North American car manufacture is now ruled by the Big Six, the original Big Three of GM, Ford and Chrysler having been joined by foreigners Toyota, Honda and Nissan. Last week, Ford announced drastic measures, as GM did earlier, to ensure that it would not be a contributor toward making that pantheon the Big Five. Faced with declining North American sales and market share and increasing losses, Ford announced a brutal downsizing in work force and capacity.
Between now and 2012, it plans to close 14 factories, eliminate up to 30,000 blue-collar jobs, 4,000 white-collar jobs and 12 percent of its corporate officers. The targeted white-collar employees are to be gone by the end of March.
The White House insists “the job market is hot” and that it will provide a safety net and help finding new jobs for the laid-off workers, but it’s a safe bet they won’t be at the same level of pay and benefits. And that’s where the problem lies: Free from foreign competition and prodded by a powerful union, domestic automakers in the booming decades after World War II built up generous levels of pay and health and pension benefits that could not be sustained in the face of globalization.
GM earlier announced it would close 12 plants and lay off 30,000, but even so there are still ominous rumbles about Chapter 11 bankruptcy. Chrysler has been bought by German automaker Daimler. By one count, the Big Three have cut 140,000 jobs, one-third of their North American work force, since 2000.
But auto manufacturing is hardly moribund. This year, foreign carmakers will be operating 28 plants employing about 60,000 in North America, but these are nonunion jobs and the sites are generally far from the traditional auto-making centers.
That Ford should be undergoing this convulsion is a matter of some irony, because founder Henry Ford pioneered affordable cars and the means of mass-producing them.
The loss of these plants with their huge payrolls will be devastating to their communities. But also being lost is an industrial way of life: a promise of lifetime employment to multiple generations of workers, comprehensive health care and early and well-funded retirement.
Globalization and economic realities may have made this jettisoning of workers and plants necessary, even inevitable, but it’s not pretty.