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RUNNING HEAD: FORD MOTOR COMPANY SURVIVES

Antoinette Johnson
Reyte On Publishing Copyright 2009
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History of Ford Motor Company and growth over time

Edsel Ford races with Alexander Winton in vehicle he built and gets investors interest to start

Henry Ford Company in 1901. The Model A car is built in Detroit in 1903. The number #1

automaker, Ford sells more cars than GM in 1906. The Model T is first designed and becomes

hugely popular in 1908. Ford goes global and opens a plant in England in 1911. Ford loses

ground and becomes #3 automaker in 1933. Henry Ford II comes on board during the war in

1943. Ford goes public in 1956 under Henry Ford II. Legendary Ford Thunderbird born 1954

followed by the Mustang produced ten years later (Davis, 2003). Global expansion as Ford of

Europe is organized in 1967. Ford takes over #2 spot as the 2nd largest automaker. Lee Iacocca

becomes President at Ford in 1970. Ford invests in Mazda after Henry Ford II retires. After

Edsel Ford II and William Clay Ford Jr. succeed retiring Henry Ford II who joins his dad on the

board of directors. Ford decides to acquire Jaguar and start up their own financial services

division in 1989. Another joint venture as Ford decides purchases Jaguar (Davis, 2003). The next

acquisition involves a joint development of their first mini-van with Nissan. In 1996 the

milestone is reached of the building of the 250 millionth vehicle for Ford Motor Co. The year of

the SUV as Navigator becomes a hot item for Ford Motor Company in 1997. In 1999 Ford

acquires Volvo and its first electric car. Ford Thunderbird released in retro style in 2001. Total

reorganization as Nasser resigns and Bill Ford Jr. becomes CEO. The Rouge River Plant totally

refabricated to produce all Multi-Ford car lines using uniform parts to save production and

manufacturing costs in 2003. 2008 Bill Ford Jr. steps down and Board selects Alan Mulally as

new CEO for a new Ford Motor Company built on a Ford united platform (Davis, 2003).

The company structure and control system and how they match its strategy. SWOT Analysis.
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Strengths

• Global Company – Ford is a global company with manufacturing in the North and South
America, Germany, England plus joint ventures with Japan and Nissan.

The Ford (Family Tradition-CEO 100 Years) has owned and managed a major hand in the
company.

• Bill Ford Jr. introduces major cost cutting measures at just the right time 2003.

New ideas turn out good for the company -Reverse Engineering on Taurus Made in Best in
Class

• Voip --Saves money on phone costs. Use of telecomm through Computers

• Ford remains Innovator in the Industry:

• VideoConferencing to hold meetings across the country in several locations

• simultaneously saving travel costs and reducing time to market

• Computer Aided Design

Engineering Portal allows design engineering to collaborate on CAD designs and to share
information, ideas, and prototyping plans

F-150 State of the Art Facility with totally wireless assembly

• Capitalized on profits enjoyed 2001-2004 by reinvesting in the company

It reduced overheads, cut product expenditures and slashed warranty costs. At the same time,
it boosted revenues by targeting incentives and increasing the mix of high-profit vehicles,
such as sports utility vehicles (SUVs) with four-wheel-drive packages" (Taylor 10).

Weaknesses

• Struggling with sales due to weak designs.

• 1st Quarter loss in 2009 of $1.4 billion.

Opportunities
• Capitalize on the fact that they are the only auto co. of the big three that
did not have to take a buyout and are not facing bankruptcy. Buyers attracted to Ford being
best able to provide quality and reliability versus nearly bankrupt GM and Chrysler.

• Offer better deals on buying Ford vehicles with incentives

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• Offering fuel efficient vehicles

• Offering lower priced vehicles

• Become a pacesetter and innovator in the industry

• Come up with new designs that beat the competition in style, performance and value

Threats

• Foreign Competition. Toyota, Nissan are still strong and rank among the top vehicles in U.S.

• Losing Market Share – The designs from 2003-2004 were too bland and the consumer was
not impressed with Ford’s lineup.

The company structure and control system and how they match its strategy

Ford Motor Company is composed of two major Strategic Business Units (SBU). The

Automotive and Financial Services SBU. The Financial Services SBU is Ford Motor Credit that

handles all of the credit financing related to purchasing their vehicles. The other SBU, for

Automotive covers the design and manufacturing and selling of cars, trucks, and their

components or parts. This also includes warranty and the servicing of these vehicles. As recent

as 2003 Ford Motor Company reorganized its Automotive SBU into foreign versus domestic

holdings. The Americas sector consists of North and South America and their focus is on the

distribution of the nameplate Mercury, Ford, and Lincoln. The International sector handles all

sales and service outside the Americas (Hammonds, 2009).

The idea to try reverse engineering further helped Ford to reduce costs and create an award-

winning vehicle in the Taurus. By examining the end product of its competitors on the same

body class, Ford built better parts and was able to build a Best in Class Vehicle in the Taurus.

Beating out competitors.

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Some of the strategies are CAD or computer aided designs to build car components. As well as

shop floor robotics such as a wireless assembly plant.

In house the use of an engineering portal to share information, designs, and meetings online in

real time have saved time and money for the company. The use of Voice Over I P or (VOIP) has

reduced telecommunications expenses drastically.

Since 2003 there have been many new concessions required to maintain the tenuous stability due

to the economic downturn. In 2006 a major decision in leadership was made moving to bring a

CEO to lead the company. Alan Mulally came on board from Boeing to steer the company into a

new era. Prior to this decisive move Ford reduced headcount by 30,000 and closed down their

brands that were not selling in additions to closing several plants (Hammonds, 2009).

Recommendations for the company

Bill Ford is focused and poised to bring Ford Motor Company back from the brink. He has a

vision that encompasses a desire to contribute its part to strengthening America’s economy. He

says, "Our vision for the future is simple: We want to build great products, a strong business,

and a better world” (Ford.com, 2009). The company has an aggressive agenda to reduce costs

and have done so strategically since 1997. This started to compete more directly with

competitors Daimler Chrysler and General Motors, as well as Toyota and other brands. The first

wave of cuts revolved around streamlining production and manufacturing processes. No longer

would there be multiple designs of the same part for each vehicle. The same part now goes in all

of their vehicles, standardizing parts saves millions annually.

Mulally steered clear of the government bailout as they were able to get $25 billion in credit

without this domestic aid.

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In addition the internal culture of the organization has had to make some major changes. Prior

to Mulally, the company had divisions within its ranks. Car pitted against the truck departments

and different engineers and designers competing within the same teams. No more, Mullally has

led the organization to make a change in color that Ford is “One Ford, one team, one plan and

one goal”. This attitude is totally new in a culture that was very competitive internally in the

past (Hammonds, 2009).

Financial analysis of the company present financial condition

At the end of the first quarter 2008 Ford turned a profit. For the same period in 2009 however,

Ford has loss $1.4 billion. This is still seen by industry experts as only half the loss expected

according to Vaughn of WDET Talk Radio in Detroit. Leading officials at Ford Motor Company

are now saying Ford will be able to pull through 2009 without assistance from the government

(Vaughn, 2009).
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References

Davis, M. (2003). A History of the Ford Motor Co. Retrieved April 26, 2009 from

http://www.post-gazette.com/pg/09116/965408-185.stm?cmpid=business.xml

Hammonds, D. (2009). Ford Vision Makes it the Survivor, So Far. Retrieved April 26, 2009

from http://www.post-gazette.com/pg/09116/965408-185.stm?cmpid=business.xml

Vaughan, J. (2009). Ford Loses $1.4 Billion in First Quarter. Retrieved April 26, 2009 from

http://wdet.org/article/ford-loses-14-billion-in-first-quarter/