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Both Ford and GM are leaders and fierce competitors in the global automobile industry. At first glance, the two large car makers may appear to have similar business models. However, potential investors who dive deeper will find key differences as well as many similarities between the two companies.
In terms of the worldwide market, neither Ford nor GM lead the way. In , Toyota held the largest global market share at Ford was third with 5. The global market is highly competitive and diversified. As emerging economies with large populations such as India, China, and Brazil continue to develop, establishing a significant presence in these areas is critical for the future growth of both Ford and GM.
GM is a smaller company than Ford. Both companies have achieved significant revenue growth since the economic crisis of and , but neither has returned to its previous total sales volume. Each company has experienced serious financial difficulties in the past 10 years. It reported substantial net operating losses in , , and During this period, under the leadership of CEO Alan Mulally, Ford began initiatives to consolidate operations and create more appealing car models.
These plans to become more efficient and innovative were already in process when the economic recession hit in Although the decreased demand for cars during the recession hurt Ford, the company refused a government bailout offer, avoided bankruptcy , and generally emerged from the recession a stronger company.
GM became insolvent in and required government bailout assistance and a Chapter 11 bankruptcy reorganization in to keep the company operational. The company has since fully repaid its bailout loan and returned positive net income to shareholders since then. GM is making strategic investments to produce more innovative, efficient, and technologically savvy vehicles, which it believes drive future growth. It is also investing significantly in emerging markets such as China. Revenue and profit generation through vehicle financing and leasing arrangements are critical to both Ford and GM's business models.
One of the main differences between these two competitors is the number of brands owned and marketed by each company. Recent divestitures or discontinuations of brands include the following:. In , Ford had 27 different vehicle platforms across the world; in , it had 12, and as of , it only owns two: Ford and Lincoln. General Motors owns and operates a plethora of automobile brands across the globe.
GM, similar to Ford, has divested or discontinued several brands, including the following:. Hummer was discontinued by GM in but has since returned. Many of its discontinued brands were shut down due to poor performance rather than strategic planning. Both Ford and GM recognize the importance of improving fuel efficiency and leveraging technology to keep their product lines popular among customers.
Many countries, including the United States, have strict laws requiring improvements in fuel efficiency and the amount of environmental pollution created by vehicles. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel.
It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over countries. The most successful, the. The company will meet this goal by the transformation into the world's leading consumer company for automotive products and services which make attractive dividend yield and growth in their share price Ford Motor Company increases fourth-quarter dividend by nine percent.
Over time, Ford business strategy has responded to the challenges of the motor industry. The corporate culture of Ford management is establishing strategic business units that complement the company's global scale and structure.
Thanks to GM, many of the popular vehicle brands that are available, they have produced. The history of GM dates back to The company started as Durant-Dot Carriage Company which started in and by was producing over , carriages a year Flint. Even with global volatility, the automotive industry is enjoying considerable gains and profitability while annual sales have reached prerecession levels.
Last year, drivers in the U. The most immediate challenges that threaten the automotive sales are currency headwinds and wavering demand in emerging markets. From a manufacturing standpoint, the auto industry must evolve with major societal trend to remain relevant including a shift in consumer demand, increasing regulatory requirements and the need to integrate. February sales figures show a particularly strong increase of Home Page Ford Motor Company.
Ford Motor Company Best Essays. Open Document. Essay Sample Check Writing Quality. Henry Ford began a family automobile business in ; this was during the industrial revolution. This business has become the most famous automobile brand in the world. Over the years the business structure had adapted to changes in leadership, markets trends and the economic conditions. This strategy is flexible and enables Ford to use technology to control the production of variety of products in moderate, flexible qualities and with a minimum manual interaction, whose goal is to eliminate cost verse product variety.
In applying for the loan, Ford said the money would be spent to upgrade 13 facilities in Michigan, Illinois, Kentucky, Missouri, New York and Ohio — "resulting in state-of-the-art assembly and manufacturing plants" with flexibility to build fuel-efficient vehicles that meet changing demands.
The government site notes that "Ford updated several facilities to continue improving fuel efficiency in more than a dozen popular vehicles, including the Escape, Fiesta, Focus, Fusion and Taurus car models, as well as the F light-duty truck. On a side note, the Fiesta has always been built in Mexico. Production of the Fiesta, Focus, Taurus and Fusion will have been discontinued by the end of The company this year settled a class-action lawsuit involving a defective transmission in its Focus and Fiesta vehicles.
Ford is praised on the government website for its "commitment to introducing new hybrid, plug-in hybrid and all-electric vehicles. We plan to pay off the loan in full and on time," T. Reid, Ford spokesman, told the Free Press on Tuesday. When asked whether Ford had requested deferral of its loan payments, Reid said additional information would be revealed in upcoming regulatory filings. Ford isn't alone in the struggle, but it entered reporting a much smaller-than-expected profit than its competitors.
Executives said they were disappointed and promised to do better. Tim Stone, chief financial officer at Ford, has said the company believes it has enough money to get through Morgan Chase. That they were able to extend the liquidity another year.
The company also withdrew guidance for its financial performance because of unpredictable circumstances. Still, the costs associated with renegotiating financial deals are not trivial, said professor Kara Bruce at the University of Toledo College of Law, who specializes in bankruptcy and commercial law.
We plan to emerge from this crisis as a stronger company.
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