Ford - The 'Way Forward' Restructuring Program
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Case Details:
Case Code : BSTR204
Case Length : 15 Pages
Pages Period : 1996-2006
Organization : Ford
Pub Date : 2006
Teaching Note :Not Available
Countries : US
Industry : Automobile
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Please note:
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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Introduction Contd...
According to Efraim Levy, analyst at Standard & Poor's Equity Research,6 "We think (Ford) plans to be more aggressive with design and technology in its vehicles, to be faster in the refreshing of its vehicle lineup and to make added cost cuts that will help improve financial performance over the rest of the decade. However, we do not believe the restructuring will meet all of Ford's objectives and we think that not all benefits will accrue to the bottom line."7
Background Note
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Founded by Henry Ford (Henry), Ford was incorporated in June 1903. The company rolled out its first car named Model A from a rented plant in 1903. In 1904, Ford built its own plant in Detroit called Piquette Avenue plant (Piquette). By 1906, Ford became the top automobile manufacturer in the US and Henry became the majority shareholder and also the company's President. In 1908, Ford introduced its famous 'Model T'. In 1910, Ford opened its Highland Park plant in Michigan and assembly of the Model T was shifted there from Piquette. The plant revolutionized car manufacturing by using innovative production methods which reduced the time required to produce a complete chassis from 728 minutes to just 93 minutes.
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In 1911, Ford made its first moves outside North America with a factory in Manchester, UK. Ford acquired the Lincoln Motor company in 1925 and thus entered the luxury car segment. The affordable Model T was a huge success and by 1927, Ford had sold 15 million Model Ts in the US.
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In 1938, Ford launched the Mercury brand as a mid-priced car. During World War II (1939-1945), Ford built a general purpose vehicle called the Jeep for the military. In 1954, Ford introduced the very popular two-seater personal luxury car called 'Thunderbird.' In February 1956, Ford went public and about 350,000 people became its shareholders. In 1967, Ford established 'Ford of Europe' with the aim of expanding its operations in European countries. In 1970, the company entered the Asia Pacific region. In 1971, it consolidated its operations in Canada, US and Mexico into its North American Automotive Operations. In the 1970s, many foreign automobile manufacturers, especially from Japan entered the US and started selling small cars which were imported from Japan... |
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