Ford in China

Ford in China

Ford operates 70 plants worldwide employs 164,000 employees of which approximately 26,000 of them are in China. The Chinese plants function mainly as an assembly workshop and Ford Company has been enjoying the benefits of low cost labour in the country.

But in recent years, Ford has encountered several quality problems in its production. Major recalls of Ford Mustang in 2011 due to broken manual transmissions built in their chinese plant (Hyde, 2011) and another recall of the Ford Kuga SUV due to potential fuel leaks (Lee, 2012) has dampened the image of the American car company. As mentioned in the book “Poorly Made in China: An Insider's Account of the China Production Game” by Paul Midler (2011), due to intense rivalry in the automotive industry, the draw of low cost labour has led to companies investing in Chinese production but quality problems is the price they have to pay for the benefit of reducing their product cost.

Ford’s reaction to mitigate the negative effects of foreign production is to seek insourcing and this would mean that plants in China would have to be downsized or shut-down. With that, human resource issues will have to be carefully handled to prevent any further loss in image due to public backlash.

Laying Off Workers

Before the commencement of insourcing, Ford’s HR staff will have to prepare processes and guidelines that will mitigate the effects of lay off (Boyle, 2001). The most important rule before a lay off is to kill all rumours and announce the parent company’s decision of a lay off.

Transparency is the key as the lack of it will result in fear and uncertainty settling in among the workers (Butcher, 2008). HR have to communicate the purpose of doing so to allow them to rationalise the situation and it should be done in a formal setting such as an official email from the