Ford and GM: Big Cuts for a Brighter Future?

How students are being affected by the recent Ford and GM layoffs, and why the layoffs might be occurring

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Ford and GM: Big Cuts for a Brighter Future?

Ford and General Motors are both facing job cuts, which affects students and community members in Metro Detroit.

Ford and General Motors are both facing job cuts, which affects students and community members in Metro Detroit.

Courtesy of nepp.gov

Ford and General Motors are both facing job cuts, which affects students and community members in Metro Detroit.

Courtesy of nepp.gov

Courtesy of nepp.gov

Ford and General Motors are both facing job cuts, which affects students and community members in Metro Detroit.

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Within the past year, Ford and GM, two of America’s biggest automobile producers, have announced massive layoffs as part of a “restructuring process.” According to Detroit News, GM will be laying off 6,000 workers on five plants, in addition to laying off 2,250 white-collar jobs.

The operation is already underway, and with GM and Ford having their beginnings in Detroit, it’s no surprise that many students have parents who work for the companies. One such student, junior Prabhnoor Ghariyal, spoke about how the news affected her family.

“I remember [my parents] coming home one day and saying, ‘we might lose our jobs, and I was like, ‘what?’” Ghariyal said. “It’s a lot because both my parents work [at GM]. Every day they would come home and they would be really stressed. My mom would be working until 12 at night or sometimes one in the morning, trying to do overtime, so [that] her chances of getting laid off [were] less.”

As a result of her parents working overtime, Ghariyal said her family didn’t get to spend much time together and that GM kept pushing back the date they would announce the fate of her parents’ jobs.

“We didn’t know where we stood financially for two months, which was really scary,” she said. “We got through it, but [we’re] still on-edge because apparently they’re going to start laying off people again.”

Many of Ghariyal’s family friends work at the company as well, which she said put additional stress on the family, although, she added, things seem fine so far.

Not only is GM laying off workers, Detroit News reported that GM was contributing $2 billion to “employee-related cuts.” Senior Kimberly Xing said her mother, who works for the company, has been affected by these cuts.

“Her phone used to be company-issued, but they took that away,” Xing said. “To compensate for taking away the phone, they replaced the trash cans [at her office building].”

Ford has only relatively recently joined GM in the announcement to restructure the company. Detroit News reported that Ford has set aside $11 billion for restructuring. The outlet estimated that this will involve a closing down of 20 plants and laying off of 50,000 workers. Ford has already begun to cut top-level jobs, with the number of layoffs being kept from the public. While Ford CEO Jim Hackett issued in a statement to Fox Business that there will be no blue-collar cuts, the future for Ford employees remains unclear, for now.

Both Ford and GM are undergoing the restructuring after declines in profit. Detroit News reported that last year, half of GM’s plants were operating below 50 percent and, according to an article by Fortune, Ford stock dropped 29 percent as well.

The Detroit News article stated that an increasing number of motor companies are turning to producing self-driving cars. GM and Ford’s revising might be to help them prepare for new types of automobiles, like the autonomous ones.

Senior Matthew Wang agrees that GM might be looking to produce a specific model of cars.

“Instead of the internal combustion engine cars, they’re focusing on trucks so [that] they don’t need to make small cars anymore, because they’re not as profitable,” Wang said.

Xing thinks a reason for the layoffs may be that the company is replacing certain jobs with artificial intelligence.

“[The computer programmers], they’re just putting in numbers, doing very mechanical tasks that can be taken over by computers,” Xing said.

According to Detroit News, GM plans to save $6 billion for the future by making the cuts now. The news outlet estimates that Ford could eventually save $25.5 billion with its changes. But whatever the reason may be, and whether or not these adjustments will end up profitable, only time can tell.

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