The Turnaround At Ford Company - 1568 Words

The Turnaround At Ford The Ford company had always been a major player in the growth of the US economy, being one of the Big Three (along with GM and Chrysler) in the US automobile industry. Ford has been credited for having made the automobile attainable to the middle-class that emerged through the 20th to the 21st centuries, due in part to its refinement of the assembly line concept. It was the first manufacturing company to make use of the moving assembly line, which created so much efficiency that made owning a car highly affordable to the common American. So for decades, Ford and the automotive industry had been one of the leading big employers in the US, contributing to its booming economy. For years, US carmakers like Ford†¦show more content†¦To compound matters, the accompanying financial crisis of the 2008 recession spurred the industry to slash costs and boost efficiency. The Big Three scrambled with their own restructuring efforts that included factory closures, divesting of nonperforming models and brands, and most of all – decreasing labor costs. (Davis, 2012) The Big Three, of course including Ford, now were faced with a huge labor machinery that it was not able to sustain – especially with a labor force that is ageing, has relatively higher wages vis a vis foreign carmakers’ workers, as well as very competitive retirement benefits packages. Another important factor that contributed to the labor surplus in Ford, as in the US auto industry, is the fact that before, the unions kept a lot of auto workers happy and contented in their work environment for decades. Some Ford analysts blame those legacy costs (e.g. retiree health care and pensions) for adding to Ford’s troubles. When the economy was booming, the unions coddled the workers, while the Big Three reveled in their seemingly immovable positions. Nobody read the signs of the times and so were caught unawares that economic conditions were changing, or when they did, believed that the automakers could handle it, as much as they handled the 1973 oil embargo. (Davis, 2012) Ford, like the big US carmakers, did not foresee that the increased globalization and the elimination of international trade protection laws brought in moreShow MoreRelatedThe Turnaround Ford Motor Company1684 Words   |  7 PagesFord Motor Company was launched in a converted factory in 1903 with $28,000 in cash from twelve investors. It would go on to become one of the worlds largest and most profitable companies. It is one of the largest family-controlled companies in the world and has been in continuous family control for over 100 years. Ford Motor Company is an American multinational corporation and the worlds third largest automaker based on worldwide vehicle sales. Its overseas business encompasses only one trulyRead MoreAlan Mulally’s Restructur ing of Ford Motor Company623 Words   |  3 PagesMulally’s Restructuring of Ford Motor Company Alan Mulally’s Restructuring of Ford Motor Company Case Study Alan Mulally received an opportunity to turn around one of the most famous brand names in the United States. Ford was struggling; losing more than 12.7 million in 2006 (Nelson p558) and desperately needed a change. Alan Mulally took the challenge, and stated he would do what many thought was impossible at the time – make Ford profitable. He did just that. Mulally knew Ford had issues and theRead MoreHow The Turnaround Team May Have Used Gerard And Teurfs Transformation Skills770 Words   |  4 PagesDescribe how the turnaround team may have used Gerard and Teurfs’ transformation skills to overcome the frustration of employees? The turnaround team should consider creating a community through dialog with emphasis on listening. 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After the news, shareholders appeared pleased and Wall Street delivered a small boost to the bedraggled automaker. The question is whether this is truly the beginning of a turnaround for Ford’s shares, or will the company’s perennial pain continue for the duration? Ford stock has always been volatile and is oftentimes difficult to pin down. This paper will focusRead MoreSwot Analysis Of Ford Motor Company1325 Words   |  6 Pagesautomotive industry is capital-intensive and Ford is no exception. When it needs extra cash and liquidity Ford taps the debt-markets. Automobile companies also need funding for their credit subsidiaries in order to offer financing to car buyers and leasers. Investors purchase bonds of a company and are referred to as debt-holders of the company. 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