Ford

Ford Motor Company

Ford Motor Company: What Would You Do?

April 29, 2011

Ford Motor Company: What Would You Do?

This case outlines 4 strategic options Ford is pursuing to increase its profitability. Describe each of the four options. For each option list 2 criteria you would use to evaluate the option.

The first option is to close down older plants in an effort to realign production and sales. This may sound like the perfect option but really, it’s a lot more costly than you would think. Because most of the auto workers in the plants are represented by the United Auto Workers (UAW), they are very protected. It would cost an enormous amount of money for Ford to buy out the workers. Not to mention the cost of shutting down the plant itself. The facility would have to be secured after all the equipment was moved to a new facility. All of which is quite costly. The political and social implication of shutting down a plant and putting thousands of people out of work could cost Ford a lot of customers. Ford has always been a company for the people, by the people. It wouldn’t look very good to be letting go of thousands of American workers. If the market improves, Ford is down production capabilities because it shut down some of its older plants and now they can’t meet the demand of consumers.

A second option would be to do away with Ford’s SUV and truck divisions. While sales may be down in the area due to the gas prices, there is still a need for this type of vehicle. Ford trucks are a symbol of American pride and have several uses. Perhaps scaling down on the production of the larger vehicles or producing by special order would be a solution.

The third option is to dramatically scale down Ford’s focus on the U.S. market and concentrate on foreign markets that Ford does very well in. Ford runs the risk of losing customers if they choose this option. Everyone associates Ford with America. If Ford focuses on markets outside of America, many Americans may think...