This paper presents a business analysis of Ford Motor Company within the context of the global automobile industry. It examines Ford's financial position, market standing, and strategic initiatives alongside competitor profiles of General Motors and Daimler/Chrysler. The paper highlights Ford's distinction as the only major U.S. automaker to decline federal bailout funds while remaining profitable, and details its Best Practice Replication Process (BPRP) as a knowledge management tool. Additionally, the analysis covers Ford's energy efficiency programs, environmental commitments, and cost-reduction strategies, concluding that these practices position Ford as a self-sustaining industry leader.
Ford Motor Company ranks 4th on the Fortune 500 list and 4th on the Global 500 list, and is the second-largest auto manufacturer in the world. Ford holds the advantage of Ford Motor Credit; however, due to Firestone tire recalls, prices fell to their lowest levels in years, with cash reserves sinking to $4.1 billion. The company spent $13 billion on acquisitions and an additional $3.5 billion to cover the tire recall. Ford is also environmentally focused, pursuing cleaner engine emissions, partnering with environmental groups, and investing in solar power.
Ford is concentrating on cost-reduction programs and building smaller, more fuel-efficient vehicles to balance its global portfolio and keep pace with a worldwide shift in consumer demand. While the company is expected to remain profitable, profit levels are anticipated to be lower than in previous years. The company also faces an ongoing challenge with unfavorable currency transactions.
Ford reported higher total assets in the second quarter of 2012 than in the last quarter of 2011, as well as higher liabilities in the second quarter of 2012 compared to the last quarter of 2011. More equity company stock was also reported for the second quarter of 2012 compared to the last quarter of 2011. However, individual assets were lower in the second quarter of 2012 compared to the last quarter of 2011.
GM posted more than $150 billion in sales and revenue for 2011, with a net income of $9.29 billion. GM holds 15.1% of the automobile market, with sales in more than 200 countries, making it the largest auto manufacturer in the world with $183 billion in global sales and $5 billion in profits. GM ranks 3rd on the Fortune 500 list and 3rd on the Global 500 list, and has reported technological alliances with Toyota and Honda Motor. GM offers GMAC Financial Services for mortgage, auto, and business finance, and has electronic business and digital technology partnerships with DirecTV and the OnStar system. However, GM reports that its growth has been stunted by recalls.
"Chrysler's market position and financials"
Chrysler Group reported a net income of $436 million in the second quarter of 2012, with net revenue of $16.8 billion for the quarter — a 23% increase over the same quarter of the prior year. Chrysler reduced its net industrial debt from $2.1 billion a year earlier to $432 million as of June 30, 2012. The U.S. market share for Chrysler increased to 11.2% from 10.6% a year ago.
Ford was the only major car manufacturer that did not accept a federal bailout, and the company reported profits for two consecutive years. Ford also captured a significant share of the market from competitors and increased its sales by 20% — approximately double the sales growth of the rest of the auto industry (Manufacturing Industry News, 2012). Among its best practices, Ford sold a technology license for its processes to the U.S. Navy Aircraft Carrier Team One. Ford's Best Practice Replication Process (BPRP) is a knowledge management tool designed to facilitate collecting, approving, and tracking the value of replicating highly leveraged practices throughout an enterprise (Ford, 2012).
Ford has also undertaken an initiative to consolidate and redesign its data centers using best practices identified by the U.S. Department of Energy (DOE) and the EPA aimed at reducing energy consumption. Total facilities-related carbon dioxide emissions at Ford were reduced by approximately 50% from 4.8 million metric tons, and CO2 emissions per vehicle were reduced by 27%. Ford reports using energy performance contracting as a financing tool to upgrade and replace infrastructure at its plants, commercial buildings, and research facilities (Ford.com, 2012).
In addition, Ford has partnered with suppliers to replace inefficient equipment, funding capital investment over time through energy savings. Projects have been implemented to upgrade inefficient lighting systems, paint-booth process equipment, and compressed air systems, and to significantly reduce the use of steam in manufacturing facilities. Since 2000, Ford has invested more than $220 million in plant and facility energy-efficiency upgrades (Ford.com, 2012).
Ford also launched a three-year global effort to consolidate and redesign its data centers using best practices identified by the DOE and EPA's Energy Star program (Ford.com, 2012). Additionally, Ford implemented a PC power management system that powers down all desktop and notebook computers at night, and deployed a network-controlled system on plant air compressors in powertrain and vehicle assembly plants. These measures are expected to reduce Ford's annual energy costs by $1.2 million and its annual CO2 emissions by 16,000 to 25,000 metric tons.
"Ford as self-sustaining industry standard-setter"
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