Ryan Reiter

9-24-18

Dr. Eller

Initial Analysis of Ford Motor Company

The Ford Motor Company is an American-based automaker that produces a wide-variety

of personal and commercial cars, SUV’s, trucks & vans, and performance vehicles under the

Ford and Lincoln names. In this paper we will be discussing Ford’s operation by looking into

what products they produce, Ford’s competitors, who their consumers are and where their

customers are located, as well as how their brands and models have changed over time. We will

also analyze the future of Ford Motor Company to see where they believe they are headed and

future opportunities for Ford that lay ahead. In addition to the operations of Ford, we will also

examine Ford through a Loras Catholic Social Teaching screen using both positive and negative

screening techniques.

Currently, Ford is producing six different models of personal cars. However, in 2020 they

will only produce their Ford Mustang and the Ford Focus Active. The Ford Focus Active is

going to be a SUV like crossover of the current Ford Focus. The reason behind this is because

they want to save money, be more competitive, and increase efficiency within the company1. The

cars they are cutting from their lineups had decreasing profitability and demand. Part of the

decrease in demand comes from the US automotive market shifting towards trucks and SUV’s as

they continue to become more fuel efficient vehicles2. By cutting down their car lineup, Ford has

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Associated Press & CBS
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Shepardson
a greater ability to focus on their trucks and SUV’s, both are essential to their business as they

are the highest areas performance within the company3. Ford also produces luxury vehicles under

the Lincoln brand. Lincoln sedan sales have slipped as well as consumers move toward SUV

options. In the future, we may see Ford discontinue the Lincoln Continental and MKZ sedans.

Ford isn’t the only automaker cutting back their car lineups to make room for more profitable

vehicles. GM is cutting the Chevy Sonic, Chevy SS, and the Cadillac ATS, Chrysler has cut the

Dodge Dart, Dodge Viper, and the Chrysler 200.

Ford also sells a variety of SUV’s, crossovers, trucks, and vans for their consumers. This

segment makes up over 80% of their vehicle sales. SUV sales were up 8% from 2016 to 2017

posting record highs for the company. Truck sales maintained their 2016-2017 sales and marked

their 41st consecutive as America’s best-selling trucks. Ford trucks come available in a variety of

sizes and uses ranging from the F-150 for light weight use to larger F-750 heavy-duty trucks

used for construction and commercial purposes. In recent years, they have introduced the Ford

Raptor truck which offers a sporty performance vehicle for their consumers. Ford is also

reintroducing several vehicles that they cut from production. The Ford Ranger truck is coming

back to the market in 2019 after an eight year hiatus4. The Ranger is a mid-sized truck that give

consumers an option for a smaller more compact utility vehicle that still provides consumers

with the ability to take on a wide variety of tasks. The Ford Ranger is currently available via pre-

order on Ford’s website as they begin to undertake the production of the vehicle. Ford is also

bringing back the Bronco in 2020 after they stopped production in 1996. The Bronco is a tough

mid-sized 4X4 SUV that offers consumers a sporty, off-road capable vehicle that comfortable to

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drive on the highway and in the city5. The reintroduction of the Ranger and Bronco to the

automotive market along with Ford cutting back their production of sedans, supports their idea of

focusing on trucks and SUV’s while cars and sedans take the backseat, pun intended, of their

operations6.

Like every company in their specific industry, Ford has a several major competitors that

compete both in North America and worldwide. Some of these companies include Fiat Chrysler,

General Motors, Honda Motor Company, and Toyota. These companies produce and sell

vehicles aimed at a very similar target market that Ford sells their vehicles to including cars,

trucks, SUV’s, commercial, and electric vehicles. As we previously discussed, Ford is making an

effort to focus the majority of their operations that have the best market performance, trucks and

SUV’s, in order to remain at a competitive advantage over other auto manufacturer.

Ford sells their vehicles globally. They have sales in North America, South America,

Europe, as well in the Middle East and Asia. They have significant market shares in the

automotive industry in North America (13.9%) with the majority in the US and Canada, South

America (8.9%) with high market shares in Brazil and Argentina, and in Europe (7.5%) where

the United Kingdom and Turkey highlight their market shares in that region. The majority of

their $156.7 billion revenue came from North America with $93.8 billion. They also had $10.5

billion in revenue from Canada and $9.6 billion from the United Kingdom. Over two-thirds of

their revenue come from North America, but their sales in other areas of the world are extremely

vital to their bottom line as well7.

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Ford 10K
 As of year-end 2017, Ford has 61 manufacturing plants around the world.

Below is the breakdown of their global manufacturing plants from their 10K:

A number of their foreign manufacturing plants are consolidated joint ventures with other

foreign car manufacturers. These foreign manufacturers include Mazda, Changan (Chinese), and

Sollers (Russian). Ford also takes advantage of government incentives to place manufacturing

plants in foreign countries. An example of this can be seen in South America where the majority

of the manufacturing plants are in Brazil. The Brazilian government has offered, and continue to

offers Ford incentives that include grants, loan subsidies, and tax credits. They do so to

encourage capital investment, increased manufacturing production, and most importantly jobs for

their country. However, the incentives could be subject to change as the Brazilian government is

beginning to cutting back on grants given to Ford. In the long run, these types of cutbacks could

have a significant negative impact on Ford in Brazil and as other countries8.

We can also look at the future of Ford by examining the plans for their vehicles as well as

their company plans moving into the coming years. If we take a look at their 2017 10K we can

see that they are making an emphasis on improving their electric vehicle strategy to reduce CO2

emissions and improve fuel economy. They are working diligently to create cutting edge electric

batteries with Zotye, a worldwide leader in the production of electric batteries for vehicles. In

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January, 2018, Ford made a public announcement of an investment of $11 billion for electric

vehicle manufacturing and research. By the year 2022, Ford is expecting to make 40 electrified

vehicles and 16 full battery electric vehicles. Something that will be interesting to see play out it

how Ford will compete both in market share and technologically with Tesla, assuming Tesla is

still a company by 2022, with their electric vehicles. Ford is also a pioneer in the making of

aluminum vehicle bodies for trucks and SUV. Aluminum bodies are lighter and with less weight,

vehicles can be more fuel-efficient. Fuel efficiency is something that larger vehicles such as

SUV’s and trucks have been able to make great strides in recent years. In recent years, Ford has

also implemented the EcoBoost engine into many of their vehicles spanning from compact cars,

sedans, trucks & vans, and SUV’s. According to the Ford website, “EcoBoost engines are

designed to optimize power and efficiency”. EcoBoosts are smaller engines that are fuel efficient

without sacrificing the performance that comes with larger conventional engines of past years

source. Ford is moving towards creating fuel-efficient vehicles across all of their models as well

as making a push to create fully electric vehicles with an $11 billion investment. When we look

at Ford and their future plans as a company, a major theme they have instilled in their 2017 10K

is reducing costs and reallocating capital to markets and products that have the highest potential

to provide the company with returns and growth9. We can see this by how they are cutting their

car/sedan production to two vehicles that they believe show to most opportunities. They are

doing the same thing with their truck and SUV product lines with them reintroducing the Ranger

and the Bronco. As mentioned in the previous paragraph, Ford also sees a great opportunity in

electric vehicles as consumers are showing more interest in low/zero emission vehicles.

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 When we look at Ford through a Catholic Social Teaching screen that implements both

positive and negative screening techniques, we can get a better picture of the company to see if

they match the values of Loras and the LIFE Portfolio class. A company’s level of sustainability

is something that can be connected to several Catholic Social Teachings, Care for God’s

Creation as well as Rights and Responsibilities. Sustainability is something that Ford has been

working on in recent years and plans continuing to increase in the future. If we look into their

2017 10K, we can see several great examples of Ford moving to become a more sustainable

company. Between 2010 and 2016, Ford reduced their CO2 emission 52% for every vehicle they

produced in addition to cutting their average energy use by 25% per vehicle produced. Part of

their CO2 emissions being cut down can be tied to their use of soybean-based foam in vehicles.

Since first implementing soybean foam in 2007, they have saved over 228 million pounds of

CO2 from entering Earth’s atmosphere (Ford 10K). In 2017, Ford their “zero-waste-to-landfill”

program to 82 Ford facilities worldwide. Since implementing this program, Ford has decreased

the amount of waste 42% since 201310. By looking at Eikon’s ESG scores, specifically in the

environmental section, Ford efforts to reduce CO2 emissions and cutting back on energy use are

supported. These actions that Ford has taken in recent years are great examples of how they are

taking care of God’s creation, planet earth. Ford’s sustainability report within their 10K also

mentions their company belief that access to clean drinking water is an essential human right.

They have instilled a long-term goal of using zero drinkable water as a part of any manufacturing

process, supported also by Eikon’s ESG statement. In addition to this goal, for the third

consecutive year they have received the CDP’s highest rating for corporate water management.

This can be tied to Care for God’s Creation, people, as well Rights and Responsibilities. Catholic

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Social Teachings place in us the belief that humans have a fundamental right to life. Drinking

water is one of these rights essential to human life and Ford is a corporate world-wide leader in

allowing people utilize their human rights. In Eikon, we can look closely at Ford’s

environmental, social, and governance statements. ESG scores also provides us insight to how

they line up to Catholic Social Teaching values.

If we look at the social section of Eikon’s ESG section, we can compare Ford to the

Catholic Social Teaching, The Dignity of Work and the Rights of Workers. This Catholic Social

Teaching tells us that, “the economy must serve the people” and the basic rights of their

employee’s needs to be met such as the right to productive work and fair wages. Eikon gives

Ford an A+ rating for the human rights section of their social score within the ESG. Within the

human rights section we can see that Ford complies with the United Nations’ Declaration of

Human Rights. Also within the social section of their ESG, we can see that Ford is not involved

with any armaments, or the production of vehicles used by the military. This is an essential

element to one of the key Catholic Social Teaching principles, Life and Dignity of the Human

Person. The Life and Dignity of the Human Person principle calls us to work to avoid war and

resolve issues and conflicts by using peaceful means. Ford is a company that avoids war

altogether and does not product vehicles for the military, even though they very well could if

they desired. Overall, the social pillar is the highest scoring ESG segment Ford has with a score

of A+.

Ford also can be tied into several other Catholic Social Teachings, including Option for

the Poor and Vulnerable and Call to Family, Community, and Participation. In 2017, Ford

dealerships gave more than $110 million to charitable causes. The majority of their contributions
went to helping first responders, scholarships, and children’s causes11. In addition to this, Ford

dealers donated over 50,000 hours of volunteering to their communities. Some of their 2017

community contributions include $36.8 million to enhancing community well-being, $18.4

million to education and scholarships, and $7.8 million to driving safety12. These actions are

direct implementations of Call to Family, Community, and Participation. People have the duty

and the right to participate in their communities in order to facilitate the common good and well-

being of others, especially those who need it the most, the poor and vulnerable13.

In addition to the positive screens we have discussed, we must also look at the negative

screens. The majority of their negative issues can be seen from their ESG controversies score on

Eikon, their score is a D-. Upon first inspection this seems very bad, however their score can be

primarily drawn to the recalls they have had over the years. Recalls range from the “door ajar

light” being on while the doors are actually shut, defective airbag inflators, and braking issues.

Other factors going into their ESG controversies score are allegations of possible cheating on

emission tests, past environmental issues resurfacing like soil contamination, and delays in

production of their new F-150 trucks due to issues with their transmissions. In Eikon, we can

look at many of Ford competitors like Fiat Chrysler, Toyota, and General Motors are facing the

same issues that also negatively impact their ESG controversies score so we can see that these

issues are industry wide rather than just impacting Ford alone. When we take all of the positive

screens and negative screens together, we can see the majority of the screens point to Ford

following Catholic Social Teaching principles.

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Ford
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Ford Fund
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USCCD
 Throughout this paper we have examined Ford Motor Company’s operations and how

they as a company fit into the Catholic Social Teaching principles we need to implement as a

Catholic institution. We have examined Ford by the vehicles they produce and will continue to

produce as well as where they produce their vehicles across the world. The future of Ford, both

in their vehicles and as a company is something we also examined as Ford is making big plans to

further increase the efficiency of their vehicles, investing in electric vehicle technology, is

continuing to become more sustainable. When we look at Ford through Catholic Social Teaching

screens, we can see that Ford’s values as a company compliment Catholic Social Teaching very

well. They make an effort to be involved in participate in communities through donations of

money and more importantly volunteer time. They also are actively reducing their emissions,

waste, and energy consumption and in return showing care for God’s creation. Ford also

provides their workers with the human rights that must be protected by corporations. Overall,

Ford is a company that has a very promising future both as a company as well as vehicles they

produce and line up with Catholic Social Teaching principles.

 Sources:

Ford Fund. (2018). The Ford Motor Company Fund. Retrieved September 24, 2018, from
https://corporate.ford.com/company/community/ford-fund.html

USCCB. (1998). Seven themes of Catholic Social Teaching. Retrieved September 24, 2018, from
http://usccb.org/beliefs-and-teachings/what-we-believe/catholic-social-teaching/seven-themes-
of-catholic-social-teaching.cfm

Associated Press & CBS. (2018, April 26). Mustang, Focus crossover will be only Ford cars on the market
in North America by 2020. Retrieved September 24, 20, from
https://www.cbsnews.com/news/ford-motor-company-mustang-focus-survive-shedding-car-
brands-fusion-taurus-fiesta-earnings-today-2018-04-25/

Ford 10K. (2018). Ford Motor Company 2017 Annual Report. Retrieved September 24, 2018, from
https://s22.q4cdn.com/857684434/files/doc_financials/2017/annual/Final-Annual-Report-
2017.pdf.

Ford. (2018, March 22). FORD MOTOR COMPANY’S U.S. DEALERS GAVE MORE THAN $110 MILLION `
TO CHARITABLE CAUSES IN 2017. Retrieved September 24, 2018, from
https://media.ford.com/content/fordmedia/fna/us/en/news/2018/03/22/ford-motor-
companys-us-dealers-gave-more-than-110-million-to-charitable-causes.html

Shepardson, D. (2018, January 11). U.S. vehicle fuel economy rises to record 24.7 mpg: EPA. Retrieved
September 24, 2018, from https://www.reuters.com/article/us-autos-emissions/u-s-vehicle-
fuel-economy-rises-to-record-24-7-mpg-epa-idUSKBN1F02BX

Woodard, C., & Perkins, C. (2018, May 14). Everything We Think We Know About the 2020 Ford Bronco.
Retrieved September 24, 2018, from https://www.roadandtrack.com/new-cars/future-
cars/a31079/new-ford-bronco-ranger-details/