Case Analysis: Ford Motor Company
Global Strategic Management
March 4, 2013
Ford Motor Company: Organization Profile
Ford Motor Company Staying “Ford Tough”
Henry Ford established the auto company in June 16, 1903. An engineer by formation, Henry had a vision of making vehicles that would change society. He wanted to offer an affordable product to the public, one that his own workers could buy. His vision took him to model T in 1908, and to improve the manufacturing process with the conveyor belt at Ford’s Highland plant. The manufacturing capabilities kept on improving and in 1917 he built the Rouge plant that put the whole operation, from the raw material, to the final product, under the same roof.
In 1915 Henry Ford’s son, Edsel Ford joined his father in the company. Edsel brought to the company the desire of making a product not only functional, but stylish and beautiful. Ford became entirely family owned in 1919 when Henry, his wife Clara, and Edsel bought the outstanding shares for $105,820,894 (Chapman, pp. 128) .The company would hold to this status until 1956 when the company would allow outsiders to buy shares. For many years the image of the company was the same as its leadership. Henry Ford passed the presidency to Edsel Ford in 1919. Henry Ford reassumed the leadership after the death of Edsel in 1943. After Henry Ford resigned, Henry Ford II assumed the presidency. The company inherited by Henry Ford II was not the same. Ford had fallen behind General Motor (GM) and Chrysler. Henry Ford II knew he had to regain terrain, so he contracted the Whiz Kids (a group of former US Army Air Force officers), and created a “sophisticated management system including accounting and financial controls” (Chapman, pp. 128). With the finance side in check, Ford gained increased its position, and became the number 2 car company in 1950. Ford products were not fuel efficient, and when the gas prices rose in the 70s because of the OPEC embargo, Ford lost many consumers. The company responded by closing plants and cutting jobs. After the storm, the sun came out in the late 80s with the launch of Ford Taurus and Mercury Ford was on the top of the game once again. The desire to diversify made Ford buy other brands and include it in its family such as: Jaguar, Aston Martin, Land Rover and Volvo. Bill Ford assumed the presidency of the company in 2001. It was the first time in 20 years that the head of the company was a member of the Ford family. Bill Ford drove the company through one of the worst times in history for the company: right after the extensive (and expensive) Firestone tires recall, and the terrorist attacks of September 11, 2001. Bill Ford went to ups and downs during his presidency. He saw sales improving slowly from 2001 to 2006, but the increasing competition from foreign brands such as Toyota, Nissan and Honda made him realize that he needed help taking the company to the next level. Alan Mulally became the new CEO in 2006. He was a new face in the auto industry, coming from Boeing Corporation instead from inside Ford or from another auto company. Mulally “demonstrated leadership skills Henry Ford had established many years ago.” Mulally brought to the company new energy, and a brave new plan. His most risky decision proved to pay off in the end. He decided to raise money by mortgaging almost all of Ford’s assets including the brand. His audacity put Ford as the most trustworthy American company. The money raised by Mulally helped keep Ford out of the government bailout of 2009. Ford Motor Company: The Problem(s)
Ford has been a pioneer in the auto industry but it still faces a lot of problems to make it the number one in the industry. The increasing competition from other car companies to creatively and efficiently attract and retain customers made it difficult to gain the number one position. The economic crisis also made it hard to sell new vehicles. The quality of Ford vehicles have also gone...
Please join StudyMode to read the full document