Ms510: The Turnaround at Ford Company

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Lesson 3 Case Study

Prabin Bhandari

.MS510: Human Resources Management

Professor Ira Lovitch

September 20, 2015

                                The Turnaround at Ford

This case is about the difficult times faced by the Ford; an automobiles company  and the crucial steps it took for uplifting the standard of the company in all regards. The company has faced financial losses and its declining market share which shows the severe condition of the company. Thus the company has tried to downsize the workforce capability and reducing the higher HR expenses made by it. The company has decided that the smaller is better for achieving the long term success in the automobile industry for several years. For this purpose Ford has announced a new round of buyouts and early retirement packages to all of its 54000 U.S. hourly workers in an effort to reduce the cost and increase the revenue/turnover of the industry so that it would be able to regain its market share and avoid the continuous facing huge financial losses.

Factors contributing to the large-scale labor surplus at Ford

Among the different factors following important factors contributed to the large-scale labor surplus at Ford:

1. Lack of proper workforce planning was another factor behind the failure of Ford as it hired large numbers of staffs forecasting the furor sales and growth of the industryAt previous time the company had good market demand and reputation. Though for this purpose also had hired huge no. of employees.
2.  Having the concept as “higher is better” and necessary to achieve the long-term success of the automobile industry.
3. Higher pay out was another reason behind the financial loss somehow.

Tactics to shrink workforce

For the employees buyouts and attrition in an attempt to shrink its workforce to match its productivity demands Ford has used two tactics for the following purpose:

1. To cut-off the higher HR expenses which was the important factor behind increasing losses.
2. To regain and achieve the long term success in the automobile industry.
3. To make the market share strong and to become the market leader in the field of automobile industry as it was in the previous days..

Downsizing is the best way adopted by Ford in this case to uplift the standard of the company financially because an HR expense is observed a lot in this case. It is natural and the prime objective of the organization to earn profit. The bitter decisions are to be taken sometimes when the company faces severe problems. Also, we don’t feel that the company has made injustice to the employees as it has offered for various packages of schemes to meet their financial needs. Thus, this kind of policy made by Ford is appropriate in my view for reducing the increasing financial losses