Ford Motor Management Accounting
Case Study Report- Ford Motor
Introduction Ford Motor Company (Ford) is an American multinational corporation which produces cars and trucks. The automaker was founded by Henry Ford and incorporated on June 16, 1903. Ford is the second largest automaker in the U.S. and the fifth-largest in the world based on annual vehicle sales in 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce, using elaborately engineered manufacturing sequences typified by moving assembly lines. In the first part of report, we will analysis the financial issue of how Ford Motor Company deals with the largest slump in sales on 2008. This will be examined in the aspect of Cost-Volume-Profit (CVP) Analysis. Then the result of the measures taken by Ford will be evaluated through the approach of Return on Investment (ROI) based on the annual report from 2008 to 2010. Recommendations by our own to Ford will be also discussed based on the result of 2010 to future. In the second part of essay, we will analysis the ethical issue involved in Ford Motor Company. The ethical dilemma of labor issue in Ford will be examined by using the concept of Corporate Social Responsibility and the IMA guidelines for ethical behavior. Lastly, we will suggest some solutions for the unethical behavior.
I. Financial Issue In 2008, Ford has experienced the largest decrease in sales in history - a net loss of $14.6 billion due to lower demand affected by financial crisis. Ford has accumulated loss since 2006 for a total of $33 billion. Therefore, the company introduces the cost-cutting plan - One Ford Plan: Focusing on producing high quality and safety, fuel-efficient, small vehicles of its core brands to meet the lower demand of automobiles globally. On the management accounting perspective, this is done by reducing cost on workforce, and discontinued outdated brand to eliminate excessive manufacturing capacity.
Introduction Ford Motor Company (Ford) is an American multinational corporation which produces cars and trucks. The automaker was founded by Henry Ford and incorporated on June 16, 1903. Ford is the second largest automaker in the U.S. and the fifth-largest in the world based on annual vehicle sales in 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce, using elaborately engineered manufacturing sequences typified by moving assembly lines. In the first part of report, we will analysis the financial issue of how Ford Motor Company deals with the largest slump in sales on 2008. This will be examined in the aspect of Cost-Volume-Profit (CVP) Analysis. Then the result of the measures taken by Ford will be evaluated through the approach of Return on Investment (ROI) based on the annual report from 2008 to 2010. Recommendations by our own to Ford will be also discussed based on the result of 2010 to future. In the second part of essay, we will analysis the ethical issue involved in Ford Motor Company. The ethical dilemma of labor issue in Ford will be examined by using the concept of Corporate Social Responsibility and the IMA guidelines for ethical behavior. Lastly, we will suggest some solutions for the unethical behavior.
I. Financial Issue In 2008, Ford has experienced the largest decrease in sales in history - a net loss of $14.6 billion due to lower demand affected by financial crisis. Ford has accumulated loss since 2006 for a total of $33 billion. Therefore, the company introduces the cost-cutting plan - One Ford Plan: Focusing on producing high quality and safety, fuel-efficient, small vehicles of its core brands to meet the lower demand of automobiles globally. On the management accounting perspective, this is done by reducing cost on workforce, and discontinued outdated brand to eliminate excessive manufacturing capacity.
References: http://www.wsws.org/articles/2010/oct2010/ford-o28.shtml http://corporate.ford.com/microsites/sustainability-report-2008-09/operations-products-brands#mercury http://www.autoblog.com/2009/03/12/fords-new-deal-with-uaw-gets-wages-down-to-55-hour/ http://www.zeenews.com/news573095.html http://www.thaindian.com/newsportal/business/labour-trouble-brewing-in-ford-india_100517552.html http://www.caradvice.com.au/113530/ford-motor-co-outsells-general-motors-in-us-in-march/