Global Innovation and Sustainability: Ford Motor Company

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Table of Contents…………………………………………………………………………………………………1 Abstract……..………………………………………………………………………………………………………..2 Case Study: Economic Impacts of the Auto Industry………………………………………………3 Influence of the Auto Industry………………………………………………………………………3 Fall of the U.S. Auto Industry………………………………..……………………………………………….3 Government Bailout……………………………….…………………………………………………….4 Ford’s Reaction to Crisis……………………………………………………………………………………….5 Ford Motor Company Overview……………………………………………………………………5 Henry Ford’s Vison………………………………………………………………………………………5 Rebranding and Strategizing………………………………………………………………………...6 Restructuring Progress………………………………………………………………………………………...7 Globalization………………………………………………………………………………………………………..8 Growth in New Markets………………………………………………………………………………..9 Ford’s Innovation………..……………………………………………………………………………..10 Supporting New Growth ……………………………………………………………………………10 A Letter From William Clay Ford Jr……………………………………………………………..11 Developing New Products…………………………………………………………………………………..11 Working as One Team………………………………………………………………………………………..13 Conclusion………………………………………………………………………………………………………...15

ABSTRACT:

In 2008, the automotive market in the United States crashed; The United States Government used a portion of the ‘$700 billion bailout fund’ to bail out General Motors and Chrysler. Ford, however, turned down the bailout funds and chose to use a government loan program instead. This decision buried Ford Motor Company under billions of dollars in debt. This paper explores the turmoil that Ford Motor Company faced, and the innovation that has allowed them to overcome their endeavors. This paper will also cover some of the innovation and vision that Ford has developed to create a future of sustainable success.

CASE STUDY: ECONOMIC IMPACTS OF THE AUTO INDUSTRY

The influence of the automotive industry runs deep in the United States economy. The auto industry supports numerous jobs and economic benefits through related employment at dealers, suppliers and service shops, and through the expenditures of people employed by those industries. One recent study found that approximately 8 million private-sector jobs are impacted by U.S. auto manufacturers, suppliers and dealers, and the industry contributes more than $500 billion in compensation annually (Hill, 2010). The auto industry has one of the highest multipliers of any industry in the U.S. economy, and is sufficiently large that its growth or contraction can be detected by changes in the GDP. Studies have shown that if the domestic auto industry were to fail, up to 3 million direct and indirect jobs would be lost within the first year. This same study said the loss of the domestic auto industry would also reduce personal income in the U.S. by more than $398 billion over three years, and would cost the government more than $156.4 billion due to increased transfer payments, decline in Social Security income, and decline in personal income taxes (Cole, 2008). FALL OF THE U.S. AUTO INDUSTRY

It was only a few short years ago that the economy in America took a detrimental downfall, leaving many Americans without jobs. Many companies were left in significant financial distress, and even bankruptcy.The U.S. automotive industry took a substantial hit in the recession. In December 2008, the ‘Big 3’ auto companies (Chrysler, GM, and GMAC) asked the government for $34 billion in bailout funds to avoid bankruptcy. These companies expressed that their demise would trigger over 3 million layoffs within one year, thus plummeting the economy into further recession (Amadeo, 2011)

In January 2009, the government used $24.9 billion of the $700 billion bailout fund to bail out Chrysler and GM. The purpose of these funds was to be allocated as operating cash and available auto loans for car buyers. Ford, although not under the ‘Big 3’, was still among the leading brands incurring vast amounts of debt. Ford Credit, instead, planned to use funds from the Term Asset-Backed...
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