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Case Title:

Corporate Downsizing: The Ford and GM Approaches

Publication Year : 2007

Authors: Rudrajit Mishra, Abhijit Sinha

Industry: Automobiles

Region:US

Case Code: HRM0034K

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Ford, the third largest US based automobile company (after GM and Toyota) planned to retrench its manpower in US in 2006. This announcement came after couple of months of GM’s manpower rationalization. Where GM mainly concentrated on cutting the blue collar jobs, Ford planned to cut 14,000 white collar jobs in North America as it tried to turn around its flagging business. It had also planned to close 16 factories by 2007, instead of shutting 12 by 2012 as previously announced. Ford expected these measures would help it to reduce annual costs by about $5bn (£2.65bn) by the end of 2007. Earlier in 2006 Ford announced it would offer redundancy and early retirement packages to all of its 75,000 unionized blue-collar workers in the US. This case deals with the details of employee separation plan of Ford Motors vis-à-vis GM. It also unfolds how this initiative can be strategically beneficial in Ford’s turnaround plan and also enlightens HR aspects of this Early Separation Plan.

Pedagogical Objectives:

  • To discuss the automobile industry
  • To analyse the restructuring strategy of Ford and GM
  • To discuss the different phases of Ford’s employee separation plan
  • To debate on Ford’s turnaround strategy through job cut of its employees.

Keywords : Ford, General Motors (GM), HRM Case Study, Corporate downsizing, Manpower rationalisation, Early separation, White-collar, Blue-collar, Turnaround, North America, Redundancy, Flagging business, UAW, Alan Mulally, Job cut

Contents:

  • Company Background
  • Ford
  • GM
  • Industry Overview
  • Ford’s vis-à-vis GM’s Separation Plan
    • GM's Accelerated Separation Plan
    • Ford's Employee Separation Plan

    • Ford's Employee Separation Plan: The Phases
    • Buyout Strategies Varied Ford vis-à-vis GM
    • Employee Separation: A Rationale
  • Employee’s Response
  • The Road Ahead
  • The Qualiflier alliance

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