The Rise and Fall of Ford Motor Company

Topics: Bhopal disaster, Ford Motor Company, Henry Ford Pages: 7 (2744 words) Published: June 27, 2010
The rise of multinational companies and increased global diversification by even small companies has resulted in people of diverse backgrounds and cultures working together in the same office or for the same organization. Conflict in such situations is predictable, but understanding the diversity issues can help companies implement programs designed to keep conflict at a minimum and to take full advantage of the many benefits which such diversity brings to an organization. Key to understanding how diversity is managed in multinational organizations is understanding the concept of corporate culture (which defines organizations), diversity programs and their use to minimize conflict among employees, and the unique problems that employees working overseas encounter. One of the biggest companies that have worked a lot on diversity is Ford Motor Organization. Ford Motor Company is an American multinational corporation and the world's second largest automaker, selling vehicles in 200 markets and with approximately 345,000 employees on six continents. Ford also is a family with a heritage of strong and clear values. One of the most essential of Ford values is their commitment to diversity and inclusion. For Ford, diversity is a means to an end. It is one of the ways the company is seeking to drive a transformation to a team-based workplace. To have meaningful relationships with customers (and other stakeholders) it is essential to have an understanding of their needs. Having a diverse workforce is one of the ways of building this capacity into the company. From the start, Henry Ford and the family of Ford employees have valued diversity. Ford's tactics worked. Employee turnover significantly dropped, and production increased significantly. Sales also increased, which meant Ford can now sell more units at lower prices. Ford also established the Ford brand name more by coming up with a system of dealers that franchised the Ford name. The Ford Motor Co. officially expanded internationally when it established Ford of Canada in 1904. Seven years later, in 1911, Ford opened several plants in Europe and in Australia. By 1920, Henry Ford's firm controlled 50% of the market share with its Model T cars. Henry Ford himself contributed to the rising fame of his brand name by joining other pacifists in 1915 when they tried to stop the First World War in Europe. Ford Motor Company encountered severe economic losses as a result of a reduction in market share, as well as the high costs incurred by labor contracts and the development of automobiles that met the new federal standards. In 1980, the company lost $1.54 billion, despite strong profits from the truck division and European operations. Ford lost a further $1.06 billion in 1981 and $658 million in 1982 while trying to affect a recovery; its market share fell from 3.6 percent in 1978 to 16.6 percent in 1981. Company officials studied Japanese methods of industrial management, and worked more closely with Toyo Kogyo, the Japanese manufacturer of Mazda automobiles (Ford gained a 25 percent share of Toyo Kogyo in November 1979, when a Ford subsidiary merged with the company). Ford imported Mazda cars and trucks, and in many ways treated Toyo Kogyo as a small car division until the Escort, its successor to the Pinto, reached the showrooms. This new compact was modeled after the Ford (Europe) Erika; another version of it, the Lynx, was produced by Ford's Lincoln-Mercury division. An economic recession crippled U.S. car manufacturers during the early 1990s, and Ford bore the brunt of the financial malaise that stretched around the globe. Domestically, car sales faltered abroad, particularly in Great Britain and Australia, Ford's sales plummeted. In 1991, Ford's worldwide automotive operations lost an enormous $3.2 billion after recording a $99 million profit the year before. In the United States, automotive losses reached an equally staggering $2.2 billion on the...
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