Ford Motor Company Restructuring

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Ford Motor Company Restructuring
Holly Colton
Organizational Change: MGT 435
Professor Guwanda Lewis
June 7, 2010

With the effects of the ever changing United States economy, how was Ford Motor Company able to rise above its competitors to stay afloat in the auto industry? Ford has gone through extensive restructuring in the past years to help the company in this current time of hardship. Some of these restructuring efforts have been to down-size the workforce, to focus on the Ford Brand and cut back on other brands under their agency, employee involvement at all levels, and to increase the efficiency in Ford’s four main pillars for their organization: fuel efficiency, quality, safety and value. Ford also continues to invest in the top Research and Development efforts in order to bring the highest quality products to their consumers for an affordable price. Ford not only is trying to make the jobs of their employees easier but also to meet the needs of their customers and worldwide markets. In this paper we will further discuss the organizational changes that have occurred at the Ford Motor Company. Downsizing

In 2006, Ford Motor Company realized that they were going to have to make cuts in jobs in order to save on the budget. While not always desirable, Ford was able to notify the workers in advance and offer settlements that helped the employees through the transition of employed to unemployed. Ford was able to take into consideration the needs of the people that will be affected by this change and do what they can to make the change manageable. People generally resist change that is sudden and comes as a surprise to them. “One key aspect of timing and receptivity is surprise. If the change is sudden, unexpected, or extreme, resistance may be the initial—almost reflexive—reaction…At the very least, you would want to know about this change far enough in advance to have time to prepare for it.” (Bateman, 2007) In 2006, Ford Motor Company announced that they would be closing 14 North American manufacturing plants and cutting up to 30,000 jobs in order to cut losses and adjust to new lower market shares. Ford was able to inform employees the changes/closing that would occur and give time so it was not immediate loss of job and paycheck. “But the cuts won’t come immediately. Some will not take effect until six or more years from now, and many will be accomplished through attrition and retirement. Ford has a contract with the United Auto Workers union that runs through September 2007 requiring laid-off employees to be paid nearly their full pay. This will require Ford to offer buyout packages to many of the employees who are laid off in order to accomplish the cuts.” (Isidore, 2006) Through Ford’s willingness to share information openly to employees and also to offer packages to compensate for a period of time before finding other employment, Ford not only was able to make the cuts without as much resistance, but also was able to show that they can be trusted and care not only for the well being of the company, but also its valued employees. Ford also did not just cut jobs of all just the lower level employees. Individuals were cut from every level of the organization. This showed that Ford really needed to change and did so be letting go of people from all areas of the company. During change people get concerned in regards to who will and will not lose their jobs. Ford showed that they did not show favoritism as many would think that they would save managers jobs as they are more valued. I think through doing this Ford was able to make the employees more comfortable with the change as when change occurs it has to happen on all levels and this change affected all levels of the organization. “Ford did promise that it would make new cuts in management, trimming its officer ranks by 12 percent and its salaried work force by about 4.000 in the first quarter of the year…The company said it also plans to...
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