Using the triangular bargaining dynamic

Ford Motor Company was founded by Henry Ford in 1903 and from there has emerged as America’s leading car maker. Ford also makes many other automobiles including trucks. The Subsidiaries of the company also operate in auto financing, thus having two sectors, Automotive and Financial Services. The Automotive segment refers to the operations of Ford at North America, and South America, Europe, Africa, Asia and the administration of Volvo. The Financial services are under the banner of the ‘Ford Motor Credit Company and Other Financial Services.’ (“Ford Motor Company NYSE; Cyclical Consumer Goods & Services/Auto & Truck Manufacturers,” 2011) Some of the success that the company achieves now is rooted to its basic creation and maintenance of the best known production method and constantly updating the method. The famous Ford Assembly line stands the company in good stead although there have been a lot of labor and competitive issues with the method. It has been adopted by all automotive manufacturers at large.

Assembly Line

Mass production’ is a method that was developed by the company and the method has basically remained unchanged over the decade, while “Ford’s original industrial gradually evolved into a set of organizational canons” for the entire automobile industry. (Freyssenet; Mair; Shimizu; Volpato, 1998) Other industries also adapted the Ford industrial model. The model has been proved to be the most successful one because of its large use in the Second World War. During the war, mass production and assembly that Ford created made the company able to produce over a million plane parts and during the war Ford was turning out 540 planes a month, one being assembled every hour. Other things the company produced during the war included military trucks, Bren gun carriers, V-12 engines for airplanes and accessories. Further it can be seen that “From 1942 to 1945, Ford Motor Company concentrated on the B-24 Liberator bomber. By the war’s end, Ford Motor Company had built more than 8,600 B-24s. Henry’s son, Edsel Ford, and Charles Sorensen, head of production for Ford Motor Company, headed the project. At its peak, the Willow Run facility was staffed by nearly 50,000 workers.” (Ford Motor Company, 2011b)

One of the chief elements that was thought to be behind the success of Ford is the Assembly line but the situation having changed from the last century, today the Ford multinational has the new power in its bargaining dynamics that always outmaneuvers its rival General Motors’s is by using the triangular bargaining dynamic. Of late Ford’s international operations has become the source of the company’s competitive strategy. However the basis of the competitiveness still remains the assembly line or mass production. Ford is efficiently producing automobiles based on the mass production method it invented a century ago. (Studer-Noguez, 2002)

But there was also problems, and these related to labor and the labor problems were chaotic the one saving factor was that the factory managers and engineers, were quick to find the human problems that came with the assembly plants and solve it just as they would the technical problems but in the middle of the last era the paternalism failed. The control of workers which was the key part to the automation process was not achieved and there were over the years a lot of experiments with the Ford labor policies. For example, when the huge demand for the car – Model T. Ford came about the industrial practice was changed to the system of mass production. This lost the craft traditions, independent work groups, and trade union apprenticeship systems; all had been dismantled and were lost. Likewise the administrative controls were also experimented with and the gradual culture built over the years on this system is still the heritage and core of Ford Motors. (Meyer, 1981)

The company has also been very quick to learn from rivals and adapt to the production methods the beneficial methods of the rivals. Thus the unique methods of production of the Japanese car maker Toyota and the Toyota way are not lost on Ford. Some modern methods that Ford has incorporated and often taken from other rivals include lean production methods that have been studied from Japanese car makers. Thus changes were made to the assembly plants even using Kaisen. (Klier; Rubenstein, 2008) Therefore the processes of management at Ford are evolving and ever youthful. Through the years the company has withered many storms and has many achievements to its credit.

Ford through the Years

The greater competition in the U.S. And the global market also came from outside, from Japan — Toyota and now Honda. Earlier the U.S. big companies- Ford, GM and American Motors failed to compete effectively with Toyota. The arrival of the overseas competitors was a challenge to not only Ford but to all other companies. The challenge as noted above was not only to the production processes but also to the competitiveness and market share. All the U.S. companies imitated and incorporated the Japanese practices that have produced better results and this is still the norm in the industry. However the reserves of the knowledge of Ford through the years are an experience that has possible problem-solutions which cannot be underestimated. (Freyssenet; Mair; Shimizu; Volpato, 1998) The company that is over a century old continued with the management policies and modified the same when need arose. For example during and after the 1973 oil shock Ford had to change its competitive strategies. One was the problem of rampant inflation, balance of payments problems and poor sale of vehicles, and some regulations in the United States created hurdles in the way of Ford’s choices. (Studer-Noguez, 2002)

Therefore there came the need to go multinational and there were more competitive advantages that could be found in foreign operations, at Europe and Canada, which would offset the problem at the American market. It is thus that Ford ventured out and was partly successful. That the company is able to make its presence felt in all countries is ample proof of the fact. The current scenario shows an international company that shows signs of beating Toyota at the market.

The Present

In 2010 it surpassed Toyota to become the second market leader. Its growth for 2010 was fifteen percent and from the time the company made changes from 1993 after which the Fusion – a Ford sedan made a record by selling two hundred thousand units ever since 2004 after its launch. It over took General Motors in 2010 and this is the current greatest achievement. The truth is that Ford’s current strength stems from the capital funding it got back in 2006 to the tune of $23.6 billion, which surplus funds made the company able to move and innovate faster than the rivals General Motors and thus bring about more fuel-efficient vehicles and immunities from the fortunes of the declining car market that tanked in 2008. (“Ford Motor Company NYSE; Cyclical Consumer Goods & Services/Auto & Truck Manufacturers,” 2011)

Ford was able to get over the depression on account of that and the shift in strategy to focus on its core brands while selling of its luxury brand like Jaguar and Land Rover to the Tata Group of India for $2.3 billion in 2009 made the company financially stable during the depression. By selling off some of the units, like in March 2011, the Company announced the sale of the Norfolk Assembly Plant property to Atlanta-based Jacoby Development, Inc. The company stabilized its home factories. The company in March 2010 sold its Volvo subsidiary to a Chinese conglomerate. The company earned $6.6 billion in 2010, with the possibility of a lengthy turn around. (“Ford Motor Company NYSE; Cyclical Consumer Goods & Services/Auto & Truck Manufacturers,” 2011)

Now in keeping with the times Ford is going green. The new electrified like C-MAX Energi plug-in hybrid and Fusion Hybrid Ford will debut in China and this is to ensure top fuel efficiency and Ford now has an aggressive electrified vehicle plan for China and this will be shown at the Hybrid at Auto Shanghai 2011 and like wise the “The zero-emissions, fuel-free Focus Electric is Ford’s first all-electric passenger car while the C-MAX Energi leverages Ford’s innovative power split architecture. The Fusion Hybrid combines the best attributes of the petrol engine and electric battery-driven motors.” (Ford Motor Company, 2011a) Of late the Fusion Hybrid won the 2010 MOTOR TREND Car of the Year award. (Ford Motor Company, 2011a)

Conclusion

The Ford Motor Company has come a very long way from 1903 and is not only a car and vehicle maker but also is into the Financial services. What has stood the test of time and given the company the solidity that made it thrive during the depression is the Ford Assembly line and mass production along with the absorption by the company of rival industrial models when found suitable and incorporating it to its own working process. Ford’s international operations have become the source of the company’s competitive strategy. Today it is on the verge of beating Toyota to become the market leader.

References

Ford Motor Company. (2011a) “Ford’s Electrified Vehicle Portfolio Brings Expanded Choice

Way-Trajectories and Industrial Models of the World’s Automobile Producers.” Oxford University Press: Oxford.

Klier, Thomas; Rubenstein, James. (2008) “Who Really Made Your Car? Restructuring and Geographic Change in the Auto Industry.” W.E. Upjohn Institute for Employment Research: Kalamazoo, MI.

Meyer, Stephen. (1981) “The Five Dollar Day: Labor Management and Social Control in the Ford Motor Company, 1908-1921.” State University of New York Press: Albany, NY.

N.A. (2011) “Ford Motor Company NYSE; Cyclical Consumer Goods & Services/Auto & Truck Manufacturers” New York Times,

http://topics.nytimes.com/top/news/business/companies/ford_motor_company/index.html

Studer-Noguez, Isabel. (2002) “Ford and the Global Strategies of Multinationals: The North

American Auto Industry.” Routledge: London.

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