UNIVERSITY OF LUZON

COLLEGE OF ACCOUNTANCY
Dagupan City
 UNIVERSITY OF LUZON
COLLEGE OF ACCOUNTANCY
Dagupan City

FORD MOTOR COMPANY

(CASE STUDY)
LEADER:

BARCELO, JENNYFER

MEMBERS:

CASTRO, ELLA MAE

DISO, LILIBETH

IGNACIO, MADELYN JANE

MANUEL, MICHELLE

MENESES, KRISTEL

PASTORIN, ALONDRA

SISON, AYDA YLLA

REYES, CRISTIAN

BSAT BLOCK D (MWF: 8:00 – 9:00)

MR. DANTE NARCISO

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Executive Summary
Mission statement: “Ford motor company is a worldwide leader in automotive
and automotive – related products and services as well as in newer industries such as
aerospace, communications and financial services. Our mission is to improve continually
our products and services to meet our customer’s needs, allowing us to prosper as a
business and to provide a reasonable return for our stockholders, the owners of our
business”

Vision statement: “To become the world’s leading consumer company for
automotive products and services”

Existing strategy: Ford business strategy is reflected in the plan “One Ford” which
was started by CEO Allan Mullaly in 09/2006. The purpose of “One Ford” is helping the
company to expand market share and bring success for Ford across the globe

 “One Ford” is the 4 point strategies

 Restricting the business to maintain profitability
 Providing the development of new product
 Implementation of policies on financial balance
 Improving moral and strength of teamwork

However, the cux of is that it encourage the concentration of labor, positive work in
groups and to direct all of its employees to the common goal of the groups success on the
global market.

The result is OF gives communities the most sustainable value, expressed in:

 Good product
 Strong business
 A better world

In addition, Ford Motor always directed all his actions according to slogan that the
company has put out “Go Further”. To do this, the product of Ford cars would have to be
very diverse in terms of price, demand and use to fit consumers globally
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Products
Being born from the factory specializing in the repair trucks, Ford’s main production
areas are operations and sales of motor vehicles and parts. In addition to financial services
related to the car, car rental and other services directly related to the car. It has a large –
scale production lines in the world, because the newly formed Ford quickly capture the
market, by the end of 1913, Ford is 50% of vehicles in the US market, the first half of 1918,
all US automotive suppliers are Ford Model T in 1999, Ford was named one of car
manufactures, triggering the biggest profit. As the fourth leading automotive
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manufacturers Ford and Toyota General Motors and Volkswage Ag product line of Ford
divide into four sections: cars (Fiesta, Mustang, C – Max, Focus, Fusion, Taurus) Crossovers
and SUVs(Escape, Edge, Transit, Super Duty), and last one is Lincoln( luxury cars) includes
Navigator, MKC, MKZ, All – New Lincoln MKX)in the report late last year, Ford said HAD
total production vehicles sold in 2014 to 220,671 last month. This figure marks a 1%
increase over December 2013 sales and brings the company’s full – year U.S. auto sales to
2,480,942 units sold (a figure that is flat compared to full – year 2013 sales).

Competition and Market Conditions Currently faced by the

Company
The automotive industry is noted for its intense rivalry, and within the United States
market Ford faces five major competitors: GM, Toyota, Chrysler, Honda and Nissan. Toyota,
Honda and Nissan have grown in market share largely as a result of their ability to deliver
better products at lower prices, particularly for more fuel efficient smaller vehicles.
Because of lower labor costs and greater efficiency (typically measured by the number of
hours need to produce each vehicle), these companies have been able to turn a profit with
smaller vehicles. In the past, Ford has differentiated itself by focusing on more profitable
SUV and truck lines while often losing money on its smaller vehicles. Given changing
demand, this strategy is no longer feasible. Within Europe, Ford’s main competitors are
Volkswagen, PSA (Peugeot), Renault, GM, and Fiat. Volkswagen is the dominant producer in
the region, and has seen strong growth in the past four years. Ford experienced much
greater success at turning a profit on small vehicles in the region, and the “One Ford”
strategy intends to take advantage of this. Overall, Ford has managed to remain
competitive in Europe by designing cars which appeal to European tastes and by increasing
the quality ratings of its vehicles. This has led to stable market share and profits over the
past three years, and is demonstrative of Ford’s stability to achieve success with smaller
vehicles.
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The purpose of the following report is to identify the most significant problems facing
the Ford Motor Corporation and recommend a course of action that most adequately
resolves the challenges of today’s marketplace. It begins by outlining three of the major
challenges facing the Ford Motor Company.

Statement of the Problem

Why Ford’s current business plan is not as financially and environmentally
sustainable as it could be?
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Objective of the Problem

 Ford must work to create sustainable models in all vehicle classes. These
models must compare to conventional counterparts in terms of ticket price. On
top of this, Ford must ensure that public infrastructure can adequately support
these innovations so that consumers are not burdened with new operating
complications, costs, or maintenance issues.
 Continue to develop and implement our sustainable materials strategy –
focused on materials that have been obtained by socially sustainable means,
that have lower environmental impacts and that provide equivalent or
superior performance to existing materials.

Alternative Courses and Action

The report then presents an ethical screen outlining the moral considerations this
course of action entails. While the creation of a more sustainable business model builds
upon Ford’s ethical commitments, the loss of jobs resulting from proposed production and
retail facility closures conflicts with these principles. And while a course of action that
brings about greater job losses to Ford employees is less than ideal, it arises from market
conditions. Lack of action may result in even greater job losses on a long-term scale. In this
way, the recommended course of action resonates with the ethical commitments outlined
in Ford’s Mission Statement.

A feasibility report discusses Ford’s ability to achieve these goals. As of 2007, the Ford
Motor Company maintained the second highest R&D budget in the world, with a hybrid
vehicle program already well underway. In the year 2000, Ford unveiled the first U.S. made
hybrid-vehicle, an accomplishment that sets Ford apart from its U.S. competitors. This
report concludes that Ford possesses adequate resources and abilities to reach these new
goals.

A cost-benefit analysis then weighs potential losses against gains that may arise from
this plan. The proposed course of action is high-risk is cost-intensive, however the potential
benefits of increased income outweigh the expenditures Ford stands to lose while pursuing
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this goal and the equally high-risk option of failing to act on this pressing challenge and
opportunity.

Finally, the report outlines a preliminary budget, timeline, and a step-by-step course
of action. Overall, the proposed plan is intended to cost Ford little in terms of net
expenditure, and should be completed in its entirely by the year 2015.

Analysis
Ethical screen. The notion of a more environmentally friendly Ford Motor Company
is not only ethically compatible with Ford’s Mission Statement, it reaffirms and builds upon
it. At the same time, there are consequences to this course of action that contain further
ethical considerations. Due to the proposed closing of several production and retail
facilities, a number of Ford employees stand to lose their jobs. This move is extremely
unwelcome in a nation with an unemployment rate already averaging 9.7% (Bureau of
Labor Statistics). Ford stands to suffer from bad publicity and to potentially contradict the
ethical commitments outlined in its mission statement.

This course of action, however, is necessitated by recession markets and does not
represent the ultimate intentions of the Ford Motor Company. The strategy of creating a
more sustainable Ford is intended to protect the job security of all Ford employees on a
long-term basis (i.e. the creation of a more sustainable business model). It is the conclusion
of this report, therefore, that this course of action complies with and upholds the ethical
commitments outlined in Ford’s mission statement.

Feasibility analysis. In terms of pure research, hybrid technology is fairly well

understood and is already utilized by the Ford Motor Company. Focus must be placed on
improving hybrid efficiency, performance, and reliability, as well as maintaining affordable
costs to consumers. Furthermore, Ford’s R&D facilities are top-notch and already working
to develop Ford’s hybrid program. As of 2007, Ford had the second-largest research and
development budget in the world at approximately $8 billion annually (Vijayenthiran).
Additionally, Ford was the first auto-manufacturer to offer a U.S.-made hybrid vehicle (in
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the year 2000) (Carr-Ruffino and Acheson). Based on this information, it is entirely feasible
that Ford can produce additional landmark models in the near future provided that
adequate resources and proper strategies are applied towards revamping its current
hybrid R&D program.

Cost-Benefit Analysis. There are a number of initial costs that Ford must account for
in order to properly execute this course of action. Costs must be covered immediately and
will rely on the success of several preliminary budget-saving steps. That said, the total price
of developing hybrid models for all vehicle classes is intended to be accounted for through
internal budget recoveries; reductions in production costs are meant to reduce the need for
increased net spending.

The potential benefits of these investments far outweigh initial costs, but are long-
term and may not bring significant returns until the entirety of the plan is completed. And
while this proposal is financially risky, the current problems facing the Ford Motor
Company – its potential inability to respond to the challenges and opportunities of a
changing marketplace – are dire enough that the competitiveness of the company itself is at
risk. In this sense, these costs should not only be considered investments, but preventative
measures.

Costs: public relations campaign: $300 million annually – includes costs due to advertising
in print, television, radio, and internet media, partnerships with non-profit organizations,
market research, and product promotions; revamped R&D facilities: $700 million annually
– includes costs due to equipment, larger research/design staff, new/upgraded facilities,
fair-use of patents and other legal expenses, materials, and partnerships with technology
firms, government research groups, and NGOs. Total costs: approximately $1 billion
annually for the next five years.

Monetary benefits: A report from 2009 estimates that by 2015 the global hybrid
vehicle market will have risen by 31.3% and be valued at around $67.7 billion (Global
Markets Direct). In 2009 the U.S. market comprised 47.5% of all hybrid vehicles sold
worldwide (or a predicted $32.16 billion annually in 2015, if the U.S. market share remains
the same). Of these 2009 sales, Toyota has currently sequestered the highest market share
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of 72% percent (R.L Polk & Co.). If Ford succeeds in obtaining the highest U.S. market share
in prospected hybrid sales by 2015 – and if this market share is roughly the same as
Toyota’s first-ranked share in 2009 – Ford could earn up to $23.15 billion in hybrid vehicle
sales in 2015 in the U.S. alone (72% of $32.16 billion). While this estimate is extremely
rough and represents a very high performance in terms of Ford’s future hybrid sales, it
illustrates the potential monetary benefits that may result from focusing on hybrid
development over the next several years.

Other benefits: Financial and environmental sustainability should be considered

tremendous benefits in their own right. It is through both that Ford ensures future
competitiveness and remains true to its Mission Statement.

Finding and Conclusion

The challenges facing the Ford Motor Company are great, but will be overcome
through innovation and an increased dedication towards environmental and financial
sustainability. Ford has repeatedly acted as a revolutionary force throughout history, and it
is only through equally radical revolutions and innovations that Ford can help usher a new
era in the global automotive industry.

Recommendation
This report recommends the following steps to achieve success in its goal of creating
a more sustainable Ford Motor Company. First, Ford must begin a PR campaign focused on
educating consumers about the current status of the automotive industry and to raise
awareness about the future Ford is helping to build. The campaign should focus both on
consumers who, in general, already look favorably on hybrid vehicles, as well as those who
may be skeptical about hybrid performance, cost, and feasibility on a larger scale. Ford
must use this campaign to unveil to consumers its five-year plan to create a more
sustainable Ford. This should begin immediately and be fully operational after a transition
period of no more than four full quarters. Ford should continue this campaign until the
Ford brand is synonymous with sustainability. A total of around $300 million per year
(from an estimated $1 billion gleaned annually from facility closures) will be allocated
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towards the development and maintenance of this new PR campaign. Market research
teams will evaluate the success of this campaign twice per quarter. The PR campaign will
be considered a success once the Ford brand is recognized above all global competitors as
the leader in sustainability and hybrid vehicle production.

Second, Ford must begin to significantly scale back production. This should be
completed within the next four quarters. While the PR campaign should begin immediately,
it may take several months for Ford to assess which production and retail facilities are
most extraneous. Qualified workers can be transferred to different positions at R&D
facilities and public relations departments (Ford will begin recruiting internally). This step
will be considered successful once Ford has reduced its production costs by a goal of
around $1 billion annually. Managers will monitor the progress of facility closures with
goals set at reducing operating costs by about $250 million annually per quarter for the
next four quarters.

Third, Ford must immediately direct newly acquired funds towards revamping its
R&D program and focusing this program upon the development of hybrid technologies.
This should be completed within the next four quarters and will utilize an additional $700
million annually (gleaned from the estimated $1 billion in reduced annual operating
expenses). Achievement teams will assess the growth of Ford’s hybrid R&D program twice
per quarter, ensuring that a gain of at least $175 million in addition annual R&D funds are
available at the end of each quarter.

Fourth, Ford must begin to develop relationships and partnerships with leading
energy firms. By creating cooperative R&D facilities – where research tasks, budgets and
innovations are shared – Ford stands to make significant strides at lower costs and
accelerated rates. By sequestering their cooperation early on, Ford stands to gain a
competitive edge against competitors. Ford must gain cooperative relationships with the
majority of leading energy and engineering firms – such as General Electric and Lockheed
Martin – as well as non-government organizations and federal research groups like the
EPA’s National Vehicle and Fuel Emissions Laboratory (NVFEL) in Ann Arbor, Michigan
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(U.S. Environmental Protection Agency). Costs and evaluations will be incorporated into
expanded R&D departments.

Fifth, Ford must unveil several new models of hybrid vehicles in all vehicle class
types. This should be accomplished completely by 2015, followed by the eventual
discontinuation or transformation of existing conventional-engine-models in years to
follow. Hybrid models should cost no more than current conventional counterparts, and
perform comparatively. Vehicle design budgets will be incorporated into expanded R&D
departments.

History of Ford Motor Company

Ford Motor Company is an American automaker and the world's fifth largest
automaker based on worldwide vehicle sales. Based in Dearborn, Michigan, a suburb
of Detroit, the automaker was founded by Henry Ford, on June 16, 1903. Ford Motor
Company would go on to become one of the largest and most profitable companies in the
world, as well as being one of the few to survive the Great Depression. The largest family-
controlled company in the world, the Ford Motor Company has been in continuous family
control for over 110 years. Ford now encompasses two brands: Ford and Lincoln. Ford
once owned 5 other luxury brands: Volvo, Land Rover, Jaguar, Aston Martin and Mercury.
Over time, those brands were sold to other companies and Mercury was discontinued.

Foundation
Henry Ford built his first automobile, which he called a quadricycle, at his home in
Detroit in 1896. The location has been redeveloped, where the Michigan Building now
stands, and the tracks for the Detroit People Mover and the Times Square People Mover
station are nearby. At the entrance to the Michigan Building, there is a commemorative
plaque identifying the original location of the Ford home. The coal shed has been recreated
using the original bricks at Greenfield Village in nearby Dearborn.[1] His initial foray into
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automobile manufacturing was the Detroit Automobile Company,
founded in 1899. The company foundered, and in 1901 was reorganized as the Henry Ford
Company. In March 1902, after falling out with his financial backers, Ford left the company
with the rights to his name and 900 dollars. Henry Ford turned to an acquaintance, coal
dealer Alexander Y. Malcomson, to help finance another automobile company. Malcomson
put up the money to start the partnership "Ford and Malcomson" and the pair designed a
car and began ordering parts. However, by February 1903, Ford and Malcomson had gone
through more money than expected, and the manufacturing firm of John and Horace Dodge,
who had made parts for Ford and Malcomson, was demanding payment. [2] Malcomson,
constrained by his coal business demands, turned to his uncle John S. Gray, the president of
the German-American Savings Bank and a good friend. Malcomson proposed incorporating
Ford and Malcomson to bring in new investors, and wanted Gray to join the company,
thinking that Gray's name would attract other investors. Gray was not interested at first,
but Malcomson promised he could withdraw his share at any time, so Gray reluctantly
agreed. On the strength of Gray's name, Malcomson recruited other business acquaintances
to invest, including local merchants Albert Strelow and Vernon Fry, lawyers John Anderson
and Horace Rackham, Charles T. Bennett of the Daisy Air Rifle Company, and his own
clerk James Couzens.[2]Malcomson also convinced the Dodges to accept stock in lieu of
payment. On June 16, 1903, the Ford Motor Company was incorporated, with 12 investors
owning a total of 1000 shares. Ford and Malcomson together retained 51% of the new
company in exchange for their earlier investments. When the total stock ownership was
tabulated, shares in the company were: Henry Ford (255 shares), Alexander Y.
Malcomson (255 shares), John S. Gray (105 shares), John W. Anderson (50 shares), Horace
Rackham (50 shares), Horace E. Dodge (50 shares), John F. Dodge (50 shares), Charles T.
Bennett (50 shares), Vernon C. Fry (50 shares), Albert Strelow (50 shares), James
Couzens (25 shares), and Charles J. Woodall (10 shares).

At the first stockholder meeting on June 18, Gray was elected president, Ford vice-
president, and James Couzens secretary.[2] Despite Gray's misgivings, the Ford Motor
Company was immediately profitable, with profits by October 1, 1903 of almost $37,000. A
dividend of 10% was paid that October, an additional dividend of 20% at the beginning of
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1904, and another 68% in June 1904. Two dividends of 100%
each in June and July 1905 brought the total investor profits to nearly 300% in just over 2
years; 1905 total profits were almost $300,000.[2]

However, there were internal frictions in the company that Gray was nominally in
charge of. Most of the investors, both Malcomson and Gray included, had their own
businesses to attend to; only Ford and Couzens worked full-time at the company. The issue
came to a head when the principal stockholders, Ford and Malcomson, quarreled over the
future direction of the company. Gray sided with Ford. By early 1906 Malcomson was
effectively frozen out of the Ford Motor Company, and in May sold his shares to Henry
Ford. John S. Gray died unexpectedly in 1906, and his position as Ford's president was
taken over by Ford himself soon afterward.

Ford was subject to lawsuits or threats from the Association of Licensed Automobile
Manufacturers early in its history. The Association claimed patent rights to most gasoline-
powered automobiles. After several years of legal wrangling, the Association eventually
dropped its case against Ford in 1911. Early developments and assembly line.

The coal shed on Bagley Street, Detroit where Henry Ford built his first car in 1896.

During its early years, the company produced a range of vehicles designated,
chronologically, from the Ford Model A (1903) to the Model K and Model S (Ford's last
right-hand steering model)[4] of 1907. The K, Ford's first six-cylinder model, was known as
"the gentleman's roadster" and "the silent cyclone", and sold for US$2800; by contrast,
around that time, the Enger 40 was priced at US$2000, the Colt Runabout US$1500, the
high-volume Oldsmobile Runabout[8] US$650, Western's Gale Model A US$500, and
the Success hit the amazingly low US$250.
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In 1908, Henry Ford introduced the Model T. Earlier
models were produced at a rate of only a few a day at a rented factory on Mack
Avenuein Detroit, Michigan and later at the Piquette Avenue Plant (the first company-
owned factory), with groups of two or three men working on each car from components
made to order by other companies (what would come to be called an "assembled car"). The
first Model Ts were built at the Piquette Avenue Plant and in the car's first full year of
production, 1909, just over 10,000 Model Ts were built. As demand for the car grew, the
company moved production to the much larger Highland Park Plant in 1910. In 1911,
69,762 Model Ts were produced, with 170,211 in 1912. By 1913, the company had
developed all of the basic techniques of the assembly line and mass production. Ford
introduced the world's first moving assembly line that year, which reduced chassis
assembly time from 12 1⁄2 hours in October to 2 hours 40 minutes (and ultimately 1 hour
33 minutes), and boosted annual output to 202,667 units that year. After a Ford ad
promised profit-sharing if sales hit 300,000 between August 1914 and August 1915, sales
in 1914 reached 308,162, and 501,462 in 1915; by 1920, production would exceed one
million a year. These innovations were hard on employees, and turnover of workers was
very high, while increased productivity reduced labor demand. Turnover meant delays and
extra costs of training, and use of slow workers. In January 1914, Ford solved the employee
turnover problem by doubling pay to $5 a day cutting shifts from nine hours to an eight-
hour day for a 5-day work week (which also increased sales; a line worker could buy a T
with less than four months' pay), and instituting hiring practices that identified the best
workers, including disabled people considered unemployable by other firms. Employee
turnover plunged, productivity soared, and with it, the cost per vehicle plummeted. Ford
cut prices again and again and invented the system of franchised dealers who were loyal to
his brand name. Wall Street had criticized Ford's generous labor practices when he began
paying workers enough to buy the products they made.
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Ford assembly line (1913).

While Ford attained international status in 1904 with the founding of Ford of Canada,
it was in 1911 the company began to rapidly expand overseas, with the opening of
assembly plants in Ireland (1917), England and France, followed by Denmark (1923),
Germany (1925), Austria (1925), and Argentina (1925). A factory was opened in Japan
(1925) at Yokohama, and also in South Africa (1924) and Australia (1925) as subsidiaries
of Ford of Canada due to preferential tariff rules for Commonwealth countries. By the end
of 1919, Ford was producing 50percent of all cars in the United States, and 40% of all
British ones; by 1920, half of all cars in the U.S. were Model Ts. (The low price also killed
the cycle car in the U.S.) The assembly line transformed the industry; soon, companies
without it risked bankruptcy. Of 200 U.S. car makers in 1920, only 17 were left in 1940.

Ford 1916 Model T Field Ambulance. This canvas on wood frame model was used
extensively by the British & French as well as the American Expeditionary Force in World
War I. Its top speed was 45 mph (72 km/h), produced by a 4-cylinder water-cooled engine
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It also transformed technology. Henry Ford is reported to
have said, "Any customer can have a car painted any colour that he wants so long as it is
black." Before the assembly line, Ts had been available in a variety of colours, including red,
blue, and green, but not black. Now, paint had become a production bottleneck; only Japan
Black dried quickly enough, and not until Duco lacquer appeared in 1926 would other
colours reappear on the T.

In 1915, Henry Ford went on a peace mission to Europe aboard a ship, joining other
pacifists in efforts to stop World War I. This led to an increase in his personal popularity.
Ford would subsequently go on to support the war effort with the Model T becoming the
underpinnings for Allied military vehicles, like the Ford 3-Ton M1918 tank, and the 1916
ambulance.

Post-World War I developments

By 1916, the company had accumulated a capital surplus of $60 million, but Henry
Ford declared that he intended to end special dividends for shareholders in favour of
massive investments in new plants, including the River Rouge plant, allowing Ford to
dramatically increase production, and the number of people employed at his plants, at the
same time as cutting the prices of his cars. The Dodge brothers, John Francis
Dodge and Horace Elgin Dodge, the largest non-family shareholders, with 10% of the
company, objected and took Ford to court in 1917 in an often cited case, Dodge v. Ford
Motor Company. The judge found in their favour requiring a $19million special dividend.
The decision was then upheld in the 1919 appeal to the Michigan Supreme Court which
stated that:

A business corporation is organized and carried on primarily for the profit of the
stockholders. The powers of the directors are to be employed for that end. The discretion of
directors is to be exercised in the choice of means to attain that end, and does not extend to
a change in the end itself, to the reduction of profits, or to the non-distribution of profits
among stockholders in order to devote them to other purposes...
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In response Henry Ford determined to buy out the
remaining shareholders. To encourage this, he threatened to leave and set up a rival
company, offering to buy out the minority shareholders, at varying prices. He gained
complete control in July 1919 at a cost of $125 million, made up of $106 million of the stock
and $19 million in court-ordered dividend, financed with a $75 million loan from two
eastern banks. The Dodge brothers received $25 million. At this time Edsel Ford also
succeeded his father as president of the company, although Henry still kept a hand in
management. While prices were kept low through highly efficient engineering, the
company used an old-fashioned personalized management system, and neglected
consumer demand for improved vehicles. So, while four-wheel brakes were invented
by Arrol-Johnson (and were used on the 1909 Argyll), they did not appear on a Ford until
1927, only a year before Chevrolet. Ford

steadily lost market share to GM and Chrysler, as these and other domestic and foreign
competitors began offering fresher automobiles with more innovative features and luxury
options. GM had a range of models from relatively cheap to luxury, tapping all price points
in the spectrum, while less wealthy people purchased used Model Ts. The competitors also
opened up new markets by extending credit for purchases, so consumers could buy these
expensive automobiles with monthly payments. Ford initially resisted this approach,
insisting such debts would ultimately hurt the consumer and the general economy. Ford
eventually relented and started offering the same terms in December 1927, when Ford
unveiled the redesigned Model A, and retired the Model T after producing 15 million units.
An early version of the Ford script in the oval badge was first used on the 1928 Model A;
the Ford script had been created in 1903 by Childe Harold Wills, and the oval trademark in
1907.

Lincoln Motor Company

On February 4, 1922 Ford expanded its reach into the luxury auto market through its
acquisition of the Lincoln Motor Company from Henry M. Leland who had founded and
named the company in 1917 for Abraham Lincoln whom Henry Leland admired.
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The Mercury division was established later in 1938 to serve the
mid-price auto market between the Ford and Lincoln brands.

Ford Motor Company dedicated the largest museum of American History in

1929, The Henry Ford. Henry Ford would go on to acquire Abraham Lincoln's chair, which
he was assassinated in, from the owners of Ford's Theatre. Abraham Lincoln's chair would
be displayed along with John F. Kennedy's Lincoln presidential limousine in the Henry Ford
Museum & Greenfield Village in Dearborn, known today as The Henry Ford. Kennedy's
limousine was leased to the White House by Ford.

The Great Depression

During the great depression, Ford in common with other manufacturers, responded to
the collapse in motor sales by reducing the scale of their operations and laying off workers.
By 1932, the unemployment rate in Detroit had risen to 30% with thousands of families
facing real hardship. Although Ford did assist a small number of distressed families with
loans and parcels of land to work, the majority of the thousands of unskilled workers who
were laid off were left to cope on their own. However, Henry Ford angered many by making
public statements that the unemployed should do more to find work for themselves.

This led to Detroit's Unemployed Council organizing the Ford Hunger March. On
March 7, 1932 some 3,000 - 5,000 unemployed workers assembled in West Detroit to
march on Ford's River Rouge plant to deliver a petition demanding more support. As the
march moved up Miller Road and approached Gate 3 the protest turned ugly. The police
fired tear gasinto the crowd and fire trucks were used to soak the protesters with icy water.
When the protesters responded by throwing rocks, the violence escalated rapidly and
culminated in the police and plant security guards firing live rounds through the gates of
the plant at the unarmed protesters. Four men were killed outright and a fifth died later in
the hospital. Up to 60 more were seriously injured.

Soviet Fords and the Gorki

In May 1929 the Soviet Union signed an agreement with the Ford Motor Company.
Under its terms, the Soviets agreed to purchase $13 million worth of automobiles and
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parts, while Ford agreed to give technical assistance until 1938
to construct an integrated automobile-manufacturing plant at Nizhny Novgorod. Many
American engineers and skilled auto workers moved to the Soviet Union to work on the
plant and its production lines, which was named Gorkovsky Avtomobilny Zavod (GAZ), or
Gorki Automotive Plant in 1932. A few American workers stayed on after the plant's
completion, and eventually became victims of Stalin's Great Terror, either shot[23] or exiled
to Soviet gulags. In 1933, the Soviets completed construction on a production line for the
Ford Model-A passenger car, called the GAZ-A, and a light truck, the GAZ-AA. Both these
Ford models were immediately adopted for military use. By the late 1930s production at
Gorki was 80,000-90,000 "Russian Ford" vehicles per year. With its original Ford-designed
vehicles supplemented by imports and domestic copies of imported equipment, the Gorki
operations eventually produced a range of automobiles, trucks, and military vehicles.

Era of neutrality
During the first 27 months of World War II, when the U.S. was neutral (to December
1941), Ford was hesitant to participate in the Allied military effort. Ford insisted that
peaceful trade was the best way to avoid war. Ford had a subsidiary in Germany. In 1936, a
Ford executive visiting Germany was informed by a Nazi official that Ford's Cologne plant
manager was a Jew (he had one grandparent who was Jewish), prompting discussions at
Ford offices in both Germany and the U.S. Heinrich Albert, Ford's Germany-U.S. liaison,
insisted that the manager be fired. The manager was replaced by Robert Schmidt, who
would play an important role in Germany's war effort.

Henry Ford had said war was a waste of time, and did not want to profit from it. He
was concerned the Nazis during the 1930s might nationalize Ford factories in Germany.
Ford nevertheless established a close collaboration with Germany's Nazi government
before the war—so close, in fact, that Ford received, in July 1938, the Grand Cross of the
German Eagle medal from the regime. Ford's outspoken anti-semitism, including his
newspaper, The Dearborn Independent, which published The Protocols of the Elders of
Zion, also lent credence to the view that he sympathized with the Nazis. In the spring of
1939, the Nazi government assumed day-to-day control of many foreign-owned factories in
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Germany. However, Ford's Dearborn headquarters continued to
maintain a 52% ownership over its German factories but with no voice or control or
financial reward. Ford factories contributed significantly to the buildup of Germany's
armed forces. Ford negotiated a resource-sharing agreement that allowed the German
military to access scarce supplies, particularly rubber. During this same period, Ford was
hesitant to participate in the Allied military effort. In June 1940, after France had fallen to
the Wehrmacht, Henry Ford personally vetoed a plan to build airplane engines for the
Allies.

Wartime
The company enthusiatically supported the war effort after Pearl Harbor, making it a
major component of the "Arsenal of Democracy" that President Roosevelt had promised
would mobilize industrial resources to win the war. Henry, aged 76 and early senile, played
a minor role even though he had 55% ownership of the company stock. His son Edsel Ford,
the company president and owner of 42% of the stock, had never been a pacifist like his
father and now made all the decisions. The company produced 390,000 tanks and trucks,
27,000 engines, 270,000 Jeeps, over 8000 B-24 Liberators, and hundreds of thousands of
parts, gun mounts, and machine tools for the war effort. It ranked third among
corporations in the value of wartime production contracts.

The Company's new Willow Run factory was designed for the production of B-24
bombers although the production line was initially characterized by bungling and
incompetence. Ford's efforts benefited the Allies as well as the Axis. After Bantam invented
the Jeep, the US War Department handed production over to Ford and Willys.

The Treasury Department investigated Ford for alleged collaboration with German-
run Ford plants in occupied France, but did not find conclusive evidence. After the war,
Schmidt and other Nazi-era managers kept their jobs with Ford's German division. In the
United Kingdom, Ford built a new factory in Trafford Park, Manchester during WWII where
over 34,000 Rolls-Royce Merlin aero engines were completed by a workforce trained from
scratch.
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Post-World War II developments

A Ford Taurus, one of Ford's best-selling models. In its 21-year lifespan, it sold 7,000,000
units. It is the 4th best-selling car in Ford's history, behind only the F-150, the Model T, and
the Mustang.

In 1943, a despondent Edsel Ford died of stomach cancer. Henry decided then to
resume direct control of the company, but this proved a very poor idea as he was 78 years
old and suffering from heart problems and atherosclerosis. His mental state was also
questionable, and there was a very real possibility that the company would collapse if he
died or became incapacitated. The Roosevelt Administration had a contingency plan in
place to nationalize Ford if need be so that they wouldn't lose vital military production.

At this point, Ford's wife and daughter-in-law intervened and demanded that he turn
control over to his grandson Henry Ford II. They threatened to sell off their stock
(amounting to half the company's total shares) if he refused. Henry was infuriated, but
there was nothing he could do, and so he gave in. When Henry II, who came to be called
affectionately "Hank the Deuce," assumed command, the Company was losing US$9 million
a month and in financial chaos.

Henry Ford died of a brain hemorrhage on April 7, 1947. Mourners passed by at a rate
of 5,000 each hour at the public viewing on Wednesday of that week at Greenfield
Village in Dearborn. The funeral service for Henry Ford was held at the Cathedral Church of
St. Paul in Detroit on Thursday April 9, 1947. At the funeral service, 20,000 people stood
outside St. Paul's Cathedral in the rain with 600 inside, while the funeral had attracted
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national attention as an estimated seven million people had
mourned his death (according to A&E Biography).

Ernest R. Breech, head of Bendix Aviation, was hired in 1946, and became first
Executive Vice President, then Board Chairman in 1955. Henry II served as President from
1945 to 1960, and as Chairman and CEO from 1960 to 1980. In 1956, Ford became
a publicly traded corporation. The Ford family maintains about 40% controlling interest in
the company, through a series of Special Class B preferred stocks. Also in 1956, following
its emphasis on safety improvements in new models, Motor Trend awarded the company its
"Car of the Year" award.

In 1946, Robert McNamara joined Ford as manager of planning and financial analysis.
He advanced rapidly through a series of top-level management positions to the presidency
of Ford on 9 November 1960, one day after John F. Kennedy's election. The first company
head selected outside the Ford family, McNamara had gained the favor of Henry Ford II,
and had aided in Ford's expansion and success in the postwar period. Less than five weeks
after becoming president at Ford, he accepted Kennedy's invitation to join his cabinet,
as Secretary of Defense. Ford introduced the iconic Thunderbird in 1955 and
the Edsel brand automobile line in 1958, following a US$250 million research and
marketing campaign, which had failed to ask questions crucial for the marque's
success. The Edsel was cancelled after less than 27 months in the marketplace in November
1960. The corporation bounced back from the failure of the Edsel by introducing its
compact Falcon in 1960 and the Mustang in 1964. By 1967, Ford of Europe was
established. Lee Iacocca was involved with the design of several successful Ford
automobiles, most notably the Mustang. He was also the "moving force," as one court put it,
behind the notorious Pinto. He promoted other ideas which did not reach the marketplace
as Ford products. Eventually, he became the president of the company, but clashed
with "Bunkie" Knudsen as well as Henry II and ultimately, on July 13, 1978, he was fired by
Henry Ford II, despite the company's having earned a $2.2 billion profit for the
year. Chrysler soon hired Iacocca, which he returned to profitability during the 1980s. In
1942, Elsa Iwanowa, who was then 16 years old and a resident of Rostov in the Soviet
Union, and many other citizens of countries that were occupied by the Wehrmacht were
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transported in cattle cars to the western part of Germany, where
they were displayed to visiting businessmen. From there Iwanowa and others were forced
to become slave laborers for Ford's German subsidiary, which had become separated from
the Dearborn headquarters as a result of the U.S. declaration of war. "On March 4, 1998,
fifty-three years after she was liberated from the German Ford plant, Elsa Iwanowa
demanded justice, filing a class-action lawsuit in U.S. District Court against the Ford Motor
Company." In court, Ford admitted that Iwanowa and many others like her were "forced to
endure a sad and terrible experience"; Ford, however, moved to have the suit dismissed on
the grounds that it would be best redressed on "a nation-to-nation, government-to-
government" basis. In 1999, the court dismissed Iwanowa's suit. At about the same time, a
number of German companies, including GM subsidiary Opel, agreed to contribute $5.1
billion to a fund to compensate the surviving slave laborers. After being the subject of much
adverse publicity, Ford, in March 2000, agreed to contribute $13 million to the
compensation fund.

In 1979 Philip Caldwell became Chairman, succeeded in 1985 by Donald

Petersen. Harold Poling served as Chairman and CEO from 1990 to 1993. Alex Trotman was
Chairman and CEO from 1993 to 1998, and Jacques Nasser served at the helm from 1999 to
2001. Henry Ford's great-grandson, William Clay Ford Jr., is the company's current
Chairman of the Board and was CEO until September 5, 2006, when he named Alan
Mulally from Boeing as his successor.

Recapitalization, restructuring
Cash hoarding

In April 2000 the Ford Motor Company announced its recapitalization plan
distributing about half of its $24 billion cash hoard, and paying a $10 billion special
dividend, and the issuance of additional stock to the Ford family, to provide more flexibility
for the Ford family in terms of estate planning. In 2000 Ford's cash hoard was the largest of
any company in the world. As of 2006, the Ford family owned about 5% of Company shares
outstanding.
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In December 2006, Ford announced it would mortgage all
assets, including factories and equipment, office property, intellectual property
(patents and blue oval trademarks), and its stakes in subsidiaries, to raise $23.4 billion in
cash. The secured credit line is expected to finance product development during the
restructuring through 2009, as the company expects to burn through $17 billion in cash
before turning a profit. The action was unprecedented in the company's 103-year
history. At the end of 2012 Ford Motor Company's cash balance was $22.9 billion and was
listed as ten on the list of U.S. non-financial corporation sector's top ten cash kings
by Moody's Investors Service in their March 2013 annual report on Global Credit Research.

General corporate timeline

 1896: Henry Ford builds his first vehicle – the Quadricycle – on a buggy frame with 4
bicycle wheels.
 1898: Ford creates the Detroit Automobile Company; two and a half years later it is
dissolved.
 1901: Ford wins high-profile car race in Grosse Pointe, Mi
 1901: The Henry Ford Company is incorporated but discontinued the following year
only to be reinvigorated by Henry Leland as the Cadillac Motor Company
 1903: Ford Motor Company incorporated with 11 original investors. The Model
A "Fordmobile" is introduced - 1,708 cars are produced.
 1904: Ford Motor Company of Canada incorporated in Walkerville, Ontario
 1904: Henry Ford teams up with Harvey Firestone of Firestone Tires
 1906: Ford becomes the top selling brand in the US, with 8,729 cars produced.
 1908: Model T is introduced. 15 million are produced through 1927.
 1909: Ford Motor Company (England) established, otherwise referred to as Ford of
Britain
 1911: Ford opens first factory outside North America – in Manchester, England.
 1913: The moving assembly line is introduced at Highland Park assembly plant, making
Model T production 8 times faster.
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 1913: Ford opens second world branch in Argentina
as Ford Motor Argentina
 1914: Ford introduces $5 ($122, adjusted for inflation) wage for a workday – double
the existing rate.
 1918: Construction of the Rouge assembly complex begins.
 1919: Edsel Ford succeeds Henry as Company President.
 1920: Ford temporarily shuts down due to low sales. After removing unnecessary
administrative expenses and waste, Ford reopens.
 1921: Ford production exceeds 1 million cars per year, nearly 10 times more than
Chevrolet - the next biggest selling brand.
 1922: Ford purchases Lincoln Motor Company for US $8 million ($117 million, adjusted
for inflation).
 1925: Ford introduces Ford Tri-Motor airplane for airline services, and a factory was
built in Yokohama, Japan in February.
 1926: Ford Australia is founded in Geelong, Victoria, Australia,
 1927: Model T production ends, Ford introduces the next generation Model A, from the
Rouge complex.
 1929: Ford regains production crown, with annual production peaking at 1.5 million
cars
 1931: Ford and Chevy brands begin to alternate as U.S. production leaders, in battle for
automobile sales during the Great Depression.
 1932: Ford introduces the one-piece cast V8 block. It makes the Model 18 the first low-
priced V8-powered car. In London Royal Albert Hall the Model 19, or as it was
marketed Model Y, are introduced February 19. The first of a long line of small
European Fords.
 1936: Lincoln-Zephyr is introduced.
 1938: The German consul at Cleveland awards Henry Ford the Grand Cross of the
German Eagle, the highest medal Nazi Germanycould bestow on a foreigner. There is
some evidence Ford had Nazi sympathies, at least before World War II. He may have
financed some Nazi activities, and was active in anti-semitic efforts.
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 1939: Mercury division is formed to fill the gap between
economical Fords and luxury Lincolns. Operated as a division at Ford until 1945
 1941: The Lincoln Continental is introduced. Ford begins building general-purpose
"jeep" for the military. First labor agreement with UAW-CIO covers North American
employees.
 1942: Production of civilian vehicles halted, diverting factory capacity to producing B-
24 Liberator bombers, tanks, and other products for the war effort.
 1943: Edsel Ford dies of cancer at the age of 49, Henry Ford resumes presidency.
 1945: Henry Ford II becomes president.
 1945: Lincoln and Mercury are combined into a single division.
 1946: Ford sues the allies for damages done to his factories in Dresden during the
infamous bombing, and wins compensation.
 1946: The Whiz Kids, former US Army Air Force officers, are hired to revitalize the
company. Automobile production resumes.
 1947: Henry Ford dies of cerebral hemorrhage at the age of 83; Henry Ford II becomes
new chairman.
 1948: F-1 Truck introduced. Lincoln Continental is introduced.
 1949: The '49 Ford introduces all-new post-war era cars. The "Woody" station wagon is
introduced.
 1953 Ford Canada Headquarters and Car Plant opens in Oakville, Ontario
 1954: Thunderbird introduced as a personal luxury car with a V8. Ford begins crash
testing, and opens Arizona Proving Grounds.
 1956: Ford World Headquarters dedicated, September 26, 1956
 1956: $10,000 ($91.1 thousand, adjusted for inflation) Lincoln Continental Mark II
introduced. Ford goes public with common stock shares. Ford's emphasis on safety
with its Lifeguard option package, including seat belts and dash padding, earns the
company Motor Trend's "Car of the Year" award.
 1957: Ford launches the Edsel brand of automobiles in the fall of 1957 as 1958 models.
Ford is top selling brand, with 1.68 million automobiles produced.
 1959: Ford Credit Corporation formed to provide automotive financing.
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 1959: Ford withdraws the 1960 model Edsels from the
market in November 1959.
 1960: Ford Galaxie and compact Ford Falcon introduced.
 1960: Robert McNamara is appointed President of Ford by Chairman Henry Ford II.
 1960: Ford President Robert McNamara appointed Secretary of Defense by President
elect John F. Kennedy.
 1962: Ford of Britain launches first generation of the Ford Cortina. It would dominate
the mid-size family segment in Europe for the next 20 years.
 1964: Ford Mustang the car that started the "pony car" class, Ford GT40 challenges
Ferrari and Porsche at LeMans.
 1965: Ford brand US sales exceed 2 million units. Ford of Germany and Ford of Britain
jointly launch the first generation Ford Transit range of panel vans.
 1965: Ford Galaxie 500 LTD debuts, advertised as quieter than a Rolls Royce
 1966: Ford Bronco sport utility vehicle introduced.
 1967: Ford of Europe is established by merging the operations of Ford of Britain and
Ford of Germany.
 1967: Ford opens Talbotville car plant in St. Thomas, Ontario
 1968: Lincoln Mark Series is introduced as the company's first personal luxury car to
compete with the Cadillac Eldorado. Ford of Europe launches first generation Ford
Escort.
 1970: Ford Maverick are introduced. Ford establishes Asia Pacific operations. Ford of
Europe launches the third generation Cortina/Taunus - merging the two previously
independent product lines under a common platform.
 1972: Retractable seat belts introduced.
 1973: Ford US brand sales reaches an all-time high of 2.35 million vehicles produced.
 1974: Ford Mustang II debuts as a smaller more economical pony car.
 1975: Ford Granada and Mercury Monarch introduced, Maverick continues
 1975: Ford of Europe launches the second generation Escort.
 1976: Ford of Europe launches the first generation Ford Fiesta
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 1977: Ford of Europe launches the fourth generation
Cortina/Taunus
 1978: Ford Motor Company celebrates 75th anniversary. Continental Mark V and
Thunderbird available with "Diamond Jubilee Edition" packages. Fiesta is imported
from Europe as an entry into the economy segment.
 1979: Ford acquires 25% stake in Mazda. Ford becomes the final American automaker
to introduce downsized full-size cars with radically smaller Panther platform.
 1980: Ford of Europe launches the third generation Escort, it is voted European Car of
the Year for 1981.
 1981: The Lincoln Town Car and Ford Escort are introduced. Fiesta discontinued in
North America.
 1982: Ford of Europe introduce the Ford Sierra, ending production of the stalwart
Cortina/Taunus after 20 years and four generations.
 1983: Ford launches a redesigned "aero design" Thunderbird. In a model shift, the
Granada is discontinued in North America, replaced by a facelifted model re-branded as
the LTD. All full-size models are now LTD Crown Victorias/Country Squires.
 1984: Ford Tempo and Mercury Topaz are introduced, replacing the Ford
Fairmont/Mercury Zephyr.
 1985: Ford Scorpio launched by Ford of Europe. Replaces Granada as its full-size
offering and is voted European Car of the Year for 1986, Ford's second COTY win in the
 1980s. Merkur brand launched to market the Sierra and Scorpio models in North
America.
 1985: Purchases First Nationwide Financial Corporation, a savings and loan. Sold in
1994 after large losses.
 1985: Ford Taurus introduced with dramatic "aero design" styling, along with Ford
Aerostar minivan.
 1986: Ford of Europe launches the second generation of the Transit van family. Ford
Capri ceases production.
 1987: Ford acquires Aston Martin Lagonda and Hertz Rent-a-Car.
 1987: Henry Ford II dies at age 70.
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 1988: Ford Festiva, built in Korea by Kia is introduced.
 1989: Ford acquires Jaguar. Mazda MX-5 Miata is unveiled. Third generation Fiesta is
launched in Europe - and establishes itself as the fastest selling generation of Fiesta to
date - 1 million units in less than two years.
 1989: Acquires Associates First Capital Corporation, a finance company. In 1998, it is
spun off to Ford shareholders.
 1990: Ford Aerostar is Motor Trend's Truck Of The Year, while Lincoln Town Car is
Motor Trend's Car Of The Year.
 1990: Merkur brand of automobiles production discontinued. Ford of Europe launches
fourth generation Escort.
 1991: Ford Explorer is introduced, turning the traditionally rural and
recreational SUV into a popular family vehicle.
 1992: Ford Aerostar and Ford Taurus/Mercury Sable are redesigned; Ford Taurus
becomes America's top selling car, displacing the Honda Accord. Ford of Europe
announces first generation Ford Mondeo, the first product of the global CDW27
platform
 1992: Redesigned Ford Crown Victoria and Mercury Grand Marquis launched, the first
new full-size sedans in 13 years; Ford Country Squire/Mercury Colony Park station
wagon discontinued.
 1993: Ford launches Mondeo in Europe, and announces its North American derivatives
- the Ford Contour and Mercury Mystique
 1994: Ford Tempo and Mercury Topaz are discontinued - replaced by Ford Contour and
Mercury Mystique* 1994: Ford Aspire replaces Festiva, becoming the first car in its
class to offer standard dual air bags and optional 4-wheel ABS.
 1995: Ford's first front-wheel-drive V8 sedan is introduced, the 4.6L V8-
powered Lincoln Continental. Ford of Europe launches fourth-generation Fiesta.
 1995: New front-wheel-drive Ford Windstar minivan is introduced. Aerostar remains
in production. Redesigned Ford Explorer released, now with standard safety features
such as dual air bags, 4-wheel ABS as standard equipment.
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 1996: Ford certifies all plants in 26 countries to ISO
9000 quality and ISO 14001 environmental standards. The V12-powered Jaguar XJS is
discontinued.
 1996: Controversially redesigned "Ovoid" Ford Taurus and Mercury Sable are
introduced. Exit of Chevrolet Caprice leaves full size fleet market to Ford Crown
Victoria.
 1996: Ford increases investment stake in a troubled Mazda Corporation to a controlling
interest of 33.4%.
 1997: Full size 4-door SUV Ford Expedition introduced replace the Ford
Bronco.Mercury Mountaineer introduced. Redesigned Ford Escort and Mercury Tracer
also introduced.
 1997: Ford Aerostar production ends, along with Ford Probe, Ford Thunderbird,
Mercury Cougar, Mazda MX-6, and Ford Aspire, without immediate replacement.
 1997: Sculpted redesign of Ford's top-selling F-150 pickup, overcomes controversy to
set sales records.
 1998: Lincoln Navigator creates domestic luxury SUV class. Mark VIII is in its final year,
introduces HID-headlamps, midway through model year 1996.
 1998: The Focus replaces the ageing Escort in Europe and quickly becomes one of the
best-selling cars of the segment. Is launched in North America for the 2000 model year.
 1999: Ford acquires Volvo car division from Volvo. Bill Ford becomes Chairman of the
Board, replacing Jacques Nasser.
 1999: A smaller sporty Mercury Cougar is reintroduced with front-wheel drive.
 1999: Jaguar Racing Formula One team is formed, with Jackie Stewart at the helm.
 1999: Ford splits its full-sized pick-ups into two distinct models (the first to do so) with
the introduction of the Ford F-Series Super Duty (F-250 - F-550). Ford Excursion(based
on Super Duty) is introduced, and has the distinction of being the largest SUV sold
anywhere.
 2000: Ford purchases Land Rover brand from BMW. Lincoln LS and Jaguar S-Type are
introduced, along with a refreshed Ford Taurus and Mercury Sable. The Lincoln LS
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becomes the 2000 Motor Trend Car of the Year. Escort is
discontinued in Europe. Third generation Transit platform is launched in Europe.
 2001: Retro-styled Ford Thunderbird is introduced, based on the Lincoln LS/Jaguar S-
Type DEW98 platform, and is also named Motor Trend Car of the Year for 2002.
 2002: Fifth-generation Fiesta is launched by Ford of Europe.
 2002: Lincoln Continental is discontinued after a roughly fifty-year run. Jaguar X-
Type is introduced (first AWD Jaguar). Escort van production ends in Europe, marking
the end of the Escort name after a 24-year production run. Ford Transit
Connect production begins at Ford-Otosan in Turkey.
 2003: Ford Motor Company's 100th Anniversary. The Ford GT is released, along with
limited Centennial editions of some Ford vehicles.
 2004: Jaguar Racing team sold to Red Bull GmbH. Ranger sales decline, losing the title
as top-selling compact pickup. The similar Mazda B-series pickup is withdrawn from
the US market. The Ford Escape Hybrid, the first gasoline-electric hybrid SUV, is
introduced. Major redesign of the Ford F-150 and introduction of the Lincoln Mark
LT. Ford Freestarand Mercury Monterey minivans are introduced, replacing the Ford
Windstar and Mercury Villager.
 2005: Ford Mustang redesigned with retro styling reminiscent of the 1960s models.
The Ford Five Hundred, Mercury Montego, and Ford Freestyle are introduced. Mercury
Sableproduction ends, and Ford Taurus production is limited to rental car, taxi, and
other fleet sales.
 2006: Ford Taurus ends production after a 20-year run. Ford Fusion, Mercury Milan,
and Lincoln Zephyr introduced. Ford announces major restructuring program The Way
Forward, which includes plans to shut unprofitable factories. Bill Ford steps down as
CEO, remains as Executive Chairman. Alan Mulally elected President and CEO. Ford
Freestar and Mercury Monterey minivans are discontinued without replacement. Ford
mortgages all assets to raise $23.4 billion cash in secured credit lines, in order to
finance product development during restructuring through 2009. According to J. D.
Power and Associates quality surveys, the Ford Fusion is rated higher in quality than its
chief rivals, the Toyota Camry and Honda Accord. 2007: Ford sells Aston Martin to a
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British consortium led by Prodrive chairman David Richards, and
announces plans to sell Jaguar and Land Rover.
 2007: Ford reports losses of $12.7 billion for 2006. Ford Edge and Lincoln
MKX introduced. The Lincoln Zephyr is replaced with the Lincoln MKZ. A
redesigned Ford Expedition(including the longer wheelbase "EL" version) and Lincoln
Navigator are introduced. Ford unveils the Ford Interceptor and Lincoln MKR concept
cars, and a pre-production Lincoln MKS is introduced. The Ford Five Hundred, Ford
Freestyle and Mercury Montego nameplates are dropped and replaced with the
previously retired Ford Taurus, Ford Taurus X, and Mercury Sable nameplates. 2008:
Ford sells Jaguar and Land Rover to Tata Motors.
 2008: Ford of Europe launches sixth-generation Fiesta, based on the Verve concept car.
and announces plans to sell Jaguar and Land Rover.
Sources:

 General Timeline (through 2002): Ford Motor Company 2002 Annual Report
 Production figures: U.S. Automobile Production Figures

 2009 Ford announces that it will leverage more of its European line-up for the North
American market. The Turkish-built Transit Connect compact panel van is the first
exponent of this strategy, followed by the sixth-generation Ford Fiesta subcompact.
 2010 Ford sells Volvo Cars to Geely Automobile. Third generation Ford
Focus unveilied - as with the first generation car, it will return to using a single
platform for all markets - will be released in North America as a 2012 model.
 2011: Mercury production ends; the last vehicle is a Grand Marquis. Lincoln Town
Car is discontinued. Ford Focus Electric unveiled. Ford announces that they will sell
8 million vehicles globally by 2015.
 2011: Ford Ranger discontinued for North America; redesigned global
version launched.
 2012: Fourth generation Mondeo/Fusion previewed at the Detroit Motor Show, thus
reuniting Ford's mid-size platform for Europe and North America for the first time
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since the CDW27 1st gen Mondeo/Contour/Mystique of 1994.
Ford Crown Victoria, sold only for export in 2012, is discontinued.
 2013: Fourth generation Transit/Tourneo launched, along with the second
generation Transit Connect and the refreshed Fiesta is revealed.
 2014: The Ford Mustang celebrates 50 years of production with the launch of
its sixth generation. The 2015 F-150 is launched, featuring an aluminum-intensive
body design.

Criticism
Further information: Firestone and Ford tire controversy, The Battle of the Overpass,
and Ringwood Mines landfill site

Throughout its history, the company has faced a wide range of criticisms. Some
have accused the early Fordist model of production of being exploitative, and Ford has
been criticized as being willing to collaborate with dictatorships or hire mobs to
intimidate union leaders and increase their profits through unethical means.

Ford refused to allow collective bargaining until 1941, with the Ford Service
Department being set up as an internal security, intimidation, and espionage unit
within the company, and quickly gained a reputation of using violence against union
organizers and sympathizers.

Ford was also criticized for tread separation and tire disintegration of
many Firestone tires installed on Ford Explorers, Mercury Mountaineers, and Mazda
Navajos, which caused many crashes during the late 1990s and early 2000s (decade). It
is estimated that over 250 deaths and more than 3,000 serious injuries resulted from
these failures. Although Firestone received most of the blame, some blame fell on Ford,
which advised customers to under-inflate the tires in order to reduce the risk of vehicle
rollovers.

Nazi collaboration
Further information: Henry Ford
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In 1940, at a time when the German division had begun to
use slave labor, Ford-Werke was still under the control of Dearborn. After Pearl Harbor,
Ford lost control of its division in Germany, and all the Ford facilities in Germany came
under the full control of the Nazi government. In 1943 the Company wrote off all its
holdings in Germany as a total loss, and never reclaimed them after the
war. The German Ford company used slave labor in Cologne between 1940 and 1945
and produced military vehicles such as trucks, planes, and ships. Many of these
allegations were made in a series of United States lawsuits in 1998. The lawsuit was
dismissed in 1999 because the judge concluded "the issues...concerned international
treaties between nations and foreign policy and were thus in the realm of the executive
branch."

Defenders of the company argue that the Ford German division, Fordwerke, had
been taken over by the Nazi government after it rose to power, claiming that it was not
under the company's control. Although Ford's initial motivations were anti-war, the
plants in Allied countries were heavily involved in the Allied war effort after the
outbreak of war.

Argentine "Dirty War

Further information: Dirty War

Ford's Argentine subsidiary was accused of collaborating with

the Argentine 1976–1983 military dictatorship, actively helping in the political
repression of intellectuals and dissidents that was pursued by said government. No
result was proven and the company denied the allegations.

In a lawsuit initiated in 1996 by relatives of some of the estimated 600 Spanish

citizens who disappeared in Argentina during the "Dirty War", evidence was presented
to support the allegation that much of this repression was directed by Ford and the
other major industrial firms. According to a 5,000-page report, Ford executives drew up
lists of "subversive" workers and handed them over to the military task-forces which
were allowed to operate within the factories. These groups allegedly kidnapped,
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tortured and murdered workers—at times allegedly within the
plants themselves. The company denied the allegations.

In a second trial, a report brought by the CTA, and the testimonies of former Ford
workers themselves, claimed that the company's Argentine factory was used between
1976 and 1978 as a detention center, and that management allowed the military to set
up its own bunker inside the plant. The company denied the allegations.

Ford Pinto
Further information: Ford Pinto Fuel System

In September 1971 the Ford Motor Company launched the Pinto for the North
American market. The car's fuel tank integrity is alleged to have been substandard for
the time, making the car inordinately susceptible to fuel tank ruptures in rear impact

collisions. An article published in Mother Jones contributed to a public controversy by

saying that Ford knowingly released a design that would result in hundreds of deaths
as well as calculating that it was cheaper to fight injury claims in court than make
changes to the Pinto's fuel system. Public outcry related to the controversy and the

Mother Jones article created political pressure on the National Highway Traffic Safety
Administration which initialed an investigation. The result of the investigation was the
issuing a determination that the Pinto and related Mercury Bobcat were defective. This
resulted in Ford recalling 1.5 million Pintos and Bobcats, the largest automotive recall
to date. Two notable legal cases, Grimshaw v. Ford Motor Company and State of Indiana
v. Ford Motor Company are the result of accident related fuel system fires. The
Grimshaw jury awarded the plaintiffs $127 million, the largest product
liability and negligence award in history at that time; the trial judge reduced the jury
award to $6 million. Indiana v. Ford was the first time a corporation indicted on
criminal charges for a defective product, the Ford Pinto, and the first corporation
charged with reckless homicide. The case resulted in a not guilty verdict.[61] Subsequent
research has discredited early fatality figures and indicate the Pinto's overall fire safety
record was typical for subcompacts of the time.
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Objectives
 Stabilize the climate by considering reducing long-term emission.

 Development of infrastructure that expands the use of bio-fuels and reduces

dependence on oil.

 Cut the usage of global energy by 27% and usage of water by 25%.

Strategies
The organization of Ford is using differentiated strategy in their businesses. This
strategy is to target two or more segments by developing marketing mix for each
segment. Ford Motor Company is designed to appeal to many different types of
consumers and to satisfy many different needs in the form of economy cars, sports cars,
luxury cars, station wagons, vans, trucks, and so on. Ford produced Ford Fiesta car,
which was focused on young people and ladies. (Letha, 2013)

Ford has applied Six Sigma to control systems by eliminating data-driven defects.
Particularly, Ford has been regarding DMAIC approach of Six Sigma projects that

includes following steps of the process; which are Define, Measure, Analyze, Improve
and Control (Thompson, 2007).

Ford has been using different promotional strategies to maintain their marketing
edge over the competitors. The advertisements and logos with attractive strap line,

amazing designs and advertisement are giving edge over competitor’s activities. Ford’s
promotional strategy has 2 types of promotion such as above the line promotion and
below the line promotion (Letha, 2013).

By means of its promotional strategy, Ford builds long lasting relationships with
its previous and loyal customers as well as with new potential customers. Even though
Ford has no longer been sponsoring sporting events, this exclusive opportunity gave
them a unique advantage in the competitive market. Sponsorship times had helped
them to tap the sports passion of the customers and soared its brand name and image
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high in the eyes of fans and customers alike. They had been
successfully handling the promotional side of the business with tactics to develop their
brand image. And recently Ford has introduced certain changes in its promotional
strategy notably it will use “push” strategies for traditional segments and “pull”
strategies for new segments (David, 2015).

Sponsorship campaigns play a vital role in Ford`s public relation strategy and has
two major objectives. One is to reinforce and further build the Ford brand recognition;
the other is to achieve a good connection between Ford and its potential customers
(BusinessCaseStudies, 2016).

Ford has implemented its own pricing strategies, which are more demand, or market
based pricing. Ford used new strategies called “Blue Tag”, the reduction in the
recommended list price of small and medium cars in addition to reducing the dealers‟
discount; is expanding from its large car to the small car range. The price reductions are
between 6%-15% on the Ford Fiesta. The Ford Motor Company is setting two types of
price, which is price skimming and penetration pricing in the market industry (Letha,
2013).

Ford applies penetration-pricing strategy wherein prices are artificially low in

order to attract a large number of buyers quickly and to gain market share. This is a
good strategy to use if there are many competitors. Profits are not a concern under this

strategy. The most important thing is to get your product known and worry about
making money later. (David, 2015).

Ford's pricing strategy for passenger vehicles (PV) and commercial vehicles (CV)
is set to strengthen the brand's appeal for retail customers and is called up to bring
benefits to ultimate consumers. Ford strives to maintain a balance between quality and
technically advanced features that eventually results in a competitive price. The
reasonable prices of the products and its capacity of saving via low fuel consumption
and low maintenance costs have also made it a favorite with low-income group of
consumers (Bhasin, 2016).
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Business challenges such as minimizing warranty costs
related to software, managing the growing amount of software in vehicles, reducing
escalating software development costs require Ford to come up with a new way of
doing business, a new way of testing, validating and managing the software content that
goes on Ford’s vehicles. This has been a key deliverable affecting future quality as well
as the future cost of Ford products. Since reprogramming a controller is much quicker
than a hardware replacement, this reduces the cost of repairs. It also eliminates
concerns about a part being out of stock, or the customer having to leave the car
overnight, or the introduction of a squeak or rattle during the repair (Siemens, 2016).

Ford classified the brand names of midsize, elegant and generous cars by
research techniques. Ford uses the blue oval that designates Ford brand to determine
price and value added to the cars. The Ford oval symbol has a historical value for Ford
Motor Company and it is one of the most recognized trademarks in the world. (Letha,
2013)

Opportunities for Ford

 New automotive technologies, such as self-driving or autonomous cars. These could

increase demand for new models and sales. The publicity-generated new technologies
could also increase interest in car purchases.
 Volkswagen’s diesel scandal. Ford has not marketed any diesel-powered vehicles in the
United States, which means it will not be hurt by the scandal. Ford could take some market
share by marketing disgruntled Volkswagen customers. Volkswagen will lose the
competitive edge that diesel mileage gives it.
 Ford’s alternative fuel cars, particularly the C-Max Electric and the Fusion
hybrid,[6] which are not dependent on diesel. Ford is marketing a C-Max electric plug-in
hybrid. The market for these is growing, particularly with concerns about air pollution and
a growing suspicion of electric cars created by the Volkswagen scandal.
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 Growing auto markets, particularly in expanding economies
such as China, Mexico and India.
 New uses for vehicles, such as app-bases serviced like Uber and Lyft and short-term rental
services like Zipcar. These could create new markets for vehicles and for vehicle
financing.
 Increased levels of e-commerce, which could increase the demand for light commercial
vehicles that are used for delivery. Ford manufactures one of the most popular delivery
vehicles: the Transit Connect work van.

Threats to Ford

 The growing presence of German and Japanese automakers in the vital North American
auto market, particularly Volkswagen and Toyota. Toyota is now competing directly with
Ford in the pickup truck market, and Volkswagen is considering entering that
market. Mercedes and Nissan are now competing directly with Ford in the commercial
van market.

 Some companies have a head start in alternative fuel vehicles. Toyota and Honda are
ahead in the production of fuel cell vehicles. Volkswagen has greater expertise in electric
cars.
 Widespread adoption of electric vehicles could force costly upgrades to plants and
expensive changes to dealerships. This could reduce Ford’s profits.
 Lower fuel prices could limit demand for costlier alternative fuel vehicles such as hybrids
and electrics.
 The Volkswagen scandal could limit the demand for diesel-powered vehicles, including
the Ford F150.
 Today’s young people are driving less than previous generations, news stories indicate.
This means less interest in cars and could lead to fewer car sales at some point in the
future.
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 Some experts predict that new technologies, such as Uber and
self-driving vehicles, could limit the market for cars and financing. This could limit
vehicle sales volume at some point.
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Ford Motor Company Toyota General Motors

Critical
success Weight Rating Score Rating Score Rating score
factors

Product
0.20 4 0.20 2 0.20 2 0.20
quality

Warranty 0.15 2 0.30 2 0.10

Global
0.10 3 0.60 3 0.20 2 0.20
expansion

Financial
0.15 4 0.60 3 0.45 3 0.45
position

Customer
0.10 3 0.80 2 0.40 2 0.40
loyalty

Advertising 0.5 3 0.15 2 0.20 2 0.20

Market
0.10 2 0.30 2 0.45 2 0.45
share

Price
0.15 4 0.30 2 0.30 2 0.30
Competitive
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Total 1.00 3.25 2.30 2.15

External Factor Evaluation (EFE) Matrix Ford Motor Company

Key External
Weight Rating Weighted Score
Factors
Opportunities
Company surviving
without
0.5 1 5
governmental help
are more attractive

Increasing
environmental 0.5 1 5
awareness

Buyers bargaining
0.2 1 2
power

Availability of new
technologies in this 0.3 1 3
industry

Limited leading
companies in motor 0.4 3 12
industry measure up
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to the customer
number

Big market share 0.8 1 8

Security growth of
manufacturing and 0.2 2 4
experience it

Worldwide company
0.1 3 3
Global development

Customer demands
about fuel efficient 0.5 2 1
cars

Increasing
consumers spending 0.7 3 21
habits

Customer desire for

0.6 4 24
hybrid cars

Customer modern
vehicles 0.8 4 32
desires/demand
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External Factor Evaluation (EFE) Matrix Ford Motor Company

Key External
Weight Rating Weighted Score
Factors

Threats

Competitors
different vehicle 2 1 2
comfort offers

High cost for

substitute products 2 2 4
in other countries

Financial crisis 6 1 6

Slowdown in US
economy make new
1 2 2
car sales to decrease
drastically

High cost of
Research and 4 2 4
Development
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2 2 4
Weak USD

Unavailability of
5 2 1
credits from banks

Global economic
recession as 7 2 14
consumer demand

Increase in gasoline
4 1 4
prices

Ford’s Strengths

 Strong position in the American auto market. Ford’s U.S. market share in the market for
cars and light trucks in August 2015 was 14.8%, making it number two to General Motors
Corporation.
 Ford’s biggest market is the United States, which has been doing better economically than
the two other large markets, China and Europe, in recent years.
 Ford has some popular models, including the F150 pickup truck, the Transit Connect work
van, the Fusion sedan and the Explorer SUV.
 Strong financial position. Ford reported a free cash flow of $3.477 billion in June 2015.
 Proven expertise in manufacturing, research and development and automobile marketing.
 Strong dealership network. Ford currently has 7,500, according to Automotive News.
 Ford’s expertise in the manufacture and marketing of light commercial vehicles,
particularly vans. The demand for commercial vans is growing because of the increasing
demand for delivery service created by growing e-commerce.
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Ford’s Weaknesses

 Inability to match the production capabilities or sales volume of the top five automakers:
Toyota, Volkswagen, General Motors, Renault-Nissan and Hyundai Kia. Both Toyota and
Volkswagen produced over 10 million vehicles in 2014, or twice as many as Ford data
provided by Statista indicates.
 Poor reputation of American auto brands compared to European and Japanese
competitors. Lincoln in particular is widely considered an inferior product to British and
Germany luxury cars, even in the United States.
 Heavy dependence on U.S. and European auto markets. Most experts believe future
growth in car sales will be in emerging markets such as China and India.
 Large operations in Europe, where car sales have been stagnant in recent years.
 Ford’s reputation as a working- or middle-class brand, which makes it hard to market
vehicles to the upwardly mobile.
 Heavy reliance on pickup truck sales. Pickups have limited appeal outside the North
American market.
 Dependence on some national auto markets that are in recession because of falling prices
for natural resources, such as Russia, Brazil and Canada.
 Ford’s reputation as a staid, conservative brand, which makes it harder to market to
younger consumers.
 Low stock price $15.26 a share on October 19, 2015.
 Poor reputation with investors, which can limit the company’s ability to raise capital. Ford
had a market capitalization of just $60.55 billion on October 19, 2015.
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Internal Factor Evaluation (IFE) Matrix Ford Motor Company

Key Internal Weight Rating
Weighted Score
Factors 0.0 to 1.0 3 or 4
Internal Strengths
Strong and globally
positioned brand 0.13 4 0.52
names
Large employee
base with highly
educated engineers 0.09 3 0.27
and good R&D
department
One of the largest
automotive
0.06 3 0.18
manufacturer (along
with a long history)
1285% increase in
0.09 3 0.27
net cash
1285% increase in
0.11 4 0.44
net cash

Internal Factor Evaluation (IFE) Matrix, The total weight score 2.75 of Ford
Auto’s internal factors indicates a kind of weak internal position that gains Ford many great
advantages. Because Ford Auto is an international corporation and a giant in the industry,
most of their strengths are rated 4 (major) while most of weaknesses are rated 2 (minor).
As a result, the matrix reveals Ford is be able to decrease weaknesses to zero. However,
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Ford still needs to try more improve their weaknesses which is also one of the score factors
in strategic management to compete with many competitors from Asia (Toyota, Mitsubishi,
Daewoo) and Europe (BMW, Das Auto, Audi). With many operation expanded in enormous
geographical areas combines a long lasting history in the auto industry. Ford certainly has
more than sufficient capabilities to win its competitors. The worth noticeable problem of it
is the poor product life cycle and the lack of innovative design structures. This problem can
be fixed by their high employee productivity . the more attractive care policy, the more
people will enlist Ford giant and the more creative, innovative and unique products come
into being existence that may gain them a huge number of customers. Obviously, a huge
number of customers bring about a massive profit which is the core feature for Ford to
solve every problem from stock price, obligation to competition. Overall, 2.75 is still a fine
number showing that Ford’s management will have plenty of effective business strategies
in future in case weaknesses are generated.

SWOT ANALYSIS

STRENGTHS WEAKNESSES
1. US market position 1. High cost structure
2. Financial Performance 2. Unprofitable Europe Operations
3. ECOnetic approach 3. Low exposure to Asia Pacific
4. ONE Ford approach
5. Growth in China
OPPORTUNITIES THREATS
1. Green vehicles 1. Decreasing fuel prices
2. Increasing fuel prices 2. Rising raw material prices
3. New emission standards 3. Instances competition
4. Strategic Partnership 4. Fluctuating exchange rates
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Although Ford Auto has a number of weaknesses and threats, their strength and
opportunities take dominant part in the matrix which provides Ford many powerful
advantages to deal with weaknesses and threats. SO strategies is combination of Strengths
and Opportunities and consolidate strengths; WO strategies form Weaknesses and
Opportunities propose strategies to decrease weaknesses and see weaknesses as further
opportunities develop company; ST strategies provides ways to utilize strengths in order to
eliminate threats by widen line of business; and WT strategies provide orientations to
remove both weaknesses and threads at the same time. As we can see, there are so many
threads in the SWOT analysis while strengths and opportunities are less but powerful. So
that it is easy for us to find solution for potential intimidations. Although there is no
hardship that Ford, a corporation of international stature, cannot handle, risks are always
exist in business world and may harm them anytime. The SWOT matrix of our group
supports some ideas may be useful for them to apply in their strategic management. They
can add them to their plan to recover lost, improve productivity and strongly compete in
potential markets.

STRATEGIC POSITION AND ACTION EVALUATION (SPACE)

MATRIX

Demonstrates the number in x - axis and y- axis so that Ford Motor should pursue
Quadrant IV (competitive). In this situation, for the Financial position, each kind have the
same number which include return on asset, leverage, net income, net asset and return on
equity lead to the total score is 2, this is had a bad score compare with general motor. Next,
the result of competitor position is a minus number(-3), the market share just has (-4(,
product quality, customer loyalty. Technological know – how and control over supplier and
distributors take a good score (-3) in market. Thirdly, stability position have a average
score is (-3), that is average number include a bad number in rate of inflation (-4),
technology changes, price elasticity of demand, the bad affects from competitive pressure is
(-5), barrier to entry into the market has a good number is (-2). Finally is industry position
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has a good score is 4.6, the highest number is Ease on entry into
market is 6 and then is growth potential is 5, financial stability, resources utilization and
profit potential. So, the conclusion is that Ford Motor should take the strategy is
diversification of products and that reproduce the type and model of product development
like the bestseller product line and follow the fashion trend like some car lines of
competitors. Moreover, Ford Company needs to seek strategies to attract consumers from
the competitor.

Financial Position Stability Position

Return on Asset 2 Rate of Inflation -4
Leverage 1 Technological Changes -2
Net income 3 Price Elasticity of Demand -2
Net asset 3 Competitive Pressure -5
Return on Equity 1 Barrier to Entry into the Market -2
Financial Position (FP) 2 Stability Position -3
Competitive Position Industry Position
Market Share -4 Growth Potential 5
Product Quality -3 Financial Stability 4
Customer Loyalty -2 Ease of Entry into the Market 6
Technological Know- how -3 Resource Utilization 2
Control over Suppliers and -3 Profit Potential 4
Distributors
Competitive position (CP) -3 Industry Position (IP) 4.6
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QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

As is grand strategy ford company fall on second quadrant is means that firm should
first go for intensive strategy. Hence the best selected alternative is production of fuel
efficient car, which is an intensive strategy.

1. Apply 2. 3. Alliance
market Production with the
penetration of Fuel competitor
strategies efficient
globally cars
Key Factors Weight AS TAS AS TAS AS TAS
EXTERNAL
Opportunities
1. Demand and trend for hybrid vehicles 0.08 2 0.16 3 0.24 1 0.08

2. China, a vibrant market for 0.07 3 0.21 4 0.28 2 0.14

automotive industry
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3. Reduction of GM sales due to 0.05 - - - - - -
perceived lower quality and fuel
efficiency
4. Demand of fuel efficient cars 0.07 3 0.21 4 0.28 2 0.14
5. Alliance with the British Petroleum to 0.07 - - - -
develop hydrogen power
6. High expectations of customers 0.05 3 0.15 4 0.20 2 0.10
7. Ford’s “S-Max” car of the year in 0.06 - - - - - -
Europe in 2006
Threats
1. Excessive sales to rental car agencies 0.05 - - - - - -
affecting the brand image and resale
value
2. Strict standard of CO² emission result 0.07 1 0.07 2 0.14 3 0.21
in increasing the manufacturing cost
to produce engines
3. New entrants i.e.: Honda, Toyota, 0.08 4 0.32 3 0.24 2 0.16
Nissan result in tough competition
4. Currency rate fluctuation and 0.08 2 0.16 3 0.24 4 0.32
increased cost of raw materials effect
the production and sales
5. Car financing sector facing financial 0.05 - - - - - -
hardship due to increasing mortgage
rates
6. Lack of desired vehicles available on 0.06 - - - - - -
the dealers lot
7. Rising cost of health care and pension 0.05 - - - - - -
will affect the future investment
8. Toyota selling vehicles through E- 0.05 4 0.20 2 0.10 1 0.05
commerce (Gazoo.com)
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9. Chinese auto firms gaining strength 0.06 3 0.18 4 0.24 2 0.12
and soon to enter the US market
INTERNAL
Strengths
1. Increase in revenue to 6% (i.e. 0.06 - - - - - -
$87.62B) in June 30, 2007
2. Production of hybrid energy vehicles 0.07 2 0.14 3 0.21 4 0.28
3. Ford’s credit division achieved an 0.06 - - - - - -
increase of $16.5B in 2006
4. Strong brand recognition as 0.07 4 0.28 3 0.21 1 0.07
affordable and safe vehicle
5. Increase in PAG division from $8.0- 0.06 - - - - - -
$8.6B in 2006
6. Effective distribution and 0.05 4 0.20 3 0.15 2 0.10
manufacturing channels covering
17.5% in market share in the
automotive industry

GRAND STRATEGY MATRIX

Ford crashed in the 2nd quadrant, meaning that it faced one huge loss, and it is also
affected by new business in the automotive industry. Therefore, Ford’s competitive
position is weakened while the growth of the market is growing fast. The competition
becomes more intense as the expectations of consumers is increasing, besides, natural gas
and raw material prices also increased so it made difficult for business which often produce
by new production line. There are some appropriate strategies that Ford should take
consideration:

 MARKET PENETRATION: use the strategy to penetrate global markets

- Funding for major events related to entertainment and sports
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- Enhanced advertising on television, radio and on
the street.

 PRODUCT DEVELOPMENT: using materials environmentally friendly

 HORIZONTAL INTEGRATION: use the strength of the company and combined with
the strength of the competitors company to gain a competitive advantages.

EVALUATION

Ford Motors falls in the second quadrant of grand strategy matrix as its facing losses
and its competitive position has also been affected by new entrants in the automotive
industry so it has weak competitive position and the market growth is rapid. Increasing
consumer’s expectations had made the environment more competitive as on one hand it
had provide a room for innovation but due to continuous rising prices of raw material and
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gas prices and also the currency rate fluctuation. As far as this
current scenario is concerned appropriate strategies would be:

Market Penetration

Apply Market penetration strategies globally.

a. Sponsor events related to sports, entertainment, etc.

b. Partnership with a television channel that will display ads of ford motors in
different intervals
c. Developing Fords blog

Product Development

a. Production of fuel efficient cars

b. Production of hybrid energy vehicles

Horizontal Integration

a. Alliance with the competitors can be helpful to achieve competitive advantage by

combining the distinctive competencies of both the firms.
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RECOMMENDATIONS FOR THE COMPANY

 Focus on target markets: Clearly the current 4 seats of Ford’s hard to compete on
Japanese automakers, and Korean on the market. Therefore, Ford has to focus on
preferred product of intelligent so that concentrate on the improvement and
development of products, thereby reducing the average cost, offer more attractive
prices to customers in the current competitive environment, and with the
development of science technology, technical barriers as well as the quality is not so
much as before. Besides Ford should invest more in such populous countries China.
India for its large population will be mean more market share. If we capture the
tastes of the people in these country and make them like our products, we will have
a large number of goods to be consumed.
 Ford is one of the largest automakers over the world. To maintain this position, Ford
needs to keep pace with the tastes and preferences of consumers. In other words,
Ford has to analyze and study the auto maker frequently to know the general trend
to avoid falling behind rivals. Moreover, it is better for Ford to apply the cutting-
edge technologies in producing products in order to bring the best possible cars to
customers. In addition, to get more public attention and make Ford’s image better,
they are supposed to be responsible for societies, communities and environments.
Head executives of Ford should have wide vision and build obtainable clear
objectives and practical applicable strategies so that the company can do business
rightly.
 Maybe Ford can deal with risk. Ford should carefully prepare for the bankruptcy.
Ford should exploit the chance in China and apply capital to show up its sales and
market share in China because in the future, maybe China will get into US market.
Moreover, ford should have some strategies with the ultimate aim is to be the best
success in North America and show the best products in the world. Customers
would like to choose Ford’s product if Ford know how to attract customers by
market strategies. Ford has to develop an electrification strategy like other products
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 of competitor instead of the CO² released from its vehicle and make cars engine
more efficient.
 Ford should focus and invest much for design phase to attract ore customers.
Moreover they should strongly boost business operation in Europe and Asia
market such as China, Japan, invest more for marketing campaign such as
employing good designers , launching unique and innovative commercial, and
utilizing the information spread in the internet. Besides , the decreasing price of
eco- friendly vehicles for more people to be affordable to buy it is essential to take
consideration.
 In competitive environment with so many companies in the world, to gain market
share is actually very difficult one . Besides the production of popular models that
suit the demands of the consumer, should produce more Ford cars and produce
super cheap for consumers to have more choices. Applying advanced technology to
produce super car performance with beautiful design. For ultra- cheap cars, Ford
will also need to pay attention to quality and design more customers enjoyed the
affordable medium line but still beautiful and elegant. In addition, the charity is also
useful for market share expansion and polish name for Ford. For example, opening
the car donation for the homeless and poor. Organizing the charitable activities to
the impoverished areas of the world as Africa. Car auction to raise funds for the
disaster areas in the world.
 Ford should actively do more marketing campaigns on social networks,
communication channels. In addition, giving a careful consideration to research and
develop a novel vehicle, feature for the market that meets and exceeds customer
expectation. A product line absolutely new engine, features, and still satisfy Ford’s
criteria- quality, green safe and smart is a golden opportunity to create a difference
with business rivals.
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ETHICS
Because Ford recognizes the importance of gaining consumers’ trust and respect, it
strongly believes that the consumer is a major priority. It participates and sponsors many
events to help its local communities. Locally, every Ford dealership individually does its
own share to help out its community: however, on a national level Ford has a few major
events that it initiates. One of the major events is The Ford Partnership for Advanced
Studies, or Ford PAS. This is an award- winning academic program that brings together
high school students, teachers, employers, and community leaders to help better educate
today’s youth by offering free tutoring to all who participate. The 9 goal of the program is
to prepare young people for higher education and career development, as well as provide
them with the knowledge to successfully participate in the global community. This program
is currently operating within 600 schools in 27 states. Another way Ford gives back group
of volunteers to its community is through its Ford Volunteer Corp. The Ford Volunteer
Corps are a special group of volunteers who rebuild homes in poverty- stricken areas.
Every year Fords holds a Global Day of Caring in which thousands of volunteers engage in
building projects in communities throughout the world. Ford also spreads awareness of
the company and its brand with Ford Community Day. Ford Community Day is a fair that
offers free food and games while inviting community members to learn more about what it
has to offer.

VALUES
 People: Our people are source of our strength. They provide our corporate intelligence
and determine our reputation and vitality. Involvement and teamwork are our core
human value.
 Products: Our products are the end result of our efforts, and they should be the best in
serving our customers worldwide. As our products are viewed so are we viewed.
 UNIVERSITY OF LUZON
COLLEGE OF ACCOUNTANCY
Dagupan City

Next 3 years

Long Term Specific Strategies

Objectives
Increase Ford’s Ford ranked the third position in auto market share in auto
market share in America in 2014. To achieve the leading
position in the U.S
position in the market share in America, Ford Motor has to do
automobile aggressive marketing such as spending much more money on

market advertising ( on TV, Internet, social network etc.), offering big

promotions for product with slow sales such as Focus and C-
Max), or hiring experts in auto industry to evaluate the best-
selling products in order to get more public attention.

Increase Ford’s Product Development:

1. Increase such more research and development
profit/sales
expenditures to improve next products (safer, more fuel
saving, more attractive appearance, etc.) the better cars,
the more customers are willing to buy.
2. Develop the cheap cars to compete with rival cars. Ford
have already released Fiesta S sedan $14,790- one of the
cheapest car in the U.S. However, a cheap car does not
come with good quality in general. As a result, the image
of Ford could become worse. To avoid that, Ford needs
serious efforts in research to create a well-balance car in
stable quality and reasonable prize. If it works, much
Ford’s cheap cars will be sold.
RETRENCHMENT:
If there is a recession or depression, or the sales
decreases, Ford has to reduce the number of workers and
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showroom, shut down plants not working in order to save costs
and to avoid heavy loss.

Become a Green  Research and develop in producing vehicles using blends

of biodiesels and ethanol fuel or gasohol or solar energy.
Company
 Corporate with scientists to produce hybrid electric
vehicles, plug-in hybrid electric vehicles, battery electric
vehicles and compressed-air vehicles.
 Replace any part in assembly plants which is sold, emit
too much CO2, and consumes too much energy

Continue to exploit China, India and Arab Audi are the potential markets with large
population, emerging rich people. If Ford does business well in
potential markets
these countries, Ford will gain much revenues and profits. To
make the prediction comes true: Ford should build plans or
joint venture/ partnership with domestic companies in those
nations to make consumers believe that they have a serious and
long-term investment. Building assembly plants and forming
cooperative arrangement with domestic auto parts suppliers
one of the ways to cut import costs and to decrease the price of
products. Besides, Ford also contributes to those national
societies communities through creating more jobs for people

RECOMMENDATION FOR ANNUAL OBJECTIVES

 Increase global vehicles sales and automotive operating margin

 Increase 5% of market share per year
 Increase up to 15% of total revenue and decrease 10% cost of inventory
 Expand new markets and production, incessantly research taste and preferences of
consumer in that market in order to improve production to suit each different
regions
 UNIVERSITY OF LUZON
COLLEGE OF ACCOUNTANCY
Dagupan City

 Create innovations will gain diverse customers from ordinary customers to luxury
customers (potential customers) in the world
 Gather customer feedback and apply it to the creation of better products and
services to meet customer needs
 Set a standard labor reform
 Reduce emission, water consumption for the long run

FORECASTED RATIOS
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PROJECTED FINANCIAL STATEMENTS

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RECOMMEND SPECIFIC ANNUAL OBJECTIVES AND

POLICIES
 ANNUAL OBJECTIVES:
- Increase global vehicle sales and automotive operating margin
- Increase 5% of market share per year
- Increase up to 15% of total revenues and decrease 10% cost for inventory
- Expand new markets and production, incessantly research taste and
preferences of consumers in that market in order to improve production to
suit each different regions
- Create innovations will gains diverse customers from ordinary customers to
luxury customer s ( potential customers) in the world
- Gather customer feedback and apply it to the creation of better products and
services to meet customer needs
- Set a standard labor reform
- Reduce emission, water consumption for the long run.

 ANNUAL POLICIES:
- Fix a price based on consumer pocket: Ford id ready for reducing prices until
products will be sold a lot. A strategy is to make a good profit on selling at
lower prices will bring the need for products to reach the global level.
- Materials and human resources: just buy enough raw materials to produce.
Thus, it will save a lot of money, fast payback and reduce inventories.
Besides, the high wages paid workers also help reduce product prices.
Because of the high salary, workers totally focus on their work without
having to worry too much for the other issues, the productivity of labor is
higher. Since then, production cost will also reduce.
-
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- Reduces prices but do not reduce the quality of the products: Ford does not
reduce salary or raises the price just to get profit.
- Reward: Reward for employees who achieve high performance, and have lots
of contribution to work
- Training: Every year, Ford Motor will have a special training for employees to
enhance their skills with strict safety standards of Ford
- Corporate Social Responsibilities: Contribute to environmental
improvement( environmental action plan like promoting re use and recycling
to make effective use of limited resources for the future); support community
activities ( focuses on community life, education, and safety)
- Collaboration with Suppliers: Support of supplier activities

RECOMMEND PROCEDURES FOR STRATEGY REVIEW

AND EVALUATION

STEP 1: REVIEWING THE UNDERLYING BASES OF FORD MOTOR

STRATEGY

- Prepare revised Internal Factor Evaluation (IFE) matrix: Ford should

concentrate on the changes in the management, marketing, production,
operation, Research and Development
- Compare revised to existing Internal Factor Evaluation (IFE) matrix
- Prepare revised External Factor Evaluation (EFE) matrix
- Compare revised to existing External Factor Evaluation (EFE) matrix
 UNIVERSITY OF LUZON
COLLEGE OF ACCOUNTANCY
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STEP 2: MEASURING FORD’S PERFORMANCE

- Compare expected results to actual results, evaluate individual performance,

assess progress toward meeting stated objectives. Besides, Ford need to
evaluate the financial ratios through comparing Ford’s performance to
competitors, industry averages.

STEP 3: TAKING CORRECTIVE ACTIONS

CONCLUSION

If Ford Motor Company adopts all our group’s recommendations, they will have many
benefits:

 Ford will have possible ability to overcome economic crisis (recession/ depression),
to avoid suffer heavy loss in the future.
 Ford’s market share will increase in the U.S and spread out in international market
such as China, India etc.
 It is possible for Ford to pass General Motor and become the U.S leading automaker.
 It is clear that when producing eco- friendly products, Ford can win the hearts of the
public and meet higher customer (environmentalists) demand. As a result, the
image of Ford could be better.
 They can improve effectively their weaknesses and strengthen their strengths.
 Decreasing price reasonably helps more consumers afford its products.
Consequently, Ford will gain more sales revenues.
 They can survive in long – term intense competition with rivals.
 It is expected that Ford will increase 5% in profits in 2015 than that in 2014 (net
income is $3.19 billion).
 All recommendations could help Ford maintain their mission and vision statements.
 UNIVERSITY OF LUZON
COLLEGE OF ACCOUNTANCY
Dagupan City