Analysis of Ford Motors Company - Research Paper Example

? Analysis of Ford Motors Company History The first attempt that Henry Ford made at starting his own motor company was in 1901,but began the Cadillac Motor Company in the year 1902. He launched the company in a factory converted in 1903 with capital of about $28,000 that had been obtained from around twelve investors (Geyer, 2011). The most prominent investors involved in establishing the Ford Company were Horace and John Dodge who later on founded their own vehicle company under the name of the Dodge Company (Ford, 2007). In the early years after the company’s establishment, they produced only a few cars in Detroit with groups of workers working on the assembly of individual vehicles from parts manufactured by other suppliers (Geyer, 2011). After a period of about ten years, the company began its assembly line notion of producing cars which led to the rapid expansion of the company (Cook, 2010). When Henry approached the age of 40, he created the Ford Company and its control has since remained within his family for the past century (Ford, 2007). The company has witnessed several developments since its establishment by introducing the first cars with engines having removable cylinder heads in the year 1908 and safety glasses in their windshields in the year 1930 (Banham, 2002). In the year 1932, the Ford Company then introduced vehicles that were powered using V8 engines that were low priced (Cook, 2010). From the year 1952, the Company started offering packages for life safety that included items like steering wheels that had deep-dishes, rear seatbelts and padded dashes for the first time in vehicles. The Company then started producing its Mustang brand in the year 1964 and the reminder light on seat belts in the following year (Geyer, 2011). In the mid 1990’s, the Company sold very many vehicles since the country’s economy was performing well. They have recently indulged in the financing of loans to customers who are willing to purchase their vehicles. This move has enabled the company to enjoy high corporate profits and success in recent years (Cook, 2010). Background The Ford Motor Company, an American company, is involved in the manufacture of automobiles and is headquartered in the state of Michigan at Detroit. The company was established by Henry Ford and was later on incorporated in the year 1903 on June 16th (Geyer, 2011). The company has purchased stakes in the Mazda Company located in Japan along with the Aston Martin Company that is located in the United Kingdom. The company additionally controls the Ford and Lincoln brands. However, the company is mainly controlled by members of the Ford family which owns the majority of the shares at the company (Ford, 2007). Through the usage of elaborate engineering manufacturing sequences referred to as assembly lines, the company was able to initiate the large scale manufacture of vehicles along with the management of their large workforce (Geyer, 2011). The company has risen over the years to become the second largest producer of automobiles in America and the fifth largest in the world. The Ford Company has opened manufacturing plants in many parts around the globe including China, Mexico, Turkey, Germany, Australia, Brazil, South Africa, Argentina along with Canada and the United Kingdom. The company employs over 165,000 workers and over seventy manufacturing plants around the globe. It additionally own subsidiary companies in countries such as China, Brazil and Mexico (Cook, 2010). Future Plans The Company’s mission statement states that Ford will work as one team, under one plan and with one goal of achieving profitability while remaining relevant to the market (Banham, 2002). It stipulates that the Company’s staff will work together as one team in order to achieve global leadership in their industry which will measured through their customer, suppliers, employees, unions, investor along with the society’s satisfaction. Their unified plan implies that they will aggressively restructure their operations for the purpose of ensuring they operate profitably as per the changing demand in the market for their products (Geyer, 2011). The Company also aims at accelerating the creation of new products according to their customer’s values along with states. This is mainly to be achieved through their availing of finances for their plans to improve the condition of their Company’s balance sheet. The company’s ultimate goal is delivering profitability to all parties involved in their operations (Cook, 2010). In accordance with the above missions, the Company has initiated plans of introducing fifteen new vehicle makes in their manufacturing plants located in China by the year 2015. This will be done in an effort to increase their market share in the country with the biggest automobile market in the globe (Geyer, 2011). The company also intends to introduce newer technologies in energy that are fuel free, innovations in plug-in along with hybrid engines in areas like Asia where they have not been previously used (Banham, 2002). In their efforts of conserving the environment, the company aims to start producing smart products that will facilitate their efforts. This includes the introduction of motor vehicles that are electric powered for the purpose of increasing their efficiency of in reducing energy consumption for future purposes. The company aims to carry out these efforts in all countries that it has operations in (Geyer, 2011). Financial statements During the year 2010, the Ford Company recorded a net profit of over $6.6 billion while its debts reduced from over $33million to $14million. The profits were realized after the company had experienced losses for a whole decade since the beginning of the century. Its interest payments were in turn lowered by over a billion dollars because its net profit of $2.7 billion in the year 2009 had tremendously risen (Geyer, 2011). The company’s income statement indicates that in the year 2012 they collected $34 billion which was a slight drop in their earnings as per the previous year which totaled to $35.5 billion. The Ford Motor Company had an operating income of $1.7 billion, which was still a drop from the previous year’s $2.2 billion. Their net income is given as $1.36 billion for the year 2012 when compared to the previous year which was $2.3 billion (Cook, 2010). The loss in revenue and operating incomes resulted from the stiff competition that the company encountered from other automobile manufacturers in the industry like the Toyota and Nissan companies (Banham, 2002). In addition, the demand for their SUV’s has recently declined thereby leading to a decrease in their profits. The company produced over 2 million vehicles on an annual basis and sells approximately the same number annually to its customers (Geyer, 2011). However, since the year 2010, the company increased its production by availing over 5.3 million vehicles which indicated a 19.7% increase in their production levels (Cook, 2010). According to financial magazines like Forbes, the Ford Motor Company is ranked as the eighth American company among the top five hundred richest companies in the globe. References Banham, R. (2002). The Ford Century: Ford Motor Company and the Innovations That Shaped the World. New York: Artisan. Cook, K. (2010). Zacks Industry Outlook Highlights: General Motors, Ford Motor, Toyota Motors, Honda Motor and Nissan Motor. Retrieved On June 12, 2012 from: http://www.zacks.com/ Ford, H. (2007). My Life and Work-An Autobiography Of Henry Ford. Detroit: NuVision Publications. Geyer, G. (2011). Ford Motor Company: The Greatest Corporate In U.S History. Washington: Createspace. Read More