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The article I found is called GM, Ford Step Up Efforts to Reduce Costs in Europe. GMs Opel subsidiary in Germany has become the largest European employer and wants employees to work longer without a raise. The Jaguar unit in the United Kingdom is planning to cut productions by 15,000 cars. Jaguar is being effected by the US dollars weakness against the British pound and the euro, which undercuts the profits for European companies that export mist of there products to the US. Opel wants to move its company out of Germany to lower wage regions because they have high labor cost. The want to extent their workweek from 35 hours a week to 40 hours a week and they want to freeze works pay. Mercedes Benz was thinking about giving their workers a 2.8% raise but didnt do it instead they are making their workers work longer hours with no additional pay. The general workers union in the United Kingdom called the production cuts “a tragedy” but said that they have received assurances that there would be no job cuts as a result of production cuts.
This article touches upon many topics we had discussed in class, one is job design. The companies have had to come up with a plan to cut losses. They had to ask themselves what will be done, who will do it, how will it be done, and where will it be done. Their biggest goals here are productions and cut down on losses. In the case of Opel, the answers to those questions are simple. Producing cars is what will be done, factory works will do it, its will be done by extending the workweek from 35 hours a week to 40 hours a week without additional pay, and it will be done in eastern Europe or a lower wage region. This will lower their costs and they will still be able to produce the same about if not more cars.
Another topic this article touched on is need for location decision. The key here is cost of doing business. They need to look at long term commitments and cost; identifying locations were lower wage regions are, adding new factories and the move. The first stage is to minimize transportation