Swot Anlaysis of Ford

Ford's Mission Statement: We are a global, diverse family with a proud heritage passionately committed to providing outstanding products and services that improve people's lives.

The Ford Motor Company makes and sells automobiles. Founded in 1903, the company developed from Henry Ford and his vision to make cars available to everyone. Beginning in 1980, people outside of the Ford family held many of the powerful positions within the company, but on Oct. 30, 2001, Henry Ford's great grandson, William Clay Ford Jr., was named Chief Executive Officer, ending the decades of power sharing.

Ford, number four in the Fortune 500, is a huge conglomerate and the top pick-up truck producer in the world. Only General Motors, its greatest competitor, makes more cars. Toyota and DaimlerChrysler are other top competitors. Ford has grown so large that it has bought out many competitors in the car industry including Volvo, Aston Martin, Jaguar, Lincoln, Land Rover, Mercury, and 33% of Mazda. Ford and its subsidiaries operate over 26,000 dealerships worldwide.

As a whole, the US auto market slumped steadily through the year, with sales falling five percent overall in July of 2001 and Ford's performance has been the worst. The best way for Ford to measure success is by sales revenues, or how much money the company makes from selling automobiles. In 2000, Ford sold over $170 billion, a 4.6% increase from 1999. However, in the second quarter ending June 30, Ford lost $752 million, mainly the result of the13 million Firestone tire replacements. In the third quarter of 2001, Ford's revenues dropped by $6 billion from the previous quarter as the suffering economy worsened after the September 11 tragedy.

Another good indicator of Ford's state is whether or not the company is laying people off. If Ford's sales struggle, then the company is forced to produce fewer cars to make up for the lagging sales. As a result, fewer employees are required for the lower levels of production. Currently, the company employs about 350,000 people, but layoffs have been frequent and severe in 2001. Ford has laid off 5000 employees in the past four months and is considering closing more US plants that employ 4,500 employees.

Along with extensive layoffs, Ford has been faced with the Firestone tire crisis. Ford has already paid millions of dollars in settlements, and the end is not in sight. Recalling vehicles continues to hurt Ford's image, along with the bottom line.

Clearly, Ford's three main public - employees, customers, and investors - have reason for concern. Slumping sales, lower productivity, and reputation damage threaten the solidity of the company.

However, Ford has a strong corporate identity system. Everyone is familiar with the blue oval containing a cursive "Ford" in the center. Ford has a great reputation as an American company; many customers take pride in buying Ford - an American car. By not changing the name of its subsidiaries, Ford has maintained its American image despite having operations throughout the world. Ford's products and services are available in 120 countries, with production occurring all over the world.

Strengths and Weaknesses

Within the past year, Ford's reputation has been plagued by extensive recalls. "When you have three, four or five recalls, it creates doubts about the vehicles," said automotive analyst Greg Salchow. Beyond this main internal issue, Ford has also endured external problems like the falling economy and the Sept. 11 attacks, forcing them to make internal changes to make up for slumping sales. Here we have provided a list of internal strengths and weaknesses, organized by public or major issue, that focus on what the company has done internally, either as a result of external issues or as common procedure.

Strengths:

Community Relations:

Ford has made numerous efforts to target the surrounding community. A breast cancer awareness campaign was created in which celebrities are enlisted to tell how breast cancer has affected them. The company takes strides to protect the environment demonstrated by the development of an electric vehicle and efforts to increase fuel efficiency. Since the Sept. 11 attacks on America, Ford and its employees have made extensive donations and held fundraisers and events by Ford in response. (See Appendix)

Employee Relations:

Ford provides incentives for employees to work at high quality levels. For example, the "Thumbie" award is given to employees who demonstrate a high personal commitment to their customers and community. Higher wages are also characteristic of the company. Hourly workers typically have wages from $19-$26 an hour, while skilled trade workers make $21-$30 an hour. For the last 20 years, Ford has issued no involuntary layoffs or dismissals of salaried employees, although this year may be an exception. The company also created a Family Service and Learning Center program for Ford workers, family members and retirees, offering health classes, after-school tutoring and trips for seniors.

Investor Relations:

Ford maintains a high level of communication with its investors and potential investors. The company accurately and honestly reports earnings and losses in ways easily accessible by the public via company Web site, mailings, and print materials by request.

Weaknesses:

Investor Relations:

As a result of the recessing economy, investors are worried about slumping sales and profits, a possible dividend cut, a cash position that has fallen to $4 billion from $15 in a year, and now, the possibility of a credit downgrade. The Ford Board of Directors cut dividends on class B and common stock for the first time in a decade. Due to increasing expenditures from recalls and severance packages shareholders aren't getting as big of a return on their investments in the company.

Employee Relations:

Ford is using a "voluntary separation program" to lay off employees, and plans amount to the elimination of about 10 percent of Ford's salaried workforce in North America