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MindTouch Developer Center > Sandbox > Ford Motor Company

Ford Motor Company
Type Public ( NYSE : F )
Founded June 17 , 1903
Founder Henry Ford
Headquarters Flag of the United States Dearborn , Michigan , USA
Area served worldwide
Key people William Clay Ford, Jr - Executive Chairman
Alan Mulally - President , CEO
Industry Automotive
Products Automotive goods and services
Revenue US$ 160.1 billion (2006) [1]
Operating income US$-12.0 billion (2006) [1]
Net income US$-12.6 billion (2006) [2]
Employees 283,000 (2006) [3]
Divisions Ford Credit
Ford division
Lincoln
Mercury
Premier Automotive Group
Subsidiaries Automotive Components Holdings
Jaguar
Land Rover
Volvo (cars only)
Slogan Flag of the United States Have you driven a Ford lately?
Flag of the United States Built Ford Tough
Flag of Canada Built for Life in Canada
Flag of Europe Feel the difference
Make Everyday Exciting
Website www.ford.com

Ford Motor Company is an American multinational corporation and the world's third largest automaker based on worldwide vehicle sales .

For 2007, Ford is the third-ranked automaker in US sales after General Motors and Toyota . This is the first time in the past 56 years Ford was not second-ranked autmaker in US sales. 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 283,000 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 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.

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History

Henry Ford (ca. 1919)

Henry Ford (ca. 1919)
1896 Ford Quadricycle

1896 Ford Quadricycle
Main article: History of Ford Motor Company

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 cars 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.

 

Corporate governance

Members of the board as of early 2007 are: Chief Sir John Bond , Richard Manoogian , Stephen Butler , Ellen Marram , Kimberly Casiano , Alan Mulally (President and CEO), Edsel Ford II , Homer Neal , William Clay Ford, Jr. , Jorma Ollila , Irvine Hockaday, Jr. , John L. Thornton and William Clay Ford (Director Emeritus). [8]

The main corporate officers are: Lewis Booth (Executive Vice President, Chairman ( PAG ) and Ford of Europe), Mark Fields (Executive Vice President, President [The Americas]), Donat Leclair (Executive Vice President and CFO ), Mark A. Schulz (Executive Vice President, President [International Operations]) and Michael E. Bannister (Group Vice President; Chairman & CEO Ford Motor Credit ). [9] . Paul Mascarenas (Vice President of Engineering, The Americas Product Development)

 

Recent company developments

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 the largest annual loss in company history in 2006 [19] , $12.7 billion, and has estimated that it will not return to profitability until 2009. [20] 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. [21]

The first Ford plant in Detroit, Michigan and three early Ford models "F" (L to R): 1906, 1903, 1902
The first Ford plant in Detroit , Michigan and three early Ford models "F" (L to R): 1906, 1903, 1902

 

"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. [22] .

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 , Turkey , 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 March 12 , 2007 [23] , but it will retain a $77 million stake in the sports car maker [24] ), 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

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. [25] . From the second quarter 2006, Toyota has passed Ford as the #2 automaker, by sales, in the United States [26] .

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. [27]

 

Europe

 

History

At first, Ford in Germany and the United Kingdom built different models from one another until the late 1960s, with the Ford Escort and then the Ford Capri being common to both companies. Later on, the Ford Taunus and Ford Cortina became identical, produced in left hand drive and right hand drive respectively. Rationalization of model ranges meant that production of many models in the UK switched to elsewhere in Europe, including Belgium and Spain as well as Germany. The Ford Sierra replaced the Taunus and Cortina in 1982, drawing criticism for its radical aerodynamic styling, which was soon given nicknames such as "Jellymould" and "The Salesman's Spaceship."

Increasingly, Ford Motor Company has looked to Ford of Europe for its "world cars," such as the Mondeo, Focus, and Fiesta , although sales of European-sourced Fords in the U.S. have been disappointing. In Asia , models from Europe are not as competitively priced as Japanese-built rivals, nor are they perceived as reliable. The Focus has been one exception to this, which has become America's best selling compact car since its launch in 2000.[ citation needed ]

In February 2002, Ford ended car production in the UK. It was the first time in 90 years that Ford cars had not been made in Britain, although production of the Transit van continues at the company's Southampton facility, engines at Bridgend and Dagenham , and transmissions at Halewood . Development of European Ford is broadly split between Dunton in Essex (powertrain, Fiesta/Ka, and commercial vehicles) and Cologne (body, chassis, electrical, Focus, Mondeo) in Germany. Ford also produced the Thames range of commercial vehicles, although the use of this brand name was discontinued circa 1965. It owns the Jaguar and/or Land Rover car plants in Britain; Ford's former Halewood Assembly Plant was converted for production of the Jaguar X-Type and currently also assembles Land-Rover's Freelander 2. Jaguars are also assembled at Castle Bromwich, Birmingham while the rest of the Land-Rover range is assembled at Solihull, near Birmingham.

Elsewhere in continental Europe, Ford assembles the Mondeo range in Genk ( Belgium ), Fiesta in Valencia ( Spain ) and Cologne ( Germany ), Ka in Valencia, and Focus in Valencia, Saarlouis (Germany) and Vsevolozhsk ( Russia ). Transit production is in Kocaeli ( Turkey ), Southampton (UK), and Transit Connect in Kocaeli .

Ford also owns a joint-venture production plant in Turkey . Ford-Otosan, established in the 1970s, manufactures the Transit Connect compact panel van as well as the "Jumbo" and long wheelbase versions of the full-size Transit. This new production facility was set up near Kocaeli in 2002, and its opening marked the end of Transit assembly in Genk.

Another joint venture plant near Setubal in Portugal , set up in collaboration with Volkswagen , formerly assembled the Galaxy people-carrier as well as its sister ships, the VW Sharan and Seat Alhambra . With the introduction of the third generation of the Galaxy, Ford has moved the production of the people-carrier to the Genk plant, with Volkswagen taking over sole ownership of the Setubal facility.

Ford Europe has broken new ground with a number of relatively futuristic car launches over the last 50 years.

Its 1959 Anglia two-door saloon was one of the most quirky-looking small family cars in Europe at the time of its launch, but buyers soon became accustomed to its looks and it was hugely popular with British buyers in particular. It was still selling well when replaced by the more practical Escort in 1967.

The third incarnation of the Ford Escort was launched in 1980 and marked the company's move from rear-wheel drive saloons to front-wheel drive hatchbacks in the small family car sector. It also offered levels of style, comfort and refinement which were almost unmatched on comparable cars of this era. It was a huge success all over Europe and it was Britain's most popular car for most of its 10-year production life.

The fourth generation Escort was produced from 1990 until 2000, although its successor - the Focus - had been on sale since 1998. On its launch, the Focus was arguably the most dramatic-looking and fine-handling small family cars on sale, and sold in huge volumes right up to the launch of the next generation Focus at the end of 2004.

The 1982 Ford Sierra - replacement for the long-running and massively popular Cortina and Taunus models - was a style-setter at the time of its launch. Its ultramodern aerodynamic design was a world away from a boxy, sharp-edged Cortina, and it was massively popular just about everywhere it was sold. A series of updates kept it looking relatively fresh until it was replaced by the front-wheel drive Mondeo at the start of 1993.

The first two incarnations of the Mondeo were well-built, refined and reliable family cars that attracted strong sales, but the third incarnation (launched in 2007) took the large family car market to new heights in terms of build quality, refinement, comfort, equipment, driver appeal and value for money.

The rise in popularity of small cars during the 1970s saw Ford enter the mini-car market in 1976 with its Fiesta hatchback. Most of its production was concentrated at Valencia in Spain , and the Fiesta sold in huge figures from the very start. An update in 1983 and the launch of an all-new model in 1989 strengthened its position in the small car market. The second generation Fiesta was significantly updated twice before an all-new model was launched in 2002, and over the years it has become more refined, spacious, better-built and more enjoyable to drive.

 

Asia Pacific

Ford dealership in Ho Chi Minh City, Vietnam (August 2005)
Ford dealership in Ho Chi Minh City , Vietnam (August 2005)

In New Zealand and Australia , the popular Ford Falcon was long considered the average family car and is considerably larger than the Mondeo, Ford's largest car sold in Europe. Between 1960 and 1972, the Falcon was based on a U.S. Ford of that name, but since then has been entirely designed and manufactured locally. Like its General Motors rival, the Holden Commodore , the 4.0 L Falcon ret