The Ford Motor company, which is among the leading automobile corporations in the U.S market, has found itself facing a lot of difficulties in its business operations. The company sales have dropped and its returns reduced drastically. This depicts an unusual situation to the organization which occupies one of the leader’s positions. Still, there are new automobile organizations including the Cerberus’ firm, which have recently been established in the region. For the last few years, the company has therefore been unable to operate profitably. As evidenced in 2006, Ford Corporation incurred a loss of 12.7 billion. Seeing the poor and declining performance of the company, the chief executive officer (CEO) is concerned about the improvement of the company’s profitable operation and maintaining of its competitive edge in the market (Kiley, 2010).
The Ford Corporation is believed to have been the pioneers in many areas. For instance, Ford is cited to have been the pioneers of the modern management system as well as recent technologies used in the automobile industry. The Ford Corporation is therefore after a turnaround to bolster its returns and maintain its competitive edge in the market. The Ford’s CEO, Mulally is focused and interested in re-establishing the Company’s reputation and competiveness to assure the stakeholders and the public of the company’s excellence (DeMatio, 2009).
Key Ford’s restructuring Issues
- Ford’s restructuring process to address the unprofitable operation and the issue of stiff competition in the market based on its products essentially demands management of expenses and costs
- Products upgrading to meet the set standards place additional expenditure on the company’s operations.
- Delivery of the quality products and services to the targeted audience/consumer demands adequate knowledge and understanding of consumer needs, research and remodeling of products and terminations of the non-performing brand products.
- Poor product development strategy has severe effects on a company’s profitable operations.
The Ford Corporation has been depicted as incurring losses in its operations and most of its market is being gradually possessed by its affiliated and competitors companies. Overtly, it is established that Ford Corporation at one time served as a leader in the assembling of quality automobile products. This attracted a large number of clients, hence grabbing the lion’s market share in the region. Despite the attraction of the large number of consumers at first due to the high quality products, the company has failed to monitor the quality of its products and it no longer values the set standards. This is affirmed the fact that the company is now dealing with non-reputed Brand widely known as Ford Edge crossover SUV without essential modern parts such as electric opener trigger. Surprisingly, the company has no single own produced product other than those of the sister firms. Most of the clients are not comfortable with the models as it proved to be quite inconvenient especially under rainy conditions. Consumers feel that they need more advanced luxury automobile; that is automated ones. Consequently, with the emerging of new competitor firms which are producing automobiles of high quality, thus satisfying the consumer needs, the Fords has lost most of its consumers to the upcoming firms. The deterioration of the Ford’s profitable operation and competitiveness is matter of great concern to the stakeholders (Brent, 2010).
The company has several ways that it may employ to handle the problem at hand. These include:
- Improvement of the current models to meet the set standards as per consumer demands
- Establishment of new production line to manufacture new brands of high quality
- Closing down of production lines that are not profitably operated
- Reducing costs of production, operations and distribution of the company’s products
- Increasing management and communication efficiency within the company networks
In the endeavor to settle the problem of unprofitable operation and bolster the diminishing competitiveness of the Ford Corporation, increasing management and communication effectiveness is viewed to be the best solution
Since the inception of the modern technique of automated electric triggered car doors, there are no much efforts that have been put in upgrading the company’s vehicle standards. Communication among the managerial team appeared cut-off right from top to the bottom. In this case, information belonged to individuals or groups of individual rather than entire organization, and therefore information access, flow and penetration was less from the either side in the hierarchy of the organization leading to the general deterioration of product quality, and the subsequent market competition. In the CEO focus, he mitigated conflict situation by criticizing the corporate philosophy of seeking to be understood more than they seek to understand others, which perhaps has barred information necessary for changing their products (Wolfe, 2010). The Ford’s management team should therefore do the following to increase its profitability and competiveness.
- Evaluate its communication systems, data and information flow both internal and external ones
- Installed a system that allows easy access to information and data
- Carry out market and product research on its product’s quality, features and brands
- Evaluate the collected data on the basis of cost effectiveness and efficient
- Decide on non-performing product lines and crunch them
- Introduce products appealing with to the consumers