Ford Motor Company Ford Case Term Paper

Length: 13 pages Sources: 20 Subject: Business Type: Term Paper Paper: #18585965 Related Topics: Complacency, General Motors, Company Background, Automotive
Excerpt from Term Paper :

In October they are forced to half dividend. On the 17th October Ford posts its first consecutive quarterly loss in a decade. (BBC News Ford chief Jacques Nasser ousted).

Though overwhelmed by the situation Bill Ford does his best to improve their financial situation and succeeds for a short while. But Ford's true "revitalization" would only be brought about by the CEO who came after Bill Ford, Alan Mulally (who is the present CEO).

Ford Motor Company started the last century with a single man envisioning products that would meet the needs of people in a world on the verge of high-gear industrialization. Today, Ford Motor Company is a family of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, and Volvo. The company is beginning its second century of existence with a worldwide organization that retains and expands Henry Ford's heritage by developing products that serve the varying and ever-changing needs of people in the global community."(Ford Motor Company)

Q.2 to what extent are Ford's current (future) cash problems the result of a weakness of competences or poor product positioning, and can Mulally's new initiatives solve Ford's problems?

Ford's current cash problems are indeed strongly connected to the poor decisions the former CEO's at the company have taken. They have focused for a long period of time all their resources, both financial and the ones involved in the actual production process, in trying to increase the level of sales for their trucks, light trucks and SUV's, all of them having been successful in the past. However, when it became obvious that these models were not among their customers' favourite ones anymore and that the market had changed, they should have moved their focus towards producing new-models and fuel efficient cars, that were in high demand.

The first person in a long time to understand the changes that needed to be done at the company with respect to the products in turned out was Alan Mulally (who is currently CEO at Ford Motor Company).

Ford's preliminary financial results for the first quarter of 2007 are indicative of an improvement in executing the four priorities they have: "restructuring the company, accelerating product development, funding our plan and working effectively as one team," said President and Chief Executive Officer Alan Mulally. "I am pleased that the basics of our business are improving, but we still have a lot of work to do. Our first quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance," Mulally added. Ford had a first-quarter revenue of $43 billion, which represented an increase from last year's $40.8billion." The increase primarily reflected mix improvement and favourable currency exchange, partially offset by lower volume."(Ford Motor Company Press Release, April 2007)

But how did Mulally manage to improve the situation at Ford? His predecessor had been Bill Ford, who had become head of the company in 2001.

When Bill Ford became CEO of Ford Motor Company in 2001 he had to face an almost tragic situation. The company had registered huge losses, especially on the international markets. His goal was to somehow obtain profit again. In order to achieve that they "had to restock the product pipeline" which they successfully did thus managing to obtain a profit in 2005. But it soon become obvious to Bill Ford that he was not the right person to turn around this company. "It was clear to me we need someone with a skill-set to take us further. Each person's skill-set doesn't fit every company at every time." But with regard to what the "skill set" of the person he wanted, as CEO should be, he had no doubt: "I wanted someone with major turnaround experience. And who was ready willing and able. it's all to the good of Ford Motor Co. I feel good I could attract Alan here." Thus in September 2006 Alan Mulally became Ford's new CEO.

The characteristics that Bill Ford expects from his successor include his being a "tough-minded, tightly-focused operations chief." Some received Mulally's appointment as CEO rather skeptically. Their uneasiness may be justified if Mulally's background (working experience) were to be taken into consideration. He has formerly worked at Boeing where he was twice overlooked as a possible future CEO. Furthermore, not only is he completely inexperienced with regard to the auto industry, but he has also decided to work for a company that is currently dealing with major restructuring. When faced with such questions from the media he answered...


can indeed compete "in the design and manufacture of sophisticated products" with the world leaders in these domains.

Undoubtedly there are also people optimistic with regard to the beneficial changes the Mulally's becoming CEO at Ford may bring about. Among his supporters is Earl Hesterberg (former marketing chief at both Ford Europe and Ford North America and now CEO of auto retailer Group 1 Automotive) who believes:" Turning it over to an outsider and getting a fresh perspective are both good things. An outsider may have more success in aggressive cost cutting, but at the end of the day, Ford needs to revitalize its product offering and brand image." And Mulally can be just the person that the company is in need of right now. In 2006 just after being chosen as CEO he is known to have declared: "I think it will be fun. Automobiles are fun and exciting. We need them. They are a part of our lives." His commitment to his new job and his enthusiasm for being a part of Ford's transformation are obvious and may enable the auto giant to win back some of the competitive advantage they have been unsuccessfully striving for, so far.

But how will he be able to do that after all?

In an interview published in Business Week magazine, new CEO Alan Mulally and (now) Executive chairman Bill Ford; have revealed the ideas they want to implement in order to improve Ford's position on the capital market.

They are looking for ways to improve and boost the company's balance sheet. "Ford has solid liquidity, but its falling market share and costs of incentives, plus the pending buyout of some 30,000 employees will bring about a significant decrease in the company's cash." (Business Week an Interview with Bill Ford and Alan Mulally (7th September 2007)).

Another important thing they shall have to deal with is the large number of brands the company has bought throughout the years. These brands have been as successful as forecasted and have not brought about the major increase in profits that many had expected. They have proven to be quite an uninspired and not thoroughly thought trough investment. Perhaps the marketing research department at Ford were not as efficient and professional in their data gathering and analysis as they could have been. That may be why Mulally and Ford have decided to "focus the company on a smaller number of brands. Ford and Volvo brands are givens. But Ford must soon decide what brands out of Lincoln, Mercury, Land Rover and Jaguar it will go forward with. There's mounting consensus on Wall Street and within the company that management attention and capital are spread too thin. " (Business Week an Interview with Bill Ford and Alan Mulally (7th September 2007)) in addition to the above-mentioned changes, lower variable costs are also taken into consideration. "By some estimates, Ford spends some $800 a vehicle more for parts and components than for example, Renault." (Business Week an Interview with Bill Ford and Alan Mulally (7th September 2007)) However, though cutting costs is an understandable and much-desired goal for many companies, they must manage to do it without affecting in any way the quality of their products. After all, customers have certain expectations with regard to what a specific brand must offer and what it stands for and are not all content when these expectations are not met. Thus Ford shall also "focus and enliven the company's brand strategies and marketing to create more trust and desire for the brands the company retains." (Business Week an Interview with Bill Ford and Alan Mulally (7th September 2007))

It has been observed that the divisions of manufacturing and engineering at Ford are responsible for the annual creation of over 2000 products that do not fulfil the company's required quality standards. Thus, the last but one element on Mulally's list of future changes at Ford, is to improve the efficiency and productivity of those two departments so as to insure that in all of Ford's worldwide plants only the best vehicles are being produced.

And finally perhaps the most important challenge they are currently facing is to "stop the disastrous…

Sources Used in Documents:


Ford Motor Company Press Release (April 2007) AvailableOnline 29th April 2007)

BusinessWeek an Interview with Bill Ford and Alan Mulally (7th September 2007) Online. Available Http: (accessed 29th April 2007)

Arrogance and Complacency Damaged Ford (18th September 2006) Online.AvailableHTTP (accessed 28th April 2007)

Ford Motor Company (undated) a) Online. Available HTTP:

Cite this Document:

"Ford Motor Company Ford Case" (2007, April 29) Retrieved July 28, 2021, from

"Ford Motor Company Ford Case" 29 April 2007. Web.28 July. 2021. <>

"Ford Motor Company Ford Case", 29 April 2007, Accessed.28 July. 2021,

Related Documents
Ford Case Strategic Case Study: Ford Motors
Words: 1038 Length: 4 Pages Topic: Business Paper #: 22637276

Ford Case Strategic Case Study: Ford Motors Company Overview Ford Motors is one of the oldest and largest auto manufacturers in the world, and despite being enormously hard-hit by the economic downturn of the recent past the company has returned to profitability and has been successful in redefining its strategy and realigning its resources to achieve its strategic ends (Ford, 2012; Hoover, 2012; Reuters, 2012). With internationally-based sourcing, manufacturing, distribution, and sales operations,

Ford Motor Company Is an
Words: 1451 Length: 5 Pages Topic: Economics Paper #: 69877781

Based on the data presented in the Table 2, it is revealed that Ford is a company that is good for the investment opportunity. The profitability ratios are one of the key ratios to determine the financial health of a company. Based on the data in Table 2, Ford Company demonstrates the increase in the profitability ratios between 2008 and 2011. For example, the ROA increase from the loss of

Case Study of Ford Motor Company
Words: 2344 Length: 8 Pages Topic: Transportation Paper #: 53171876

Ford Motor Company Case Study of Ford Motor Company History, Development and Growth Ford Motor Company has been a vital American automaker since its incorporation in 1902. The car maker was started at that time by Henry Ford and has continued with some member of the family on the board of directors since that time. The company began selling individually manufactured vehicles, but moved to an innovation devised by the founder soon after.

Ford Motor Company -- Flowchart Analysis Ford
Words: 1039 Length: 3 Pages Topic: Transportation Paper #: 77118940

Ford Motor Company -- Flowchart Analysis Ford Motor Company is one of the largest manufacturing companies in the global marketplace. Fiscally, Ford has had two major recent periods; one of prosperity, one of decline. Period #1, the late 1980s to 19979, showed a steady pattern of growth, about 5-7% per annum. Sales in 1998 were down 6%, up 14% in 1999, giving the decade an average of 5.4% growth and a

Ford Motor Company's Current Market Position Company
Words: 2760 Length: 8 Pages Topic: Transportation Paper #: 29909558

Ford Motor Company's Current Market Position Company Overview Quality Issues at Ford Motor Company Human Resources Role Strengths Weaknesses Opportunities Threats Financial Impact of Recalls on Ford Motor Company The Ford Motor Company was founded by Henry Ford in 1903 who along with 11 other investors signed the article of incorporation for the organization. Since then, the Ford name has experienced tremendous growth and has been awarded with substantial significance in the automotive industry. It is one of the

Ford Motor Company the Purpose
Words: 2351 Length: 9 Pages Topic: Business Paper #: 33819583

Those five steps are: Analyze the Situation and ask the following questions: Are we making any major changes in our business process? How do those changes impact our employees job functions? What information and training will our employees need to continue being successful in their jobs? How will our employees best accept and integrate this information and training? How do our employees learn? How can we get this information and training to our employees? Are there any