Evolution of Ford Motors

8/10/2019 Evolution of Ford Motors

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THE CORPORATE

EVOLUTION OF THE FO

MOTORCOMPANY OF CANAD

1904-2004

SARDAR KHAWAR

ADNAN AHMAD


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ABOUT THE COMPANY

Manufactures and distributes automobiles on six continents

Employs approximately 224,000 people and operates 90 plants worldw

Brands include Ford, Lincoln, Mercury, Volvo, Mazda and Ford Motor CCompany (financial service).


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FORDS BRIEF HISTORY

1903Ford Motor Company founded in Michigan

1908Model T introduced

1913first moving automobile assembly line in the world

1956Fords stocks go on sale (10.2 million shares sold the first day)

1987beginning of the acquisitions of other brands

1988Ford Motor Company reached the peek


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THE ERA OF AUTOMOTIVE PIONEERS:

FORD OF CANADAS BIRTH

Ford already lost two companies

In return for granting the use of Ford patents and drawings , the stock

of the Ford Motor Company received 51 percent of Ford-Canada,

according to their original Ford-U.S

By that point, the Company had become the most profitable enterprisworld

Henry Ford and his investors were millionaires

Model T was the most successful car in the industry


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CONTINUE

Ford-Canada's operational tone and relationship to the American firm

very early

Company's management acted largely independently of Ford-U.S

The two companies operated as distinct entities

For example, Ford-U.S did not produce a two-door Model T in somwhile the Canadian company produced four-door Model T's

The 1904 agreement granted Ford-Canada the exclusive right to "man

and sell" Ford products in the British Empire


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NOT A BRANCH PLANT: FORD AND THE

POLITICAL ECONOMY OF THE CANADIAN AU

INDUSTRY, 1900-1920

High duties ensured that the Canadian auto sector grew up as a "cre

the tariff,

In 1904, McGregor was keen to provide Canadians with a reliable, w

vehicle, while Ford in Detroit already had the technology, and, most c

the product.

The Canadian venture would cost Ford little beyond sharing his pro

and engineering plans and providing his "services" to the Canadian com

In exchange, Ford would share in any profits that the Canadian c

might generate in the future, and Ford vehicles and the Ford name w

popularized in a neighboring market.


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CONTINUE

By 1909, the tariff had not yet come to pass

As the original Canadian automotive "early adapter," McGregor estab

Ford operation in Canada

McGregor was in charge of the Canadian operations, Ford allow his C

counterpart to continue the managerial approach of "one-man leaders

Ford had not allowed any public ownership in the European companie


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THE PROBLEM OF FORDS CANADIAN

OWNERSHIP, 1920-1940

Henry Ford took little interest in the Canadian firm

His only son, Edsel, was keen to bring the company under the paren

control

Campbell proposed that Ford family utilize the unissued voting sha

remained in Ford-Canada's treasury to control a "voting trust

Campbell was in fact keen to see the Ford family have "returned to t

voting control originally contemplated in the 1904 agreement

Campbell did not consider that Ford of Canada's independent sta

harming the Ford family, but he felt that the Canadian company would

served by remaining a Ford-controlled entity


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CONTINUE

Campbell admitted, without Ford's ingenuity and the American Ford

successes, the Canadian company would be nothing

"Anyone closely identified with either the American Company or the

Company knows that the Canadian company can only carry on busines

the Canadian company has the full co-operation of the American Cothose associated with it

By 1930, Edsel had purchased another eleven thousand voting share

his control over the voting stock of the Canadian company to 47 percen


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THE ERA OF ORGANIZATION MEN: FORD GA I

MAJORITY OWNERSHIP AND ORGANIZATIONA

CONTROL OF FORD-CANADA , 1945-1965

Edsels ascendance, transformed the Ford Motor Company into a m

professionally managed organization, also had a significant impact

relationship between Ford-U.S

Purchased blocks of shares on the open market and from the Ford

giving the Ford Motor Company 52 percent of the voting shares o

Canada The company expanded the board from five to seven members

The Canadian company was quite receptive to the new arrangement

substantially curtailed its operational independence in a host of areas


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CONTINUE

In early 1950 Roberge informed the Canadian management that "un

new relationship agreement dates as of May 1, 1949, it will, of cou

necessary for to supply the Associated Products organization with info

concerning your company's activities

Established Ford International in New York, to "give coordination, adv

assistance to all Ford international activities" and to streamline the cominternational organization and control

Ford-Canada, as a unique entity within the Ford Empire that e

products to its "exclusive territories," did not easily fit into t

organization


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CONTINUE

The Canadian company's managers were opposed to this idea

Ford executive offices settled the matter: Ford-Canada would report

headquarters in Dearborn, and the company would remain outside t

International hierarchy

Henry Ford II himself soon became a key player in efforts to integNorth American industry, a move that meant the final end of Ford-C

operational independence.


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THE ERA OF CONTINENTAL INTEGRATION:

FORD-CANADA AND THE AUTO-PACT REGIME

1965-1975

The Canadian negotiators understood that unrestricted free trade cou

out Canadian production in an industry already over 90 percent ow

American interests

Instead, the two governments and the industry came to a comprom

Canadians succeeded in having local content, investment, and output

that guaranteed certain levels of Canadian production in the American

The auto pact provided a new departure for the company's North A

operations


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CONTINUE

Henry Ford being an advocate of free trade, although had often

tongue on the issue of Canadian Ford company, which neede

protection in order to avoid being overwhelmed by American imports

Trade treaty, reduced Canadian auto tariffs, prompted Campbell to

Edsel Ford to tell Washington that the Big Three auto companies wer

favor of this measure, as it would impact their Canadian subsidiaries Ford II's Canadian officials had kept him informed of the latest develo

on the negotiations between the industry and the Canadian governme

The new arrangement allowed to import parts and autos duty free, as

they maintained a minimum 50 percent North American content


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CONTINUE

Ford officials had explained that they foresaw difficulties meet

Canadian value-added requirement, due to rationalizing engine produ

Canadian-made vehicles would no longer contain Canadian-built engin

The president of Ford-Canada, now reported to the head of the sale

for North American operations, while the director of the Canadian O

Group was responsible to the parent company's executive vice prescharge of overseas operations.

Formerly an independent company with its own hierarchy and structu

of Canada had become a mere division within Ford's North A

operations.


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FORD OF CANADA IN THE NORTH AMERICAN

AUTO INDUSTRY,

1975-2004 North American industry faced dramatic challenges as the Big Three respo

the oil embargo and energy crisis, the flood of Japanese imports, the restruc

the industry in the late 1970's and early 1980's, the arrival of foreign trans

both the United States and Canada, and the creation of the 1989 Canad

States Free Trade and 1993 North American Free Trade agreements

In response the Big Three shifted a greater percentage of their North A

assembly operations to Canada in an effort to take advantage of lower c

good productivity and quality results at its Canadian facilities

In 1965, Canadian production was 7 percent of the continental marketplac

the 1990s,Canadian production consistently outpaced that of North Ameri

percent.


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CONTINUE

For Ford, this meant that, by the 1980s and 1990s, its Canadian plants

the sole production source for its Windstar/Freestar minivan and its

important Crown Victoria and Grand Marquis midsized cars, which form

significant element of fleet sales and are used throughout North Amer

police vehicles and taxi cabs

Ford had reorganized its North American concerns into the North AmeAutomotive Operations (NAAO), consolidating the United States, Cana

Mexico in 1972

By 1984 the parent company, had gobbled up all but 11 percent of its

Canadian subsidiary


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CONTINUE

In April 1995, Ford announced that as part of this global "Ford 2000" s

the company would buy out the remaining 1,250 Ford-Canada shareho

$150 per share and take the company private

The plan was to cost the company C$76.6 million and end Ford-Canadadecades as a publicly traded company


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SWOT ANALYSIS

Strengths

Strong and globally positioned brand

names

Large employee base with highly educated

engineers and good R&D department

One of the largest automotive

manufacturer (along with a long history)

1285% increase in net cash

Huge increase in total equity

Weaknesses

A lot of time spent to actually put

product on the market

Recording continuous losses (net i

from 2006

Low quality of new products (reca

causing losing customers)

Lack of management of the compa

EPS very badin negative number

(unattractive for the investors)


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SWOT ANALYSIS CONTINUE

Opportunities

Consumers demand hybrid and fuel

efficient vehicles

Increase in consumer spending trends

Consumers demand more innovative

vehicles

Global expansion

Industry experiences slow and steady

growth

Threats

Weak USD

Increase in steel and resin pricing

Increasing gasoline prices

Stricter CO2 emission standards

Increasing mortgage rates


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NEW OBJECTIVES

Reduce manufacturing expenses by 15-20%

Introduce new small fuel efficient vehicles

Enter Latin American and Asian market with hybrid vehicles

Develop affordable electric car for US market

Increase market share

Build up strong financials (increase net income and EPS by 15%)


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RECOMMENDATIONS

Manufacturing of new small fuel-efficient vehicle

Entering the Latin American and Asian market with hybrids

Implementation of electric car in the US market

Manufacturing units in Asia and China zone for lower cost


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THANKS!

Evolution of Ford Motors

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