US Automobile Manufacturing

¶ … globalization and a global economy, accompanied by a certain commercial liberalization, allows for something which influences not only the automobile industry, but most industries as well: outsourcing. The example presented in the case study was quite eloquent: in Canada, workers in the automobile industry are more efficient for a lower salary. The example is remarkable, because it refers to another industrialist, strong economy and not to a third world economy.

So, as a first pointer for management practices, we need to refer to the outsourcing solution as one of the best ways to decrease overall costs and, possibly, to realize scale economies. On the other hand, globalization brings about a concerning issue in terms of human resource: cultural differences. The decision to move production to a facility in Canada is less problematic: Canada has similar behaviors and cultural traditions, while English is widely spoken throughout the country.

What happens, if, for example, costs are reduced to up to 50% if the production is moved to South America? Here, we have a different managerial culture, different approaches to the concept of work, a different language etc. In the end, in terms of human resources, adjusting and managing the human resource here implies costs that need to be accounted for.

A second thing we need to consider, following the case study as well, is the fact that the baby boomers generation is aging, which means that the characteristics of that respective entire generation are now changing, adapting to the newcomers and, in this sense, are also changing the general aptitudes and approaches of the elements in the workforce. The new generation of automobile workers brings about several challenges for the managers in the future. First of all, globalization is not only reflected economically, but also technologically.

Newer machines, better technologies are being used and it takes more and m ore skillful workers to handle them. This had a direct impact on the human resource policy, because, financially speaking, management will need to invest in the workers' technical education. Because we can expect the global economy to become more and more competitive in the future, especially cost/price competitive, the automobile industry will choose its winners among those who can make the workers work more efficiently. Efficiency may thus be considered the word of the day.

Everything that may positively contribute to increasing the company's and workers' efficiency will become an asset for the company. The human resources management will thus need to concentrate one a break-even analysis.