...Summary This report provides an evaluation of strategic and financial evolution of General Motors Company (GM) in the last ten years. Events like the global economic recession lead to a deep restructuring of the firm, filling for bankruptcy and a government bailout. The report provides an analysis of GM’s business model, products, the markets it is competing in, the global automotive and manufacturing industry and it also assess its attractiveness for incumbents and new entrants is also With a brief history of GM we evaluate its reaction to the global recession. We compare their business model before, during and after the recession, comprising the strategic and financial implications of their restructuring plan. We provide results from this restructuring, including improvements in GM’s financial ratios like ROA (from 0.05 in 2010 to 0.07 in 2011) and ROE (from 0.23 in 2010 to 0.25 in 2011). While the recession significantly affected GM, it also affected the rest of the automobile industry, including their American competitor Ford Motors. We compare the main differences between these two important companies and analyze the way they reacted to the recession. We also observe the approach that Ford has taken to recovery, in terms of governance, recession reactions and financial branches. The report ends with a conclusion summarizing the key differences between General Motors and Ford Motors, and how these differences influenced their financial performance. We can conclude that the way...
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...You don't have to use any sign. Present value and Future value can be calculated from common sense. Simple Interest: FV = PV*(1+r*t) where r=rate of interest per annum and t=number of years. Compound Interest: FV =PV*(1+r)^t , where r=rate of interest per annum , t=number of years. PV in both the cases can be calculated by deviding FV with the other part in the right hand side.That is (1+r*t) in case of simple interest and (1+r)^t in case of compounding interest.The examples in the text show a unique characteristic (think: positive or negative sign) associated with how the PRESENT VALUE (PV) of a monetary sum (when given) should be expressed when you are solving for future value (FV) of that sum. What is that characteristic? What questions would you ask a mortgage lender if you used the Time Value of Money calculations to compare loan terms with what you "expect" to pay (or owe) based on your calculations. If you've never considered a home loan, substitute a car loan or (dare I say it ...) a student loan. Time value of money is most important factor when we are dealing with loans, investment analysis, capital budgeting. Positive or negative signs associated with the present value of a monetary sum when we are solving for future value. Negative sign indicates that at present this amount is flowing out to know the future value of the project. For example; PV -500 N 60 I/YR 1.00% PMT 0 FV $908.35 In this case negative present value indicates...
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...rather have a Chevy Truck than a Ford” and “The general motors cars are more dependable than Ford.” These comments made it clear that I liked the General Motors auto line of cars. Then, I asked myself what would be a cooperate company just as enormous. I came to a conclusion that Ford would be the other company. Though Ford has a nice line of cars, I had some negative thoughts about the company. Acronyms were said such as, “Found On Road Dead” or “Fix Or Repair Daily.” Each of those sayings had put a dent in my thoughts that I would not buy a Ford, not solely on those sayings, but also because of the influence of my parents and other such adverse publicity. These companies have a long-standing tradition in the U.S as manufacturing giants in the automobile industry, since they began here. With these two cooperategiants, I can evaluate and compare both companies financially. My over all preference. was to buy the General Motors line of cars; in doing this project I wanted to know if by researching each company if I would change my mind. Also, this will enable me to draw a conclusion on which company would be a better investment and which company is doing better as a whole. GM History: Founded in 1908, GM today sells its vehicles in about 200 countries. The company has manufacturing operations in more than 30 countries. General Motors (NYSE: GM), the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide. In 2000, GM earned $5 billion on sales of...
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...Ford and GM serious issues pre, during and post TARP period Keller Graduate School of Management Ford and GM serious issues pre, during and post TARP period Annotated Bibliography Burrows, Dan (2014) Stock Showdown: Ford vs. GM stock. Retrieved September 9, 2014 http://investorplace.com/2014/07/ford-stock-gm-stock-earnings-recall/ Ford and General Motors earnings show strong businesses but stocks are not equal as investments. The two companies have different risk profiles and prospects. Flint, Jerry. Forbes. 3/1/2010, Could Ford overtake GM? Vol. 185 Issue 3, p34-34. 1p. Written to show the comparisons of the two companies. These two companies are extremely different yet have many similarities that are detailed. Ford vs. GM: Who’s the Best in Detroit? (2010). Market Beat Retrieved from http://blogs.wsj.com/marketbeat/2010/12/22/ford-vs-gm-whos-the-best-in-detroit-analyst-asks/ Compares Ford and GM across eight different categories.GM is given the advantage in the market share in developing markets. Hoffman, Bryce G. (2013). American Icon: Alan Mulally and the Fight to Save Ford Motor Company. Ford was under the leadership of CEO Alan Mulally and they had an epic turnaround. Congress offered all three Detroit automakers a bailout. Ingrassia, Paul (2012) Engines of Change: A History of the American Dream in Fifteen Cars. Simon & Schuster. Provides details on how cars have...
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...America Equity Research 22 September 2014 US Automakers See Attractively Deep Value in GM As We Roll Out 2016 Estimates for US Automakers; Like Ford; Cautious on TSLA We introduce our 2016 estimates and roll-forward valuation for GM and Ford, finding +50% upside in the case of General Motors and +32% in the case of Ford. Our established 2015 price targets increase on newly considered 2016 earnings rather than 2015 in our valuation analysis and on capital structure roll-forward as the firms generate sizable cash flow. 2016 earnings are expected to rise relative to 2015, on industry tailwinds (continued trend toward more normal volumes in Europe, cycling past a period of atypically strong macro headwinds in South America, robust growth in China, and continued cyclical increase in North America even if at a lesser rate) as well as various different self-help initiatives (e.g., as restructurings in Europe, Australia, and elsewhere take further hold, and on cost control efforts in North America). We reiterate our Overweight ratings on both GM and Ford, seeing more value in automaker stocks than in supplier stocks generally, on earnings that are growing almost as quickly as the average supplier over our newly extended forecast window (and at least as structurally improved relative to history) but valuation which is only in line with historical average (Ford) or even significantly below (GM). We are more cautious on Tesla, however, with our Neutral rating balancing incremental news...
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...reported to be $190 billion. The increase from 2011 to 2012 was mirrored by 21% increase in cost of goods sold, moving from $125 to $152 billion. These figures have remained steady since that jump, at $156 billion today. Volkswagen’s total revenue was significantly higher than Ford’s and GM’s for the most-recent fiscal year. At $144 billion and $155 billion, respectively, VW’s total revenue is 40% ‒ 50% higher for 2014, at $217 billion. The cost of goods for GM was closer to VW’s, at $142 billion vs. $156 billion, which proved very interesting. This results in a gross profit for VW that is almost three times as high as that of GM ($36 billion vs. $13 billion). Operating expenses for VW were significantly higher than Ford and GM and totaled more than the two American companies combined. Income tax expense is another significant difference. For the most-recent period, VW’s income tax expense was $3.3 billion, and a total of $11.7 billion for the combined four-year period. Due to lower sales and other factors, both Ford and GM had significant negative income tax expenses within the same period. For the period 2011 to 2014, Ford’s income tax expense was ‒$8.5 billion. Comparatively, GM’s was ‒$32.5 billion. Overall, VW’s bottom line has fluctuated significantly since 2011. Over the four...
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...Ford vs Dell Executive Summary FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results. In order to stay competitive and become efficient again, FORD needs to re-evaluate their current supply chain and implement key portions of DELLs vertically integrated supply chain model. A proper implementation will increase information flow between suppliers, departments and dealers resulting in a reduction of redundant inventory and focus towards just in time inventory. All of these factors will further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system. Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network also...
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...Ford: Ride the Mustang Christian D. Smithson Florida State College at Jacksonville Author Note Smitcd42@students.fscj.edu Abstract Ford has been one of the most popular car manufacturers in the world for over 100 years. In this report we will dive deep in to the roots of the Ford Motor company and analyze the overall health of the company over the past 15 years. We will study how the financial crisis of 2008 impacted Ford and how they managed to make it through. Ford pioneered many of the techniques other car manufacturers use to make cars today lending to their great success. If it wasn’t for Ford the automotive industry would probably be very different today. Ford: Ride the Mustang On June 16, 1903 the Ford Motor Company gets incorporated. With only twelve investors owning 1,000 shares and empire is born. At 9:30 in the morning on this day, June 16, 1903, Henry Ford and other prospective stockholders in the Ford Motor Company meet in Detroit to sign the official paperwork required to create a new corporation. Twelve stockholders were listed on the forms, which were signed, notarized and sent to the office of Michigan’s secretary of state. Henry Ford (255 shares), Alexander Y. Malcomson (255 shares), John S. Gray (105 shares), John W. Anderson (50 shares), Horace Rackham (50 shares), Horace E. Dodge (50 shares), John F. Dodge (50 shares), Chrles T. Bennett (50 shares), Vernon C. Fry (50 shares), Albert Strelow (50 shares)...
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...Introduction The first factory assembled pickup truck introduced to America was based on a Ford Model T car. Although automobiles had been around for decades there was something unique about Henry Ford’s Model T vehicles. Other automobiles were considered as luxury vehicles because they were expensive to the average working American. In 1908 Henry Ford changed that by assembling affordable vehicles which caused Ford Motors to become popular in the mass market. Debuting in 1925 the Ford Model T Runabout sold for only $281 US dollars. Henry Ford built 34,000 models the first year which featured a cargo box, adjustable tailgate, four stake pockets and heavy duty rear springs. Which much popularity came other competitors like Louis Chevrolet who at the time was a Co-Founder to Chevrolet Motor Car Company and later merged with General Motors. Louis had a vision to become the leading brand for selling mainstream vehicles. Chevrolet’s goal for getting there was to overtake Henry Ford’s Model T. Louis competitive spirit led to decades of automobile manufactures competing to create the bestselling vehicles in the United States. In this paper you’ll discover the promotional strategies used by both companies to sell the 2014 Ford F-150 and 2014 Silverado 1500. Marketing recommendations will be made for Ford and Chevrolet to differentiate themselves in the marketplace in order to gain advantage over their competitors. You’ll find ways for both companies to assist with consumer...
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...Finance Final Project General Motors Company vs Ford Motor Company Lauren Grippo GENERAL MOTORS CORPORATION (COMPANY) General Motors Corporation (General Motors or GM) was incorporated on August 11, 2009. Also known as GM, the company designs, builds and sells cars, trucks and automobiles parts globally and headquartered in Detroit, Michigan. The company also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial). The company designs, manufactures and markets vehicles under the brands of Buick, Cadillac, Chevrolet and GMC. Along with our strategic partners, we produce cars and trucks, and sell and service our vehicles, through the following brands: Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling (GM.com). In addition to the products the company also sells to its dealers for consumer retail sales, to fleet customers, including daily rental car companies, commercial and leasing companies and governments. As of December 31, 2012, the Company offered 21 FlexFuel vehicles in the United States and offered 12 hybrid models and continues to develop plug-in hybrid electric vehicle technology. They are also subsidiary owners of the OnStar, LLC servicing the United States and Canada. OnStar is a provider of connected safety, security and mobility solutions and advanced information technology. FORD MOTOR COMPANY The Ford Motor Company (also known as Ford) is an American multinational automaker...
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...Boiled Frog Phenomenon Irma E. Jimenez American Intercontinental University MGT 680 – Strategic Management August 30, 2013 Abstract The “boiled frog” phenomenon will be explained and how it relates to strategic management. An example of a business or businesses undergoing a similar situation will also be given and how could they have avoided the effects of the “boiled frog” phenomenon. Boiled Frog Phenomenon The purpose of this paper is to elaborate about the term "boiled frog" phenomenon which is a story about a live frog placed in a large pot filled with cold water. The experiment done with the live frog is also meant to compare it and how this story relates to strategic management in the business environment. An example in regards to a firm that has undergone a similar situation will be given as well and, how that business could have avoided the effects of the “boiled frog” phenomenon. A few questions will follow to explain the process. What is the "boiled frog" phenomenon? According to the article by Polynice, when a frog is placed inside a pot of boiling water, on top of a stove, the frog will react very fast and will jump out of the water immediately. But, if the same frog is placed inside a large pot filled with cold water and then put on top of the stove and it is turned on to be heated up slowly, the frog will not notice the change of temperature (Polynice, 2007). Eventually, the frog felt unconscious...
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...Introduction The first factory assembled pickup truck introduced to America was based on a Ford Model T car. Although automobiles had been around for decades there was something unique about Henry Ford’s Model T vehicles. Other automobiles were considered as luxury vehicles because they were expensive to the average working American. In 1908 Henry Ford changed that by assembling affordable vehicles which caused Ford Motors to become popular in the mass market. Debuting in 1925 the Ford Model T Runabout sold for only $281 US dollars. Henry Ford built 34,000 models the first year which featured a cargo box, adjustable tailgate, four stake pockets and heavy duty rear springs. Which much popularity came other competitors like Louis Chevrolet who at the time was a Co-Founder to Chevrolet Motor Car Company and later merged with General Motors. Louis had a vision to become the leading brand for selling mainstream vehicles. Chevrolet’s goal for getting there was to overtake Henry Ford’s Model T. Louis competitive spirit led to decades of automobile manufactures competing to create the bestselling vehicles in the United States. In this paper you’ll discover the promotional strategies used by both companies to sell the 2014 Ford F-150 and 2014 Silverado 1500. Marketing recommendations will be made for Ford and Chevrolet to differentiate themselves in the marketplace in order to gain advantage over their competitors. You’ll find ways for both companies to assist with consumer...
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...Transcript * 1. TOYOTA MOTOR MANUFACTURING INC. U.S.A Prepared By – Ashwin Mehta – 313 Pratik Mehta – 314 Ishaan Parekh – 315 Ankit shah – 317 Dishank Shah – 318 Fenil Shah - 319 * 2. Agenda Current Scenario Problems Faced Analysis Suggestions and recommendations Risks and contingencies * 3. Current Scenario • Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply. • Kentucky Framed Seat (KFS), is a single seat supplier for TMM. • KFS is responsible for the material flaws and missing parts as the major encountered defects. • These problems are increasingly occurring with an increase in varieties and demand for the seats. * 4. Problems Faced • Product proliferation problems with defective seats. • Company’s deviation from its normal production plan and lack of a recovery system. • Run ratio dropped from 95% to 85%. • This means 45 less cars were being produced per shift. • This translated in overtime of workers. • Too many cars needed off-line operations of one type or the another before they could go on shipping. * 5. Questions Raised • Will the sales company get cars on time as promised? • What does it mean to implement JIT and Jidoka principles to this situation? • Is TMM handling seat defects correctly on the line? • Is the current routine for handling seat-defect cars really a legitimate exception to TPS, or could it be a dangerous deviation from TPS? • Is there a way to kaizen TMM’s off-line routine? * 6. Analysis...
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...truck market consisted of approximately 4 million units sold out of 14 million total vehicle sales in the United States. By 1999, the percentage of the total market had increased and total sales were higher. SUVs/light truck sales were 8.2 million of 16.4 million units sold.21 47.6 percent of Ford Motor Company's sales are of SUVs, primarily its Ford Explorer and larger Expedition, but also of its even larger Excursion. These vehicles took the place of the truck-like Bronco and smaller Bronco II. The largest players in the SUV market (with the number of units sold in 2000) are as follows: 22 [pic] In 1997, most auto manufacturers expanded their SUV offerings and entered the luxury SUV market. These SUVs, with prices around $50,000, featured in-vehicle televisions and VCRs, leather interiors, and all the amenities of luxury cars. The new market entrants are listed below: [pic] By 2000, the U.S. segment of the luxury SUV market was 80.5 percent.23 At that time, SUV purchases constituted one of every five auto sales in the United States and were the highest-margin products in all the automakers' lineups .24 Profits per SUV averaged $ 10,000 per unit. Profits on the Ford Excursion were at the top of the field at $18,000 per unit. At that time, SUVs comprised 20 percent of all of Ford's vehicle sales and accounted for the majority of Ford's profits.25 By the summer of 2001, there were some indications of a slowdown in the SUV market. Many attributed the decrease...
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...| The Cyclical Rise and Fall of GM | | | | | This paper will touch on the history of GM dating back to 1899 with a history of boom and bust all the way up to the collapse, the rebirth of GM in 2009 and subsequent successful years since. | Recently in the news there has been an alarming fact about General Motors automobile products that have caused a loss of property and more importantly loss of lives, while most admit a simple design flaw could’ve been repaired with a $0.57 switch (foxnews.com, 2014, 1 Apr). This paper will touch on the history of GM dating back to 1899 with a history of a boom and bust cycle all the way up to the collapse, the rebirth of GM in 2009 and subsequent successful years since. The History of General Motors Corporation, the one-time “largest automaker in the world” had its start in 1899. At that time over one thousand companies attempted to improve the “horse drawn carriage” to that of an automobile and failed. William Crapo Durant was in the horse carriage business in Flint Michigan since 1886, selling over 75,000 in 1895. In 1904 Durant bought into the Buick Motor company where many other auto makers had operations in Flint, MI; Chrysler, Buick, Nash to name a few. The economic downturn of 1907 bankrupted many of the smaller auto manufacturers and to protect the company, Durant sought out Henry Ford and Ransom Olds to discuss a possible merger. Both declined due to Durant’s lack of capital (Durant, 2004, p 71-73). Durant, instead...
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