The Turnaround At Ford Page $192$For the several years, the Ford Motor Company $($Ford$)$ had been going through difficult times. The company's share of the automobile market continued to shrink, and its cost structure has contributed to financial losses. In $2006,$ Ford lost $$12\mathrm{.}6$ billion. In $2007,$ Ford did better, posting losses of only $$2\mathrm{.}7$ billion. At the same time, however, Ford's market share continued to dwindle. In $2007,$ its share was $14\mathrm{.}8\%--$down from $26\%$ in the $1990$s$.$ In an effort to match its production with the demand for its products, as well as address concerns with its high labor costs, Ford decided that smaller was better$--$and necessary$--$to achieve long$-$term success in the automobile industry. One of the primary ways for Ford to achieve this goal was to take further steps to reduce the size of its workforce. As of $2008,$ Ford employed about $54,000$ U$.$S$.$ union workers. It had about $23,900$ salaried workers in North America and about $12,000$ U$.$S$.$ workers eligible for retirement, or about $22\%$ of its hourly workforce. Ford announced a new round of buyouts and early retirement packages to all of its $54,000$ U$.$S$.$ hourly workers in an effort to cut costs and replace those leaving with lower$-$paid workers. Ford offered eight different packages for employees. Some of the features of these plans were: Workers who were eligible for retirement would get a $$50,000$ offer, higher than the $$35,000$ in the previous round of buyouts. Skilled$-$trade workers, such as maintenance workers, would get an additional $$20,000,$ bringing the total potential payout for such a worker to $$70,000.$ Other packages would follow the basic pattern of buyouts Ford offered in late $2006.$ Younger workers could leave for a $$100,000$ lump$-$sum payment and receive health care benefits, for a limited time. Older workers could get $$140,000$ and receive pension benefits if they retired immediately, but they would forfeit future health care benefits. The automaker's goal in offering the company$-$wide buyouts was to cut as many as $11,000$ hourly jobs and as many as $2,000$ salaried positions. One of Ford's goals with these buyouts was to replace many workers with new employees who would earn a lower wage under the terms of its recently negotiated labor agreement. New hires would earn a little more than $$14$ per hour, about half of what the then current union workers earned. $($Note: Minimum wage had just increased from $$5\mathrm{.}15$ per hour to $$7\mathrm{.}25$ per hour$).$ The number of these so$-$called second$-$tier wage workers was capped at $20\%$ of Ford's workforce under terms of a new pact with the UAW $($formerly the United Auto Workers union$).$ Ford President and Chief Executive Alan Mulally said the automaker would also trim salaried staff, mostly through attrition but possibly also through layoffs, as it tried to adjust to the slumping U$.$S$.$ market$\mathrm{.}1.$ What factors contributed to the large$-$scale labor surplus at Ford? $2.$ Ford decided to pursue employee buyouts and attrition in an attempt to shrink its workforce to match its productivity demands. a$.$ Why do you believe Ford was using these two tactics? $($Answer in the third person$).$b$.$ Do you believe these were the best options for Ford to achieve its goals? $($Answer in the third person$).3.$ What were the downsides of these two approaches?$4.$ Were there any other approaches one might have recommended to address its labor surplus?

subject: human resourse management MGT$510$