionized the auto industry through Toyota. The world is growing and with this growth we see a need for energy and with it has come a high price at the pump. Ford Motor Co. and General Motors Corp. due to a lack of planning, inability to adjust to this energy crisis, and other problems have led to massive losses. With investors anxious for change, American auto industry in order to compete in the car industry has sought ways to cut their costs. Both Ford and GM have resolved to plant closed downs and massive layoffs.
To compete with foreign automakers GM announced in Nov. of 2005 that it would be cutting costs by eliminating 30,000 hourly jobs and close or scale down operations at about a dozen U.S. and Canadian locations in attempts to save in a bid to save $7 billion a year. Ford announced similar plans in Jan. 23rds 2006 press release. They planned to close 14 plants in North America and cut between 25,000 to 30,000 Jobs by 2012 as they try to stop losses and adjust to a significantly lower market share. Rival Toyota has been able to present a more fuel economic car, which has brought on this lower market share. Further on, back in 2003 the American car industry reported inventory levels were at a record high, finishing of the year with 3.2 cars and trucks in stock (Mergentonline.com). This goes to show that with further planning and more concern toward globalization they could have lessened the blow.
Now where does this leave all those people who lost their jobs? Jim McIlreavy, 34, from South Lyon, Michigan, has worked for Ford for seven years said, “Many of us are going to have to sell our homes and move... [continues]
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