Ford Motor Company

Ford Motor Company

ford Motor Company is an American multinational corporation and the world's third largest automaker based on worldwide vehicle sales.
In 2006, Ford was the second-ranked automaker in the US with a 17.5% market share, behind General Motors (24.6%) but ahead of Toyota (15.4%) and DaimlerChrysler (14.4%)[3]. Ford was also the seventh-ranked American-based company in the 2007 Fortune 500 list, based on global revenues of $160.1 billion [4]. In 2006, Ford produced about 6.6 million automobiles[5], and employed about 280,000 employees at about 100 plants and facilities worldwide[6]. In 2007, Ford had more quality awards from J.D Power than any other automaker.[7]
Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford and incorporated in June 16, 1903. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of the UK, and Volvo of Sweden. Ford also owns a one-third controlling interest in Mazda.
Ford has been one of the world's ten largest corporations by revenue and in 1999 ranked as one of the world's most profitable corporations, and the number two automaker worldwide.
Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce, especially elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's combination of highly efficient factories, highly paid workers, and low prices revolutionized manufacturing and came to be known around the world as Fordism by 1914.

History

Ford was launched in a converted factory in 1903 with $28,000 in cash from twelve investors, most notably John Francis Dodge and Horace Elgin Dodge who would later found the Dodge Brothers Motor Vehicle Company. During its early years, the company produced just a few Model T's a day at its factory on Mack Avenue in Detroit, Michigan. Groups of two or three men worked on each car from components made to order by other companies. Henry Ford was 40 years old when he founded the Ford Motor Company, which would go on to become one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. The largest family-controlled company in the world, the Ford Motor Company has been in continuous family control for over 100 years.

New directions for the twenty-first century

During the mid to late 1990s, Ford sold large numbers of vehicles, in a booming American economy with soaring stock market and low fuel prices. With the dawn of the new century, legacy healthcare costs, higher fuel prices, and a faltering economy led to falling market shares, declining sales, and sliding profit margins. Most of the corporate profits came from financing consumer automobile loans through Ford Motor Credit Company.[10]
By 2005, corporate bond rating agencies had downgraded the bonds of both Ford and GM to junk status [11], citing high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding market share, and dependence on declining SUV sales for revenues. Profit margins decreased on large vehicles due to increased "incentives" (in the form of rebates or low interest financing) to offset declining demand. [12]
In the face of falling truck and SUV sales, Ford moved to introduce a range of new vehicles, including "Crossover SUVs" built on unibody car platforms, rather than body-on-frame truck chasses. Ford also developed alternative fuel and high efficiency vehicles, such as the Escape Hybrid.[13]. Ford announced that it will team up with Southern California Edison (SCE) to examine the future of plug-in hybrids in terms of how home and vehicle energy systems will work with the electrical grid. Under the multi-million-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings," according to Ford. [14] [15]
In December 2006, the company raised its borrowing capacity to about $25 billion, placing substantially all corporate assets as collateral to secure the line of credit [16]. Chairman Bill Ford has stated that "bankruptcy is not an option" [17], but economists have stated that the company's impending contract renewal with the United Auto Workers in the summer of 2007 could be brutal[18]. The UAW has vowed to attempt to retain the jobs banks, a system which retains idled workers on the payroll, rather than laying them off, in order to maintain contracted US employment levels.
The automaker reported a net loss of $12.7 billion during 2006, and has estimated that it will not return to profitability until 2009.[19] However, Ford surprised Wall Street in posting a 750 million dollar profit in the second quarter of 2007, a change largely atttributed to the sale of Aston Martin and cost-cutting. Ford has expressed a continued interest in the selling of Land Rover and Jaguar. Now only until recently Ford has expressed that they will be divesting the entire PAG including Volvo Personvagnar AB before winter of 2007.[20]

"The Way Forward"

Main article: The Way Forward
In the latter half of 2005, Chairman Bill Ford asked newly-appointed Ford Americas Division President Mark Fields to develop a plan to return the company to profitability. Fields previewed the Plan, dubbed The Way Forward, at the December 7, 2005 board meeting of the company; and it was unveiled to the public on January 23, 2006. "The Way Forward" includes resizing the company to match current market realities, dropping some unprofitable and inefficient models, consolidating production lines, and shutting fourteen factories and cutting 30,000 jobs. [21].
These cutbacks are consistent with Ford's roughly 25% decline in U.S. automotive market share since the mid-late 1990s. Ford's target is to become profitable again in 2009, a year later than projected. Ford's realignment also includes the sale of its wholly owned subsidiary, Hertz Rent-a-Car to a private equity group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005. A joint venture with Mahindra and Mahindra Limited of India ended with the sale of Ford's 15 percent stake in 2005.
Chairman and Chief Executive Officer Ford also became President of the company in April 2006, with the retirement of Jim Padilla. Five months later, in September, he stepped down as President and CEO, and naming Alan Mulally as his successor. Bill Ford continues as Executive Chairman, along with an executive operating committee made up of Mulally, Mark Schulz, Lewis Booth, Don Leclair, and Mark Fields.

Brands and marques

Today, Ford Motor Company manufactures automobiles under several names including Lincoln and Mercury in the United States. In 1958, Ford introduced a new marque, the Edsel, but poor sales led to its discontinuation in 1960. Later, in 1985, the Merkur brand was introduced; it met a similar fate in 1989.
Ford has major manufacturing operations in Canada, Mexico, the United Kingdom, Germany, Brazil, Argentina, Australia, the People's Republic of China, and several other countries, including South Africa where, following divestment during apartheid, it once again has a wholly owned subsidiary. Ford also has a cooperative agreement with Russian automaker GAZ.
Since 1989, Ford has acquired Aston Martin (which it sold again on 2007-03-12[22], but it will retain a $77 million stake in the sports car maker[23]), Jaguar, Land Rover, from the United Kingdom and Volvo Cars from Sweden, as well as a controlling share (33.4%) of Mazda of Japan, with which it operates an American joint venture plant in Flat Rock, Michigan called Auto Alliance. It has spun off its parts division under the name Visteon. Its prestige brands, with the exception of Lincoln, are managed through its Premier Automotive Group.
Ford's FoMoCo parts division sells aftermarket parts under the Motorcraft brand name.
Ford's non-manufacturing operations include organizations such as automotive finance operation Ford Motor Credit Company. Ford also sponsors numerous events and sports facilities around the nation, most notably Ford Center in downtown Oklahoma City and Ford Field in downtown Detroit.
Overall the Ford Motor Company controls the following operational car marques: Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury, and Volvo; Jaguar, Land Rover, and Volvo are currently part of the Premier Automotive Group.

Global markets and Toyota hybrid technology license

Initially, Ford models sold outside the U.S. were essentially versions of those sold on the home market, but later on, models specific to Europe were developed and sold. Attempts to globalize the model line have often failed, with Europe's Ford Mondeo selling poorly in the United States, while U.S. models such as the Ford Taurus have fared poorly in Japan and Australia, even when produced in right hand drive. The small European model Ka, a hit in its home market, did not catch on in Japan, as it was not available as an automatic. The Mondeo was dropped by Ford Australia, because the segment of the market in which it competes had been in steady decline, with buyers preferring the larger local model, the Falcon. One recent exception is the European model of the Focus, which has sold strongly on both sides of the Atlantic.
From 2003, Toyota outsold Ford Motor worldwide. [24]. From the second quarter 2006, Toyota has passed Ford as the #2 automaker, by sales, in the United States[25].
The Ford Motor Company is in partnership talks to license hybrid technology from the Toyota Motor Corporation in a deal that could help establish Toyota's system as a standard for the industry. [26]

environmental record

In 2000, under the leadership of the current Ford chairman, William Clay (Bill) Ford, the Company stunned the industry (and pleased environmentalists) with an announcement [31] of a planned 25 percent improvement in the average mileage of its light truck fleet — including its popular SUVs — to be completed by the 2005 calendar year.
On the other hand, Ford ended the Think City experiment and ordered all the cars repossessed and destroyed, even as many of the people leasing them begged to be able to buy the cars from Ford. After outcry from the lessees and activists in the US and Norway, Ford returned the cars to Norway for sale.
In 2003, Ford announced that competitive market conditions and technological and cost challenges would prevent the company from achieving this goal. The US Environmental Protection Agency (EPA) released its 2005 fuel economy report ranking Ford cars, trucks and SUVs as having the lowest gas milleage of any automaker in America [32]
Ford discontinued a line of electric Ranger pickup trucks and ordered them destroyed, though it reversed in January 2005, after environmentalist protest. [33]
Ford did achieve significant progress toward improving fuel efficiency during 2005, with the successful introduction of the Hybrid-Electric Escape. The Escape's platform mate Mercury Mariner is also available with the hybrid-electric system in the 2006 model year—a full year ahead of schedule—due to high demand. The similar Mazda Tribute will also receive a hybrid-electric powertrain option, along with many other vehicles in the Ford vehicle line. In 2005, Ford announced its goal to make 250,000 hybrids a year by 2010, but by mid-2006 announced that it would not meet that goal. Other hybrids to come out will be the Ford Fusion and Mercury Milan Hybrid version in 2008. There are also plans for a Ford Edge and Lincoln MKX Hybrid. The Edge and MKX are Ford's new crossover SUVs to come out for the 2007 model year.
Ford also continues to study Fuel Cell-powered electric powertrains, and is currently demonstrating hydrogen-fueled internal combustion engine technologies, as well as developing the next-generation hybrid-electric systems. To the extent it is successful in increasing the percentage of hybrid vehicles and/or fuel cell vehicles, there will be a significant decrease not only of air pollution emissions but also reduced sound levels, with notable favorable impacts upon respiratory health and decrease of noise health effects.
While the company's product line increasingly reflects its commitment to ecologically sustainable practices, Ford's record as a manufacturer continues to reveal problematic ones. Researchers at the University of Massachusetts have listed it as the seventh-worst corporate producer of air pollution, primarily because of the manganese compounds, 1,2,4-trimethylbenzene, and glycol ethers released from its casting, truck, and assembly plants.[34] The United States Environmental Protection Agency has linked Ford to 54 Superfund toxic waste sites, 12 of which have been cleaned up and deleted from the list.[35]

Alternate fuel vehicles

Bill Ford was one of the first top industry executives to make regular use of an battery electric vehicle, a Ford Ranger EV, while the company contracted with the United States Postal Service to deliver electric postal vans based on the Ranger EV platform. The alternative fuel vehicles, such as some versions of the Crown Victoria especially in fleet and taxi service, operate on compressed natural gas - or CNG. Some CNG vehicles have dual fuel tanks - one for gasoline, the other for CNG - the same engine can operate on either fuel via a selector switch. Flexible fuel vehicles are designed to operate smoothly using a wide range of available fuel mixtures - from pure gasoline, to bioethanol-gasoline blends such as E85 (85% ethanol, 15% gasoline). Part of the challenge of successful marketing alternative and flexible fuel vehicles, is the general lack of establishment of sufficient fueling stations, which would be essential for these vehicles to be attractive to a wide range of consumers. Significant efforts to ramp up production and distribution of E85 fuels are underway and expanding.[36]
Current Ford Flexible Fuel Vehicles:[37]
Ford F-150
Ford Crown Victoria
Ford Focus / Focus C-MAX / Ford Focus FFV (Flexible-fuel vehicle).
Ford Taurus
Ford Ranger
Mercury Grand Marquis
Lincoln Town Car
Ford was third to the automotive market with a hybrid electric vehicle: the Ford Escape Hybrid, which also represented the first hybrid electric SUV] to market and started the Ford hybrid technology [38]. The Hybrid Escape will also be the first hybrid electric vehicle with a Flexible Fuel capability to run on E85.[39] The company had made plans to manufacture up to 250,000 hybrids a year by 2010, but has since had to back down on that commitment, due to excessively high costs and the lack of sufficient supplies of the hybrid-electric batteries and drivetrain system components. Instead, Ford has committed to accelerating development of next-generation hybrid-electric power plants in Britain, in collaboration with Volvo, Jaguar, and Land Rover. This engineering study is expected to yield more than 100 new hybrid-electric vehicle models and derivatives.
Ford is also planning to produce 250,000 E85-capable vehicles a year in the US, adding to some 1.6 million already sold in the last 10 years.[40]
Ford also has launched the production of hydrogen-powered shuttle buses, using hydrogen instead of gasoline in a standard internal combustion engine, for use at airports and convention centers.[41] At the 2006 Greater Los Angeles Auto Show, Ford showcased a hydrogen fuel cell version of its Explorer SUV. The Fuel cell Explorer has a combined output of 174 horsepower. It has a large hydrogen storage tank which is situated in the center of the car taking the original place of the conventional model’s automatic transmission. The centered position of the tank assists the vehicle reach a notable range of 350 miles, the farthest for a fuel cell vehicle so far. The fuel cell Explorer the first in a series of prototypes partly funded by the United States Department of Energy to expand efforts to determine the feasibility of hydrogen- powered vehicles. The fuel cell Explorer is one of several vehicles with green technology Ford being featured at the L.A. show, including the 2008 Ford Escape Hybrid, PZEV emissions compliant Fusion and Focus models and a 2008 Ford F-Series Super Duty outfitted with Ford's clean diesel technology.
Ford announced on 2007-07-09 that it will team up with Southern California Edison (SCE) to examine the future of plug-in hybrids in terms of how home and vehicle energy systems will work with the electrical grid. Under the multi-million-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings," according to Ford. [42] [43]
Current and planned Ford hybrid electric vehicles:
2004– Ford Escape Hybrid
2006– Mercury Mariner
2008– Ford Fusion/Mercury Milan
2009– Ford Edge/Lincoln MKX