Spring Break
The Big Three: Jobs still at stake in Middle America
Scott Conover
Issue date: 11/21/08 Section: Forum
It is arguable that companies should be permitted to fail. In domestic free market economies, this is fate of inefficient, ineffective or unlucky companies. However, this is not always the case, especially in hard times. Employment in a recession is difficult to sustain, and any serious damage to sector employment can lead to decreased consumer spending, financial panic and of course, worse times for those who lose their jobs. The Big Three are no different in this case than any other. While perhaps in a perfectly capitalist world they would fail, dare we risk the loss of jobs over Christmas time?
One of the primary reasons that the Big Three are weak is due to the fact that they possess poor labor productivity as compared to their competitors, such as Japanese automakers Toyota, Nissan and Honda. According to CBC news, "The 2005 Harbour Report estimated that Toyota's lead in labour productivity amounted to a cost advantage of $350 U.S. to $500 U.S. per vehicle over North American manufacturers." This may be due to the fact that American companies have union workers, which increases costs, providing family-wage jobs to numerous Americans, but also makes it difficult to compete in an international market.
Employment is a serious stake in any economy, and the U.S. auto industry employs thousands of people. Zenobank.com, as of 2008, Ford Motor Company (F) employs 87,700 people. Yahoo! Finance also shows General Motors (GM) as employing 266,000 people. Chrysler employed 132,130 people as of 2006; those numbers may have declined to as low as 15,000 after the latest November cuts. This provides an approximate total of 368,700 full-time employees.
Generally speaking, given the nature of these jobs in America, it is likely that there are several other persons who are employed in secondary and tertiary support industries surrounding the Big Three. For example, although car manufacturing is important in America, comprising some portion of the commercial and service industry manufacturing, it is affected by and affects other industries due to domestic demand for materials, supplies and transportation, as well as other factors which exist within the process of procurement and logistics.
One of the primary reasons that the Big Three are weak is due to the fact that they possess poor labor productivity as compared to their competitors, such as Japanese automakers Toyota, Nissan and Honda. According to CBC news, "The 2005 Harbour Report estimated that Toyota's lead in labour productivity amounted to a cost advantage of $350 U.S. to $500 U.S. per vehicle over North American manufacturers." This may be due to the fact that American companies have union workers, which increases costs, providing family-wage jobs to numerous Americans, but also makes it difficult to compete in an international market.
Employment is a serious stake in any economy, and the U.S. auto industry employs thousands of people. Zenobank.com, as of 2008, Ford Motor Company (F) employs 87,700 people. Yahoo! Finance also shows General Motors (GM) as employing 266,000 people. Chrysler employed 132,130 people as of 2006; those numbers may have declined to as low as 15,000 after the latest November cuts. This provides an approximate total of 368,700 full-time employees.
Generally speaking, given the nature of these jobs in America, it is likely that there are several other persons who are employed in secondary and tertiary support industries surrounding the Big Three. For example, although car manufacturing is important in America, comprising some portion of the commercial and service industry manufacturing, it is affected by and affects other industries due to domestic demand for materials, supplies and transportation, as well as other factors which exist within the process of procurement and logistics.
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Stephen
Stephen
posted 11/26/08 @ 2:58 PM PST
It certainly seems like any way you go with the matter of the Big Three, there are going to be sacrifices. Letting them fail will cause the immediate loss of thousands of jobs. (Continued…)
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