Globalization helps customers

If America is the place from where globalization is radiating outward, then all American industries would be secure and only rest of the world would be in trouble, but it not so. Few American industries are in dire straits and the reason for it is globalization.
Ford, America’s second largest auto maker announced yesterday that it would shutdown fourteen facilities and fire a quarter of its work force (about 30,000 people). This comes as no surprise to anyone living here. It was obvious when they started giving employee discounts to entice people to buy their cars that disaster was on its way. Employee discount which means customers can buy a Ford car for the same discounted price as employees was one of the master plans that the management came up to boost sales. Also they could not afford to stay away from the race since the other American car makers, GM and Chrysler were also offering it.
It is not just Ford which is in trouble. Chrysler which saw a dip in sales started offering free gasoline and maintenance for two years. Other are extending the warranty and soon American car makers might pay you money if you agree to take one vehicle from the showroom.
All the while the CEOs of these companies never even paused for a moment to wonder why their sales are dipping. Getting to the root cause of the problem never seems to taught in management classes here. The problem was that American car makers were making cars which the consumer did not want while Japanese car makers Toyota and Honda were successully selling cars and increasing their market share. Toyota which will soon beat GM as the world’s largest automaker outsold Chrysler in December.
In this whole episode, just having capitalism did not help the consumer, for the local capitalists did not want to build fuel efficient cars or ones with hybrid technology. The manufacturers from Japan understood the customer needs and are killing the players who could not adapt. Thanks to globalization, the American consumers are getting the vehicles they want.
Some management consultants are going to take millions of dollars and educate the American car makers something which commonsense and globalization should have taught them – listen to the customers.
Related Stories: The Toyota Story