A strong US Dollar should be a priority for US monetary and fiscal authorities. If the US dollar continues to lose ground against other major currencies, investing in US assets become less desirable to foreign investors. Because of the inverse relationship between bond prices and interest rates, as the deficit grows, the availability of US treasury securities increases, bond prices decline and interest rates rise leading to inflation. And as we all know, inflation reduces the value of real assets.
To think that the US dollar volatility can be ignored because foreign investors have too much to lose to allow the collapse of the dollar seems shortsighted. Foreign investors such as China are stocking commodity inventories and could, over time, significantly reduce their exposure to the US dollar. Such actions would indicate lack of confidence in the US dollar.
On a different note, Ford Motors Co. reported earnings on Monday along with some promising forecasts. As you read the press release, think about the actions Ford Motor Company has taken over the last year. What are the key factors that differentiate Ford’s turnaround strategy from GM’s?
Tags: Ford Motor Co., US Dollar
Ford’s turn around strategy greatly differs from that of GM. Ford is trying to get rid of the branches that are doing poorly in sales, while GM was offering early retirement for its employees. GM is closing down manufacturing locations and introducing non-fuel efficient cars like the hummer, no one is going to buy that in a recession. Ford is making there old models, like the ford taurus updated and a bit more pricey, but people seem to keep buying them. Ford’s turn around plan seems to be more efficient and working out alot better than GM’s plan.
Ford has greatly differentiated itself from GM, and the third quarter profit they posted on Monday only helps their case. According to the article posted in the WSJ on November second Ford posted a $997 million profit. Although “the company won’t know until next year the full impact of how sales will fare without the ‘cash for clunkers’ incentives that several governments offered this year” they still forecast that they will be solidly profitable in 2011 for the entire year. Ford is offering more cars that are grabbing the attention of consumers, like the new Ford Taurus, and are also offering new technology based features that come in the more price models, along with higher price tags. Ford also stated that the improvements throughout the company came from “job cuts, lowers costs for materials, and consumers buying more high-end models equipped with technological features”, while GM still tried to hand out bonuses to top executives while going bankrupt, this is why Ford had such a huge profit and GM has to close many of its chains, like Saturn.
Ford has had a more successful turnaround compared to GM because they went back to the basics and restructured accordingly. Ford kept things simple by adding technology and comfort features to existing cars in the product line. GM continued with an aggressive approach by making new style and alternative energy cars which we are risky moves compared to ford. Ford also sourced lower cost materials and cut jobs which in turn expanded the overall profit margin. Ford took the internal steps to restructure the company and position themselves to be profitable even throughout a recession. Overall getting back to the basics and keeping things simple by improving popular existing model cars has been the main factor in Ford having a successful turnaround strategy.
The Ford Motor Company has made the statement that they have made a profit in the past quarter this year. Ford Motor Co. also anticipates that they will make a bigger profit this year in sales that come out in 2011. The difference between the Ford Motor Co. and GM is that Ford tried to fix their losses and wanted to make a profit on their own. GM asked for money and then did not use it the way they should have and then asked for more when if was gone. I believe that even though it was not a large profit margin as in the past that Ford is doing the right thing in trying to keep the profits internal, rather than looking to the government to save them. In any case, a company should have to do what they need to do on their own to be profitable not look to someone else to save them. I believe Ford is a better company and would by from them over GM.
This is why people should not give beggars money because they will continue to beg. GM now needs more money after the billions of dollars they received after there stimulus package. On the other hand Ford Motor Co. refused any money and hit the ground running. Ford is making a comeback and expected big profits in 2011. Even with the price of the dollar diminishing ford is trying to set an example that america is not defeated. hopefully other companies will follow Ford Motor Co. and make america strong again. Companies wondering how much money they need to survive are companies that will not make it in this economy.
Ford Motor Company earned $1 billion in the third quarter. The Mich-based automaker reported a net income of $997 million, or 29 cents per share. Ford says it now expects to be “solidly profitable” in 2011. Previously the automaker said it would be break-even or better. Basically fueled by U.S. market share gains, cost cuts and the government’s Cash for Clunkers rebates. According to Bill Vlasic of NYT; Ford also has benefited from consumer goodwill after it declined government bailout money and didn’t go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn’t accomplished since 1995. Finally, when Ford chose not to ask for government loans, the company was freed to continue spending on new products like its Fusion and Taurus sedans. G.M. and Chrysler, by comparison, had to rein in much of their product development programs to conserve cash while they awaited federal aid.
Some key factors that differentiate Ford’s turnaround strategy involves the European market. Due to this economical crisis, the demand for for top quality European and exotic cars had drastically decreased. Those interested in a new automobile were forced to settle for the domestic, American vehicle. In addition to job cuts and lower costs for materials, buyers were driven (no pun intended) to purchase a higher-end American car than a low-end, overpriced, foreign car. Ironically, Ford had hit an all-time low and ended up back on top in the industry–unlike GM’s “bankruptcy technique” and high dividends that were paid to the share holders. GM has been forced to discontinue certain models and subsidiaries, only further hurting them financially. GM should take a page out of Ford’s book.
The key factors that differentiate Ford’s turn around strategy is to reject the “cash for clunkers” to see if the company’s profits will continue to rise and if cash flow will continue to stay positive for the remaining quarter; Ford improved the pretax operating profit by cutting jobs, lowering cost for materials and consumers buying more high and models equipped with technical features(pg.2); And finally, they don’t convince the government to try to offer Ford a loan to help solve their financial matters.
Over the past year, Ford has implemented strategies that have resulted a turnaround for the automakers, finally reporting the first operating profit since 2005. This puts them in a far better position than General Motors, which is still trying to find its bearings after emerging from bankruptcy. Several differences regarding their strategies for recovery can explain why Ford has been able to get back on their feet, while GM is still struggling. Ford took action in 2005 when the CEO created a plan consisting of shutting down factories, cutting a portion of the work force and speeding up the development of cars and trucks. In 2006, the idea to mortgage assets was added to the plan, giving the company the cash to fall back on when the economy weakened. Ford also relied on controlled production and a string of new products, allowing them to command higher prices. The company used a multi-hit strategy, in which they made strong vehicles across the board, rather than just one or two. Practical cars, such as the Fusion midsize sedan and gas-efficient Focus compact have gained Ford popular and critical acclaim. General Motors went about fixing their problems in a very different way. In addition to making thousands of job cuts, GM looked to the government for help. The government assisted the company in their recovery process by lending them billions of dollars in financing, in which they plan to be able to pay off by 2014. However, the assumption that GM will be profitable enough to follow through with their payback plan is a long-shot. In doing this, GM lost many loyal customers throughout the industry, many of whom Ford gained. If General Motors attempted to fix their financial problems on their own, like Ford, they would not been in the deep hole that they dug for themselves.
At the moment, Ford is enjoying their near billion dollar profit compared to last year, and being what seems like the front runner in establishing a stabilized reputation for their company in this sloppy economy. Ford’s market share after seven months is growing, to 16.1%, up from 15.6% a year ago, while GM is still shrinking, 19.6%, down from 21.3% (Forbes.com). However, Ford has attained approximately $31 billion of debt, while GM bankruptcy will be “equitized”, where the government will be accepting common stock rather than cash. After GM and Chrysler eventually climb out from of their debt, Ford will still have a major amount of lingering debts to pay off. Currently, Ford leads showroom consumer amounts, sales are only down 24% from last year. Ford is also reconstructing their debt, eliminating almost $10 billion, and decreasing its annual interest by $500 million. Ford has also used $1.1 billion in cash to buy $3.4 billion in principal on the company’s unsecured notes. The company also bought $2.2 billion of its long-term debt with $1 billion in cash (bizjournals.com). In all, Ford is reducing costs, job cuts, and becoming more “tech-savvy” in the interest of the consumer; for the time being it appears Ford is on top, and has potential to regain stability.
Ford is in much better shape than GM. The the key factor in Ford turnaround is that they didn’t ask the government to bail them out. “Ford Motor Co. reported a third-quarter profit Monday on cost cutting and a turnaround in its North American business and said it would be “solidly profitable” in 2011(Bennett).” “The key North America automotive unit posted a pretax profit of $357 million(Bennett).” “The North American unit, which accounts for 42% of Ford’s overall vehicle sales, reported pretax operating profit of $357 million compared with a loss of $2.6 billion a year earlier. The improvement came from job cuts, lower costs for materials and consumers buying more high-end models equipped with technological features(Bennett).” Yes, I think that Ford will continue to make a profit.
Ford has taken impressive actions in the past year to make a full turnaround. Fords plan and strategy for a turnaround was favorable net pricing, lower material costs and producing vehicles that customers want to buy. By making these changes ford has reduced cost by 4.6 billion. Ford’s strategy was a huge success. They have made one billion dollars in the 3rd quarter and have 23.8 billion dollars in cash and have also increased revenue by 26 percent. Instead of following in fords steps GM is marketing a 60 day money back guarantee and large discounts to reach buyers. GM is also looking for hire a new president in hopes that will put them back on track. If GM wants to be successful in this economy they need to follow in fords footsteps.
well from what i got from the article, Ford is doing awesome compared to last year. There profit is improving but they are still in debt allot of money. Its a good thing Ford turned down the bail out plan becuase if they accepted it they probly would have been in the hole triple or quadruple of what they already are. These are some pretty big numbers i beleave i read some where the are 30 billion in debt so imagine 3 to 4 time that, thats debt thats never going to go away. I think ford did the right thing by not accepting the bailout it probly would have made it worse for them in the long run.
Ford motors has been definetly come up during the reccession in early 2009. In the New York Times article which posted today (November 5th, 2009) “Ford emerged as the sole American automaker in a position to survive the steepest sales downturn in decades without a government bailout.” The article continues on to state that “Ford posted a surprise third-quarter profit of $997 million and said it had its first profitable quarter in North America in more than four years.”. Although Ford Motors are currently in a stand off with the employees that are members of Union to try to cut more labor costs. Ford;s Projections gives insight of potential recovery growth for the next up coming quarter.
Ford Motors Co. has recently made profits and offered some promising forecasts for the future- even in the midst of the recession. It’s because of the actions they have taken over the past year such as higher pricing, lower material costs, and higher market share. Consumers suggest that the higher market share has occured because Ford cars have recently been scoring 90% on quality ranking tests. These scores have surpassed that of GM and has contributed to their turnaround- which GM has failed to do. Also, dealers believe that because companies such as GM and Chrysler had taken billion dollar loans from the government bailout, it made them look much less stable and likely to succeed. Ford, on the other hand, did not take those loans, which gave consumers the impression that they were a powerful and stable car company.Besides all of these reasons, the “cash for clunkers” deal was also a big contributing factor in Ford’s success in the past year.
While originally bleak, Ford’s future is beginning to look bright. While, according to Forbes.com, Ford plans to upgrade their current line of vehicles and make improvements to make their products more attractive, GM’s strategy isn’t so trustworthy. GM, according to CNN.com, plans to sell it’s entire lot of vehicles which are currently lying around dealership lots. GM’s main focus is not around improving their products, even though the company’s products have had quite a poor reception. While many foreign cars have established a solid reputation for reliability, American cars have typically had characteristic flaws, usually according to which company was behind the manufacturing. Ford hopes to improve those problems which have dragged their sales down, while GM plans on running into the industry without any clear goal other than increasing sales.
Ford has done a lot of things that GM seemed to avoid. GM cut some jobs but I don’t think that they made enough to make a difference. They cut more from units that were costing them more money than they were making. They also didn’t do things that GM did and shouldn’t have done. GM continued to ask for bailouts and giving out early retirement. They weren’t being careful with the money that they were making. Ford come out with newer models that had many significant changes to the former models. The Escort for instance looks more like a sportscar than the “mom-mobile” look its predecessors had. Most of the cars look the same with the exception of Cadillac and Chevy being modified. Ford has a whole new look and I think it is amazin ghow well they have turned things around. On the other hand they mentioned in the article something about being unsure if they could do it with out cash for clunkers. This is an excellent point Ford did very well with that program but can they keep the momentum that have right now. I think that it is going to take a lot of work to keep it going but if they stay in the direction they are going they can do it. Especially having the 2010 mustang out.
GM and Ford differ in many ways. For one, Ford has posted an increase in sales and that is a good thing in this economy. The economy is not where it should be. First, Cash for Clunkers might have helped Ford out, but it would also have helped GM out. Past experiences, I always said that I would not own another Ford because I owned a Taurus and its transmission died at 90,000 miles; as I know some friends’ who did, as well. However, the big difference is that Ford is improving their cars and GM is always coming out with a new car that is ‘flashy’. A good example is that GM came out with the Terrain but it cost well over $30,000. The idea is to fix the cars so that people will want to buy the vehicles because someone typically buys a vehicle to last them a while. Vechiles, overall, are not a cheap item.
Shawn Flores
One of the key factors that differentiate Ford’s turnaround strategy from GM’s was the cash for clunkers program. GM accepted the program while Ford didn’t accept it. Due to this acceptance GM didn’t improvise their strategy and continued to waste money. Ford low on cash, limited their expenses by cutting jobs, lower cost for materials, selling units that doesn’t generate revenue and remarkably buyers are buying more high end models. Ford was more successful than gm, because they adopted to the recession and produced the cars that buyers needed.
I agree with several posts above,and believe Ford has had a better turn-around than GM because of Ford’s decision to refuse a bailout, and GM’s willing acceptance of a bailout. First off, I believe any bailout to a company is eliminating rights to many other businesses ; that is- If a company is not able to fail, due to being artificially propped up, it does not belong in business with companies who work very hard to survive, do well, and pay employees. Eliminating a risk of failure by offering bailouts gives a company like GM no incentive to thrive and adapt to a bitter, slow, car business. Ford’s refusal was seen by the public and gave added incentive to purchase Ford’s newly designed models , that have done so well for them in the past, along with added features. In conclusion, GM’s bad reputation after accepting a bailout, left Ford Motors ,who denied a bailout, looking like a stronger, more reliable car company amongst this reccession.
The key factors in Ford’s turnaround strategy were to dramatically reduce ongoing operating costs and to invest in the research and development of new car models such as the Fusion, the Escape, and the restyled Focus. In contrast GM’s turnaround strategy was to increase its market share by offering incentives to its customers such as cash back which the company had difficulty sustaining for extended period of time. An article by two Associated Press Auto Writers Dee-Ann Durbin and Tom Krisher stated that these differences in strategy have resulted in Ford’s $997 million profit while GM still struggle with its post-bankruptcy restructuring, trying to win back their customers; many of whom are steering towards Ford. GM is now forced to adopt Ford’s strategy of reducing operating cost which will take time to show any positive result. Ford’s proactive long-term strategies have proven to be successful in comparison to GM’s reactive short-term strategy.
Ford was able to come up with a strategy that was good enough to be able to now report earnings along with promising forecasts. Compared to GM that decided to take the easy way out and not even try to come out with a good solution that could potentially help the company come out of that poor situation they are now in.
Ford decided not to get help financially and looked for ways to try to solve its problems for example being able to cut back in some areas and as a result of that they are now reporting earnings. GM is in a tough position because they have manage to gain a bad reputation for not being able to come out with solutions to their problems. and rather than to find a good solution to their problems they just ask for money to solve their financial situation that in the long run backfired because now GM is in a worse position than how it started with.
Some of the key factors that are different in Ford’s strategy turnaround involves the market of the rest of the world. With this economical crisis, the need for the top quality exotic cars had drastically decreased. Along with many other imported goods. The people interested in a new car are now going to take the domestic, average vehicle. Plus, job loss and less costs for materials, buyers were driven to purchase a higher-end American car than a low-end, overpriced, foreign car. Ironically, Ford had hit an all-time low and ended up back on top in the industry unlike gms bankruptcy technique that were paid to the share holders. It has been forced to discontinue certain models and subsidiaries, only further hurting them financially.
Over the last year Ford North America posted a pre-tax operating profit of $357 million, its first profitable quarter since the first quarter of 2005. This means is the company’s first operating profit since the first quarter of 2008. Ford’s turnaround strategy greatly differentiate from that of GM. Ford has been cutting its Automotive structural costs by $1 billion, largely driven by lower manufacturing and engineering costs.
Some key factors that Ford did differently than GM are that Ford is selling weaker branches of their units (Volvo), discussions with the union, and making vehicles that have more appealing features. First of, Ford noticed a drastic drop in sales all over the world when it came to their Volvo line of vehicles, so they’re planning to sell that branch off to China which will give them more money and less to worry about. Second, there is a mention of the United Auto Workers rejecting contract concessions, which I believe means that Ford is going to do some deep discussions with the union to help them save money and still keep the UAW satisfied. Finally, Ford focused on their high-end models that had technological features as they noticed a lot of sales were being made there regardless of the high price. Theses are the factors I think that made Ford different from GM.
Ford as made a statement saying that they will be ” solidly profitable” by
the year 2011. Ford has rejected a bailout from the government while
hopeing to use diffrent methods to survivr through this economic crunch
while GM has choosen to take the bailout from the government. With new
models of fords winning awards and pleasing customers fords profits are
begining to stabilize. At the same time GM are trying to cut jobs as well
as win back customers who have looke elsewhere. According to Mark
Oline, an auto industry analyst ”GM and Chrysler still have quite a bit of restructuring to do and simply don’t have the product competitiveness across their lineup that Ford does”. In 2005 CEO Bill Ford jr had made plans to slash the work force, as well as close factories but to speed the
development of cars and trucks. Part of Fords success apart from GM
was good prepiration skills. The company saw the hit of the economy comeing and they prepared themselves.
Ford’s strategy for turning around auto sales differentiates greatly from that of GM’s; and the third-quarter profits recently posted suggest it is for the better. This almost miraculous profitability has been attributed to higher pricing and increased market share but is also more specifically due to Ford’s reluctance to accept a government bailout. Now that Ford has started making profit again, the company can get “back on the road” with no additional government debt. GM on the other hand has to overcome their inverse profitability along with a hefty government debt now looming over their heads. It is easy to see who made the right decisions when it mattered most.
GM needs more money after the billions of dollars they received after there stimulus package. Fords plan and strategy for a turnaround was favorable net pricing, lower material costs and producing vehicles that customers want to buy. GM stuck to alot of the same concepts as previouse years. Ford decided to take a different route with more a desirable product. Ford was in debt made a wise desicion not to be bailed out alond with the rest of americas weaker corporations.
Gearong towards your consumer is a key factor. Being proactive rather than reactive are basic business concept. Cutting cost and restructering is a key factor to operate when needed to cut cost in a recession. Fords denial in a bail out show the confident in their turn around. Ford has cut jobs, lowered costs for materials and consumers buying more higher models equipped with technological features. Ford also had revenues fall by $30.9 billion from $31.7 billion, but had positive cash flow of $1.3 new billion. The company has increased it’s forecast to $15.7 million new vehicles sales, but I do not believe that Ford will be able to meet its forecast because the world is still in a global recession and I do not believe there will be enough consumer demand to meet Fords expectations.
Ford has put in new strategies that have shown a turnaround for automakers. For the first time since 2005 there has been a profit putting them in a better position than General Motors. There are several differences in strategies used to recover from their struggles. Ford took action in 2005 when the CEO created a plan consisting of shutting down factories, cutting a portion of the work force and speeding up the development of cars and trucks. In 2006, the idea to mortgage assets was added to the plan, giving the company the cash to fall back on when the economy weakened. Ford also relied on controlled production and a string of new products, allowing them to command higher prices. Practical cars have gained Ford popular and critical acclaim. General Motors went about fixing their problems in a very different way. In addition to making thousands of job cuts, GM looked to the government for help. The government assisted the company in their recovery process by lending them billions of dollars in financing. General Motors lost many loyal customers throughout the industry.
Ford did things a bit differently than either GM or Chrysler by not asking for government aid. So while Chrysler was losing stake to Fiat and GM was selling itself to the government, Ford instead decided that since they had sufficient liquidity to fund business plans, it did not need to ask for government aid. Executive chairman of Ford, Mark Fields, also wrote a plan called “The Way Forward” naming some of the ways in which Ford will once again become profitable. In it he talked about how Ford will try to become far-sighted, be more innovative with new types of fuel-efficient cars, and be more customer-focused, to try to deliver exactly what the customer wants. Meanwhile GM has decided to not be as innovative and instead sell the divisions that were not making money, like Pontiac, and aggressively drive for additional sales in its more high-growth segments, like compact and luxury SUVs, large pickups, and entry luxury cars. All of which that are considered as below average in fuel-efficiency.
What are the key factors that differentiate Ford’s turnaround strategy from GM’s?
Ford has become innovative in selling their high end models that have technology provided in them and have also made those cuts that businesses hate to make when their people love working for them. GM seems to be stuck in their same old groove, providing On*Star in their vehicles but not integrating many other available technologies, making a new Camaro when Ford has been there, done that, and is now remaking their family car into a more luxurious model. GM is still overspending and expecting more help from the government, but they cannot prove that they are actually trying to tighten their budgets. Ford may not be clearing every market they sell in, budget wise, but they are still being thrifty and they made their profit while GM is still in the red. Ford also has a few lower priced vehicles than the GM markets do and with the added benefit of having those technology features we cannot seem to live without, more people are buying Ford.
Ford’s strategy plan work out.For the first time since 2005 there has been a profit putting them in a better position than General Motors. There are several differences in strategies used to recover from their struggles. it’s helped by higher pricing and increased market share. GM seems like still struggleing . They expected more money from government. GM might be use the way the Ford company use to increase their margin. people looking for the cheap and more quality. and the ford has the cheap and more quality than GM. I think ford made right decision for the compay.
Ford has done a remarkable job to differentiate itself from that of GM. Ford declined government assistance and instead went out on there own and have excelled. They are at least doing a greater job than GM. They are projecting that they will generate a full-year profit in 2011. Also Ford has not spent money in unnecessary areas and focused simply on the cars that where successful in the sales department. The company has also said they will be having new vehicles and have experienced millions of dollars in new vehicle sales. GM on the other hand has not made the necessary changes to help there company which is why they are still struggling to keep their head above water even with the government aid. Ford is spending their money wisely and making cuts in areas that are needed while Gm has not made the necessary steps succeed. This is why Ford is doing a lot better than GM.
It is obvious that Ford has taken steps in the right direction to gain profit in thier business, but GM in the other hand has not. Ford just reported a profit of almost 1 billion dollars. The improvement came from job cuts, lower cost for materials and consumers buying more high end models equiped with special features. Gm in the other hand has not met job cuts and are not as invested to get better vehicles on the road like Ford has, Gm has been known to give retirement plans instead of making better vehicles.
One of the majors key to Ford Motors turnaround to profit this year is fiscal responsibility while GM is still stock with the old ways of doing business. The Ford motors has taken steps to reduced the firm’s size by closing some of it plant that’s not productive, like the pick up plant in Edison, New Jersey. It reduced it excess capacity and rejuvenate product with expressive styling with emphasise on eco-friendly cars like Ford Fusion, Mercury Milan . According to the Consumer Report of last week, it named 46 of 51 Ford, Lincoln and Mercury models as average or better in reliability, a far better track record than either GM or Chrysler.These factors no doubt has contributed to the improvement and increament on Ford Motors retail market shares than its competitor GM. The GM motors is still stock with it gas guzzling vehicles and trying to cut jobs.
Fords turnaround strategy is the complete opposite of GM’s and is clearly working according to the article. Ford has made job cuts, found lower costs for materials and increased the price of their cars. It’s seems GM did not have a strategy, since all they have did was ask for everyone else’s money. GM is still in the same situation they were in before the bailout. Regardless of who makes a better car at a better price, I think consumers feel more comfortable buying a vehicle from a company that appears to be stable. Ford obviously made the right decisions and GM did not.
‘Fords emerged as the sale American automaker in a position to survive the steepest sales downturn in decades without a goverment bail out’. In the past year Ford turned to new strategies which has lead to a turn around in Fords financial situation. In comparison to GM Motors Ford kept their engineering simple by adding technology and comfort to their previous cars, i.e taurus. In addition Ford wanted to fix their financial problems on their own. GM turned to the goverment for help; however, invested the bail out money poorly and remain in the same situation. On the contrary Ford resorted to job cuts, lower costs for materials and increased technology. It’s clear that Fords turn around plan is more efficient and working out better than GMs plan.
It seems that Ford Motors really knows what the people want and they work very hard on providing it to their customers. GM on the other hand doesn’t seem to care much about the people. GM is shutting down their productions and people are losing their jobs. Is that the kind of company that cares about people? GM doesn’t like change; they want to continue to make the same gas guzzling dinosaurs. Ford has introduced a new model a few years ago called Ford Fusion and it has been doing great. Fusion is a great looking car and now it comes in Hybrid. They also redesigned the Ford Taurus and it looks like they are trying to make the car look more appealing to the younger generation. I read an article on America’s Dirtiest Vehicles and it looked like just about every other car was manufactured by GM. If GM is planning on staying in the game then they are really going to have to rethink the way they do business and maybe take some pointers from Ford Motors.
Ford’s turn around strategy is much for sufficient in making a profit, even during the recession. Unlike Ford, GM continues to make non-fuel efficient cars while Ford is continuously working to provide cars that may be expensive, but they are fuel efficient which is a main priority to consumers today. Ford has been able to make such improvements because of “job cuts, lower costs for materials and consumers buying more high-end models equipped with technological features” which is stated in the Wall Street Journal by Jeff Bennett. As long as GM continues to produce these gas guzzling cars and trucks they will never be able to maintain a profitable business or pay employees. GM’s strategy simply does not compare to Ford’s strategy.
Ford is a fine example that shows American’s that there are ways to grow in a recession. The difference in strategy between GM and Ford is that instead of trying to fix the problem with a “injection” of money, Ford spotted the problem and solved it using their own resources. Which is a vital tool that could be used in the future of Ford, they will better equipped in dealing with future recessions due to their experience now. Ford is not only surviving but profiting in this recession without the help from “cash for clunkers”.
Ford’s strategy differs from GM in several different ways, but I will only name a few. First, Ford refused a bailout, while GM has taken two bailouts totaling billions of dollars from the government. Second, Ford focused on producing fuel effiecient vehicles, while GM continued to produce gas guzzlers like Hummers. Third, GM agreed to provide healthcare and pensions to a host of retired workers, which costs GM millions of dollars every single year. These are just some of the factors that differentiate Ford’s turnaround strategy from GM’s.
The strategy Ford used differed greatly from GM. Ford has been producing more fuel efficient cars, where as GM are still making cars such as the Hummer. Ford cut jobs and increased the prices of cars and that worked for them. Because of this they had a third-quarter profit, something GM hasn’t had. Ford also did this without the help of anyone, unlike GM. These strategies have helped Ford greatly and hopefully will continue to.
The key factors that differentiate Ford’s turnaround strategy from GM’s is Ford being able to make a huge profit eventhough the U.S. is in a recession. According to the Wall Street Journal, “Ford Credit’s earning rose to $427 million from $95 million” and ” The company on Monday profit of $997 million, or 29 cents a share, compared with a year-ago loss of $161 million”. As you can see, Ford is starting to work its way up and coming back to make more sales. As i was reading the article that was passed class, I see great numbers are higher than the previous years. The reason its improving is because of job cuts, lower costs for materials and consumers buying more high-end models required with technological features. With this kind of situation, Ford had made a comeback and with their confidense, they believe the global economy will improve in the future.
Ford’s turnaround strategy differs from GM’s in that they often did the opposite of what GM choose to do. In the article, “How Ford is Making its Comeback” Paul Ingrassia writes, “When General Motors kept its CEO (the recently deposed Rick Wagoner) a few years ago, Ford brought in a new one, Alan Mulally from Boeing. While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size. The zig-versus-zag pattern continued when General Motors bet big on home mortgages through GMAC and then sold control of the financing unit, which now is on government welfare, just like General Motors itself (while) Ford avoided home mortgages and held onto its finance arm, Ford Motor Credit, choosing instead to mortgage all its assets to raise money to fund its turnaround effort.” And so, Ford is looking at a third quarter profit for the first time since 2005 and GM is not doing very well.
Over the last year, Ford has started it’s turn around based on their decision to not get aid through government-funded bankruptcy. One key factor GM seems to be missing in their economic strategy. Although this self-help strategy that Ford used increased their debt, about $27 billion to $17 billion, the company is shoring up its balance sheet by swapping some of that debt for new equity. The technique that Ford used might have created $10 billion more in debt but in the long run they will be more successful.
Ford has better reasult than GM because they decided not to get any money from the government.Ford has went back to their old style of strong cars where as GM is still struggling and is closing down some of their factory.Ford is trying to solve its job cuts where as GM isn’t”.Ford has $997 million profit third quater profit most in North America is in the last three years.”In conclusion by Ford going back to basics they are heading towards postive direction.
On a different note, Ford Motors Co. reported earnings on Monday along with some promising forecasts. As you read the press release, think about the actions Ford Motor Company has taken over the last year. What are the key factors that differentiate Ford’s turnaround strategy from GM’s?
There are many different reasons why Ford has turned itself around and had a 3rd quarter profit and thus differed from GM – the biggest reason being that they had the better business plan. Within this business plan, Ford has made several key choices that have separated them from GM – they did not except the bailout, they integrated newer technologies into the vehicles, they cut back on expenses, and they lowered the prices of their vehicles. Because they refused the bailout money offered to them, Ford was able to properly motivate their company to get out of the falling rut they were in. If they had accepted the money, as GM did, they wouldn’t have been nearly as strong as they are/were (they would be “leaning” on the government’s shoulder). Ford has also been using some of the newer technologies in their vehicles along with the old ones – for instance, the voice command system. GM, on the other hand, is still using only the On*star system, which is good, but not new. Finally, Ford has cut back, significantly, on their spending and needless expenses, unlike GM. This has freed “billions of dollars of costs” for the company. Because of this, they have been able to have lower prices than GM which gives the buyer an incentive to purchase a Ford vehicle instead of GM.
Ford motor company has shown all of us what capitalism means. Capitalism is conventionally defined along economic terms as The production and distribution are privately or corporately owned and development is proportionate to the accumulation are reinvestment of profits gained in free market. We have to ask what did ford do different? I think Ford took a good look at what would happen or what would not happen if they accepted bailout money. What we are seeing is a much leaner company. Ford brought it cost under some what control. They did this out of survival mode. Ford got concessions from most of it unions its suppliers and all its management team. When gasoline spiked to 4.00 a gallon ford motor company was on the cutting edge to supply Americans with more fuel efficient and hybrid cars. Ford motor company is the nations largest rental retailer and saw the trends of the consumer. In Lemans words people wanted smaller cars better gas mileage and better quality. All things ford has produced with its four new models and the buying public are very responsive. Above and beyond ford motor company realizes that its main objective of being in business is to make a profit. Without a profit the owners and the investors would be no more. So i salute ford motor company fo standing up against the unions’ the united states government, for its stance on refusing the bail out. ford understands without profitable company no body wins. Business’ are in business first to make a profit with out a profit nothing else really matters. Without a profit there is n business , there is no unions to work for them, there are no suppliers to supply them.
The key factors that differentiate Ford’s turnaround strategy from GM’s were that ford had the back to back quarterly profit which showed that they were going to be at a good spot in the year of 2011. Gm on the other had was focused more on selling there cars and coming out with new cars at the wrong time which i think mess up there plan. Ford overall had a better system then GM they manged there money right and profited 27 million from 4 million. Helping them put more effort into there cars and help get more buyers.