This paper examines Ford Motor Company's corporate-level strategy following the severe financial losses it sustained during the 2008–2009 economic recession. The paper argues that Ford repositioned itself around a three-pronged sustainability framework encompassing environmental responsibility, financial recovery, and employee welfare. It discusses the company's investment in hybrid and electric vehicles, its eco-friendly building upgrades, its drive to capture cost-conscious consumers facing rising fuel prices, and its commitment to worker safety and community well-being. The paper concludes that this integrated sustainability strategy was instrumental in restoring Ford's profitability and long-term competitive standing.
The Ford Motor Company did not have an easy time dealing with the economic crash of 2008 and 2009. The company's losses totaled billions of dollars, and it had to apply for federal bailout money in order to stay in business. Fortunately, its customers quickly returned as the economy improved, and Ford began bringing in large profits once again. Its stock price also climbed dramatically after the recession: at the end of February 2009, Ford's stock price stood at $1.98, whereas it later reached $16.09 — more than eight times higher (Google Finance, 2011).
With this newfound success following a period of significant failure, Ford positioned itself as a profitable company and adopted a new corporate-level strategy in order to compete in a fast-changing vehicle market and deliver the kinds of vehicles customers want. This new strategy can best be described as being centered on sustainability — sustainability for the environment and the planet as much as for the company's finances and its employees.
For the environment, Ford is producing eco-friendly vehicles that benefit both the planet and the company. The price of oil has risen considerably over the past several years, bringing with it higher gasoline prices. As a result, it costs more for people to fill their gas tanks and drive their cars and trucks to work, school, or stores. Car companies are now competing with one another over which can produce vehicles that consume the least fuel and cost the least to operate.
Ford has developed several hybrid vehicles that run on both gasoline and electricity, and is also working on fully electric vehicles that would require no gasoline at all. The company's facilities — including its headquarters and production centers — are being made more environmentally friendly through the installation of solar panels and "green" roofs made of living grass. These upgrades help the environment by generating energy from the sun and improving building insulation.
These sustainable changes are also helping Ford remain financially viable. By producing hybrid cars that use less gasoline, Ford is simultaneously benefiting the environment and attracting customers who are looking for cost-efficient transportation. This is a sound strategy, because experts predict that gasoline prices will only continue to rise, meaning car buyers will increasingly seek vehicles that use little or no fuel. If Ford were to continue producing only fuel-heavy cars and trucks not perceived as "green," its competitors — including Chrysler and General Motors — would draw its customers away.
Ford is also pursuing financial sustainability by generating strong profits to offset the heavy losses it suffered during the economic downturn. According to its website, the company's focus on sustainability improved its financial performance by prompting changes to its manufacturing processes to meet shifting demand, and by streamlining operations to reduce costs and better serve customers around the world (Ford, 2010). This approach reflects an understanding that corporate purpose and profitability are not mutually exclusive but can reinforce each other when strategy is well aligned.
"Worker safety, training, and global community impact"
Overall, this strategy is helping Ford increase its profitability and value. The company is saving money by becoming more environmentally friendly, while simultaneously earning money by producing green cars that customers want. Its sustainable approach to financial management has enabled it to expand globally and meet the demand of growing markets such as China and India, while improving operational efficiency and responsiveness. By focusing on sustainable communities, Ford is cultivating a workforce that is committed to the company for the long term. The corporate-level sustainability strategy is, by all accounts, working well for Ford.
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