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Writing Assignment: Financial Analysis

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Submitted By Mison47
Words 3215
Pages 13
Margaret Ison
Ron Lentz, CPA, PhD
Financial Management
September 8, 2012

Henry Ford incorporated Ford Motor Company in 1903 at Dearborn, Michigan, USA and is known to have adapted practices that were not popular in those days. The Car Maker is known for their famous “Model T” and the unique innovation of interchangeable parts in moving assembly lines that makes it possible to assemble cars at low cost and high reliability. Ford Motor established an impressive financial track record almost throughout the 20th Century (barring the record loss of $7 billion in 1992) till the Millennium started (Alan Mullally, 2012). Ford motor Company is the second largest automobile company in the world representing a $164 billion multinational empire. Ford is primarily known as a manufacturer of cars and trucks but also operates Ford Motor Credit Company which generates over 3 billion in revenues. Ford also owns The Hertz Corporation which is the largest car rental company in the world. Ford has vehicles under the name of Ford, Lincoln, Mercury, Jaguar, Volvo, Land Rover, Aston Martin, and has a controlling interest in Mazda Motor Corporation.
Ford Motor Company incurred a financial loss of about 5.45 billion dollars in 2001 and never really recovered confidently after this slump. It is said that the Ford 2000 initiative of Lord Alex Trotman was the primary reason for financial downturn of Ford Motor Company. The failure of Lord Trotman’s Ford 2000 strategy was primarily due to the vision of centralized management that resulted in narrow viewpoints and too much of Americanization thus resulting in ignorance of the local factors of the Global Markets. As a result, Ford badly lost market share to the competition (especially the Japanese and European companies) that otherwise had a much wiser approach. Probably,

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