Alan Mulally's Challenges at Ford Motor Company
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Case Details:
Case Code : BSTR263 Case Length : 16 Pages Period : 2006 - 2007 Pub Date : 2007 Teaching Note :Not Available Organization : Ford Motor Company Industry : Auto and Ancillaries Countries : USA, World
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"The bureaucracy at Ford grew, and managers took refuge in
the structure when things got tough rather than innovate or try new ideas that
seemed risky."1
- Allan Gilmour, former chief financial officer at Ford
Motor Company, in 2007.
"He's (Alan R. Mulally) got turnaround experience and has
a reputation as a very good manager. I think anyone who takes the job at Ford
has a lot of wood to chop but he seems like he has a decent track record and
organization skills."2
- Jon Rogers, a senior auto analyst at Citigroup, in 2006.
"I have never seen a company with the lack of consistency
of purpose as Ford."3
- Alan R. Mulally, president and CEO, Ford Motor Company, in
2007.
An Icon in Distress
In June 2007, Ford Motor Company (Ford Motors), the world's third largest
automotive manufacturer, announced that it was working with Goldman Sachs4,
Morgan Stanley5, and HSBC6
to decide on the future of its upscale brands Jaguar and Land Rover.7
Though Ford Motors did not confirm the news that it would sell these brands, it
did not rule out the possibility either. Tom Hoyt, a company spokesperson, said,
"As we've consistently been saying since last year, Ford Motor Company has been
assessing a number of strategic options for all of our operations, as any
responsible company would do. Ford is actively investigating its options in
terms of other possible actions, and we're not ruling anything in or out."8
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Earlier, in March 2007, the company had sold its luxury brand
Aston Martin to a UK-based business group.
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When Ford Motors sold Aston Martin, many analysts
anticipated that it would also sell Jaguar and Land Rover as these
luxury brands contributed to a considerable chunk of the company's
losses.
After failing to re-brand and integrate these luxury brands with its
product portfolio, Ford Motors felt that acquisition was not the right
way of penetrating into the upscale segment. The decision to sell these
luxury brands was part of the restructuring exercise called the 'Way
Forward' plan initiated at Ford Motors in January 2006 (Refer to Exhibit
I for a note on Ford Motors' 'Way Forward' restructuring plan). |
Alan Mulally's Challenges at Ford Motor Company
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