The Company's Dilemmas Facing Ford Motor Company
Like many business Ford Motor company has its dilemmas as well. Facing Ford Motor’s was a shut down their exiting ling of the Mercury vehicle. The Mercury line tried to be revamped into a model of vehicles people wanted. In May 2010 Ford reported double digit sales (Hirsch, 2010). This was not strong enough to save the Mercury line which accounts for five percent of the total company sales. By shutting down this line, Ford would be able to focus on other lines that were becoming more popular. The major characters are Ford Motor Company, General Motors, and the Government.
Company Background
In 1903 Ford Motor Company became incorporated with $28,000. The first car sold was a month after the incorporation. The company continued to build …show more content…
and added large plants that used standard and interchangeable parts. The plants were big enough to have all parts for the vehicles in them. Many assembly lines formed in 1913. Several model cars were built, like the Model A and the Model T. Production of sales slowed down during World War II as the production shifted to support the war. Factories were producing tanks and terrain vehicles. After World War II, factories resumed back to normal production products. As years went on, Ford improved their vehicles adding safety features like air bags, studier frames, enhanced bumpers, and more engine power.
In 1939 the Mercury line was introduced by Edsel Ford (Rogers, 2010). The line of vehicles was very popular. The vehicles were Ford’s distinctive line of top of the class vehicles. In 1978 the sales peaked at 579,498 vehicles. In 2009 there were 92,299 Mercury vehicles sold. In May 2010 sales were down to 9,128. For people who owned a Mercury it was the distinctive choice of class and style. The vehicle design was modified over the years to fit the changing times. Families would chose to buy Mercury just because their Parents owned a Mercury. Loyal customers are important as they are returning customers.
Rebuilding Attempt
Ford made efforts to save the Mercury line of vehicles. For many years Mercury has been the mid-sized, mid-priced vehicle. Many families enjoyed the looks and the quality Mercury provided them. Some Police departments used Mercury in as their fleet of vehicles. For instance, in Iowa the city of Independence used Mercury in 1979. In 2010 Mercury was hard pressed to revive the brand unless a new product for the brand. Yet Ford realizes that the public may see Mercury as a lost brand. This was due to the reduced sales.
The company modified the car to fit a younger buyer’s market. Yet the changes were not successful with the younger market. Ford decided to discontinue the small Mercury car and replaced with a minivan and SUV models. The Mercury Cougar was re-introduced to the product line. In the mid 2000’s major updates were made to the car line to attract new buyers. Ford even tried to rename some of the vehicles in an effort to draw in new customers. Revamped vehicles received new names.
An effort was made to revamp the Lincoln, a spinoff of Mercury, line of vehicles to target the younger generation market. The restructure made Lincoln a competitor with other similar lines of vehicles, like the Lexus. The Lincoln town car was discontinued in 2012. The big luxury cars were no longer a popular item on the market. Over the years Ford has built many quality vehicles like the Mercury line. Yet like any company, Ford faces problems too.
Industry
Ford decided to mortgage all their assets in 2006, which provided them enough cash cushion for hard times. This strategic planning paid off as Ford did not have to accept any Government bailout funds. The competition, General Motors accepted the Government bailout funds on March 2009 (CNN, 2009).
General Motors was going through their tough times at the time that Ford was looking to revamp the Mercury line of vehicles. Ford made several attempts to rectify the vehicle line of possible problems but with no avail. The loyal customers were not happy as they were happy Mercury customers. In 2011, the Mercury line was discontinued.
There were approximately 276 dealers that only sold Mercury and Lincoln vehicles. By Ford Motors removing Mercury this meant the dealers were facing significant losses if they did not transition into different models. Ford provided incentives to the dealers who stocked Mercury vehicles.
Like Ford, General Motors was facing shutting down their Pontiac line of vehicles. In 2010 General Motors closed the Pontiac brand. Chrysler as well faced their share of difficulties. General Motors bought Chrysler in an effort to save the brand. GM shut down their Pontiac and Saturn vehicles at the same time in an effort to save the company financially. In 2009, Oasis Consulting released their audit findings on Ford Motor Company. The executive summary indicates the company has challenges but are not as bad off as General Motors who will file bankruptcy. The summary goes on to indicate that no bailout funds would be needed as the company is estimated to sell over 12 million. Government bailout funds were paid out to Ford’s competitor while Ford remained solvent through that time.
Management Outcome Shutting down the Mercury line of Ford vehicles was a difficult decision to make when the Ford financing area was improving.
The May sales were reported at a higher cost due to this decision. This was found true by the rental car companies who would replace their fleet with other models. Another push from Ford was their decision to sell the Volvo car unit to China’s Geely area. These changes would allow Ford to focus on the Lincoln line of vehicle in North America. Ford continues to prosper as it earns an operating profit of $463 million in 2011 than it did the prior year. Also Ford has released dividend shares to stockholders, which is the first payout since 2006. Ford’s corporate citizenship includes employee volunteering in community projects. Key initiatives that drive the company is: an aggressive restructure to operate profitability at existing demands and changes to a model mix; accelerate a development of new products to which customer’s value; finance a plan to improve the balance sheet; work together as one team that leverages global …show more content…
assets. Ford continues to grow as their strategic management has shifted. They have outsourced jobs to foreign countries. In 2010, Ford had forty percent of their workers employed in America. The USA (United Auto Workers) supplies the major vehicle companies with workers. This United States labor supply lead to higher costs for production workers. Therefore, many of the jobs transitioned to Mexico as well as Canada. The average wage for the workers in Mexico is less than a tenth of what the American worker makes (Snyder, 2010). Another measure Ford took was to shut down many dealerships across America. By eliminating the costs and lowered the production costs, have been cost savings for the company.
Although Ford experiences lower production costs, they have the additional cost of training an expatriate. An expatriate is an American worker who agreed to work in the company facility in the foreign country. Expatriate’s find the transition into another country can be difficult as they have to adapt to the foreign cultures. Ford also has to adapt as well to bring some of the culture into the company’s policies.
Conclusion
Ford Motor Company has been in business since 1903 with only $28,000 to incorporate.
Ford has created many cars such as the Model A and the Model T. It was Edsel Ford, who introduced the Mercury line to Ford. The family car was a popular item which attracted returning loyal customers. Ford was able to build many factories and many other models of cars throughout the years. Ford understood they were losing the market in the Mercury line. The production numbers showed as in 1978 there was 579.498 vehicles made. These numbers dropped and by 2009 the production reports were down to 92,299 vehicles made. They made several attempts to restructure the vehicle to attract younger buyers. They also tried to revamp the Lincoln line which is a spinoff of
Mercury.
Like General Motors who shut down their Pontiac line of vehicles, Ford has shut down their Mercury line of vehicles. The decision came after their failed attempt to revamp the line of vehicles with upgrades to their looks. While Ford’s competitor was accepting Government bailout funds, Ford stayed solvent. They were able to shut down a number of dealerships across America. Another move Ford made was to transition factories to foreign countries. Those countries have lower labor costs, which ultimately saved the company money.
Today, Ford stays strong with their product. Their management decisions were paying off as the investors saw dividends paid for the first time in 2011 after four years of no dividends. The company is focusing on leveraging their global assets by utilizing foreign factories. The company has also increased their corporate citizenship. Employees volunteer throughout the community on various projects. Ford stays strong and solvent today.
Company Background
In 1903 Ford Motor Company became incorporated with $28,000. The first car sold was a month after the incorporation. The company continued to build …show more content…
and added large plants that used standard and interchangeable parts. The plants were big enough to have all parts for the vehicles in them. Many assembly lines formed in 1913. Several model cars were built, like the Model A and the Model T. Production of sales slowed down during World War II as the production shifted to support the war. Factories were producing tanks and terrain vehicles. After World War II, factories resumed back to normal production products. As years went on, Ford improved their vehicles adding safety features like air bags, studier frames, enhanced bumpers, and more engine power.
In 1939 the Mercury line was introduced by Edsel Ford (Rogers, 2010). The line of vehicles was very popular. The vehicles were Ford’s distinctive line of top of the class vehicles. In 1978 the sales peaked at 579,498 vehicles. In 2009 there were 92,299 Mercury vehicles sold. In May 2010 sales were down to 9,128. For people who owned a Mercury it was the distinctive choice of class and style. The vehicle design was modified over the years to fit the changing times. Families would chose to buy Mercury just because their Parents owned a Mercury. Loyal customers are important as they are returning customers.
Rebuilding Attempt
Ford made efforts to save the Mercury line of vehicles. For many years Mercury has been the mid-sized, mid-priced vehicle. Many families enjoyed the looks and the quality Mercury provided them. Some Police departments used Mercury in as their fleet of vehicles. For instance, in Iowa the city of Independence used Mercury in 1979. In 2010 Mercury was hard pressed to revive the brand unless a new product for the brand. Yet Ford realizes that the public may see Mercury as a lost brand. This was due to the reduced sales.
The company modified the car to fit a younger buyer’s market. Yet the changes were not successful with the younger market. Ford decided to discontinue the small Mercury car and replaced with a minivan and SUV models. The Mercury Cougar was re-introduced to the product line. In the mid 2000’s major updates were made to the car line to attract new buyers. Ford even tried to rename some of the vehicles in an effort to draw in new customers. Revamped vehicles received new names.
An effort was made to revamp the Lincoln, a spinoff of Mercury, line of vehicles to target the younger generation market. The restructure made Lincoln a competitor with other similar lines of vehicles, like the Lexus. The Lincoln town car was discontinued in 2012. The big luxury cars were no longer a popular item on the market. Over the years Ford has built many quality vehicles like the Mercury line. Yet like any company, Ford faces problems too.
Industry
Ford decided to mortgage all their assets in 2006, which provided them enough cash cushion for hard times. This strategic planning paid off as Ford did not have to accept any Government bailout funds. The competition, General Motors accepted the Government bailout funds on March 2009 (CNN, 2009).
General Motors was going through their tough times at the time that Ford was looking to revamp the Mercury line of vehicles. Ford made several attempts to rectify the vehicle line of possible problems but with no avail. The loyal customers were not happy as they were happy Mercury customers. In 2011, the Mercury line was discontinued.
There were approximately 276 dealers that only sold Mercury and Lincoln vehicles. By Ford Motors removing Mercury this meant the dealers were facing significant losses if they did not transition into different models. Ford provided incentives to the dealers who stocked Mercury vehicles.
Like Ford, General Motors was facing shutting down their Pontiac line of vehicles. In 2010 General Motors closed the Pontiac brand. Chrysler as well faced their share of difficulties. General Motors bought Chrysler in an effort to save the brand. GM shut down their Pontiac and Saturn vehicles at the same time in an effort to save the company financially. In 2009, Oasis Consulting released their audit findings on Ford Motor Company. The executive summary indicates the company has challenges but are not as bad off as General Motors who will file bankruptcy. The summary goes on to indicate that no bailout funds would be needed as the company is estimated to sell over 12 million. Government bailout funds were paid out to Ford’s competitor while Ford remained solvent through that time.
Management Outcome Shutting down the Mercury line of Ford vehicles was a difficult decision to make when the Ford financing area was improving.
The May sales were reported at a higher cost due to this decision. This was found true by the rental car companies who would replace their fleet with other models. Another push from Ford was their decision to sell the Volvo car unit to China’s Geely area. These changes would allow Ford to focus on the Lincoln line of vehicle in North America. Ford continues to prosper as it earns an operating profit of $463 million in 2011 than it did the prior year. Also Ford has released dividend shares to stockholders, which is the first payout since 2006. Ford’s corporate citizenship includes employee volunteering in community projects. Key initiatives that drive the company is: an aggressive restructure to operate profitability at existing demands and changes to a model mix; accelerate a development of new products to which customer’s value; finance a plan to improve the balance sheet; work together as one team that leverages global …show more content…
assets. Ford continues to grow as their strategic management has shifted. They have outsourced jobs to foreign countries. In 2010, Ford had forty percent of their workers employed in America. The USA (United Auto Workers) supplies the major vehicle companies with workers. This United States labor supply lead to higher costs for production workers. Therefore, many of the jobs transitioned to Mexico as well as Canada. The average wage for the workers in Mexico is less than a tenth of what the American worker makes (Snyder, 2010). Another measure Ford took was to shut down many dealerships across America. By eliminating the costs and lowered the production costs, have been cost savings for the company.
Although Ford experiences lower production costs, they have the additional cost of training an expatriate. An expatriate is an American worker who agreed to work in the company facility in the foreign country. Expatriate’s find the transition into another country can be difficult as they have to adapt to the foreign cultures. Ford also has to adapt as well to bring some of the culture into the company’s policies.
Conclusion
Ford Motor Company has been in business since 1903 with only $28,000 to incorporate.
Ford has created many cars such as the Model A and the Model T. It was Edsel Ford, who introduced the Mercury line to Ford. The family car was a popular item which attracted returning loyal customers. Ford was able to build many factories and many other models of cars throughout the years. Ford understood they were losing the market in the Mercury line. The production numbers showed as in 1978 there was 579.498 vehicles made. These numbers dropped and by 2009 the production reports were down to 92,299 vehicles made. They made several attempts to restructure the vehicle to attract younger buyers. They also tried to revamp the Lincoln line which is a spinoff of
Mercury.
Like General Motors who shut down their Pontiac line of vehicles, Ford has shut down their Mercury line of vehicles. The decision came after their failed attempt to revamp the line of vehicles with upgrades to their looks. While Ford’s competitor was accepting Government bailout funds, Ford stayed solvent. They were able to shut down a number of dealerships across America. Another move Ford made was to transition factories to foreign countries. Those countries have lower labor costs, which ultimately saved the company money.
Today, Ford stays strong with their product. Their management decisions were paying off as the investors saw dividends paid for the first time in 2011 after four years of no dividends. The company is focusing on leveraging their global assets by utilizing foreign factories. The company has also increased their corporate citizenship. Employees volunteer throughout the community on various projects. Ford stays strong and solvent today.