With all of this turmoil, how did Ford succeed? For many years the three major American car companies have endured financial losses. In 2009 Chrysler filed chapter 11 bankruptcy and also acquired US$6.6 billion in government bailout funds. Chrysler’s sales from January 2009, through October 2009, have declined by 39%. General Motors filed Chapter 11 bankruptcy in 2009, and now the United States Treasury and Canadian government own majority stock for General Motors. This was an investment of US$57.6 billion from the United States Government. The last of the “Big three” auto companies is Ford Motor Company. Ford, at first, attempted to work with United States lawmakers, in collaboration of General Motors and Chrysler, to secure financial aid. This attempt failed and Ford decided not to accept bailout funds and work affective robust plans to reduce their debt. Because of this financial strategy Ford has been able to post almost US$1 billion profit this last quarter.
For Ford to recover financially it was critical that Ford did not accept bailout funds. This allowed Ford to continue to spend monies where the others had to cut back and hold cash while waiting for bailout funds. But what Ford’s major accomplishment was to take advantage of the negative impression of the other auto makers.
Ford launched many collaborative initiatives. The first was Ford Motor Company’s board worked with bondholders to reduce their debt. Foremost, Ford began in collaborating with multiple companies that would enhance their product. One of such companies was Best Buy. An unlikely company to collaborate with but Ford worked with 30 Best Buy locations to pilot a program to enhance safety and in-car connectivity systems called SYNC. SYNC gives the owner abilities to get turn-by-turn directions, 911 assistance, vehicle health reports, news, sports, weather updates, real time traffic reports and business searches.
Ford has overcome many obstacles to move forward as a profitable company once again. In my opinion Ford has set forth an abundance of collaborative efforts that has economically profited Ford but has also made them listen to the end user.
Reference:
Chrysler. (n.d). In Wikipedia. Retrieved December 2, 2009, from http://en.wikipedia.org/wiki/Chrysler
General Motors. (n.d). In Wikipedia. Retrieved December 2, 2009, from http://en.wikipedia.org/wiki/General_Motors
Ford Motor Company. (n.d). Retrieved December 2, 2009, from http://en.wikipedia.org/wiki/Ford_Motor_Company
Vlasic, B (2009, October 10). For Car Buyers, the Brand Romance Is Gone. Retrieved December 2, 2009 from The New York Times website: http://www.nytimes.com/2009/10/21/business/21auto.html?_r=2&scp=10&sq=&st=nyt
Ford, Best Buy Matchup Drives Increased Consideration for Ford Products, (n.d.) Retrieved December 2, 2009, from Ford Motor Company official website: http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-best-buy-matchup-drives-31503
About SYNC, (n.d). Retrieved December 2, 2009, from Ford Motor Company official website: http://www.fordvehicles.com/innovation/sync/about/
3 comments:
I must say I am glad to see Ford trying to do the right thing and not take bailouts and give it to all their CEOs like some other companies do....Chrysler cough cough.
-rdavis1185
Ford made the right decisions when they had to unlike GM & Chrysler. Both of them waited way to long to see the hand writing on the wall which is why they had to take bail out money. Ford has the right product at the right time.
This just shows that Ford does not just cater to what the buyers want, but also what they need. They want to show the public that they do care, and that's what the Ford name is all about.
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