Ford Vs GM

I have chosen to research Ford and GM because they both experienced serious issues during the pre, during and post TARP period which caused them to restructure and change how they do business. Each company reacted to these pressures differently. My paper will compare and contrast the way both companies reacted to these pressures.

The wall street journal published an article that focused on UBS auto analyst Colin Langans study which compares Ford and GM across eight different categories: 1) financial leverage and ownership; 2) valuation; 3) U.S. market share; 4) product mix; 5) incentive trends; 6) [emerging market] exposure; 7) global EBIT margins; and 8) structural costs (Phillips, 2010). This study revealed that

Ford has done a culture change as well as an organizational change, which helped them get through the crisis of this economy and not have to file for bankruptcy like GM. Ford has CEO Alan Mulally to thank for not filing for bankruptcy like its competitors because of his willingness to change the culture at Ford from a notorious snake pit to a more collaborative environment. That culture change, which Mulally labeled, "One Ford," helped Ford navigate through the economic crisis of the last few years (Muller, 2012).

Ford Motor Company has gone through several phases, although its general vision and character have always been the same. The first was a relentless attempt to decrease manufacturing costs and design costs, sometimes with good methods and sometimes with bad. The second phase was to manufacture where the customers are worldwide. The next phase basically involved styling and feature innovation-cruise control, air conditioning systems, power steering, tail fins, and the like. At the same time, Ford organized what was called a technical excellence committee, in which the chief technical people around the company -not necessarily the top managers, by the way-assessed the position of the company in terms of the development of people, recruiting (National Research, 1995).

General Motors had similar opportunities to make strategic changes but remained stuck in their approaches and strategy, which ultimately lead to General Motors filing for bankruptcy, and having to ask the US government for loans in order to restart business. The "new" GM is now owned mostly by the governments of the United States and Canada and the United Autoworkers' Pension Trust; essentially GM is a division of the US Department of the Treasury and being run by a government appointee.

"Ford Motor Company, a global automotive industry leader bases in Dearborn, Michigan, manufactures or distributes automobiles across six continents. With about 164,000 employees and about 70 plants worldwide, the company's automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company." (Ford Motor Corporation, 2010, p. 1) "The new General Motors has one clear vision: to design, build and sell the world's best vehicles. Our new business model revolves around this vision, focusing on fewer brands, compelling vehicle design, innovative technology, and improved manufacturing productivity and streamlined, more efficient inventory processes. The end result is products that delight customers and generate higher volumes and margins - and ultimately deliver more cash to invest in our future vehicles." (General Motors Corporation, 2010, p. 6).

Both companies are similar in most ways because they are both in the automobile industry, both faced the economic crisis, and both have restructured their organizations. While they are very similar, they are also very different from one another. Ford managed to get through the economic crisis, while GM had to file bankruptcy, also Ford family is has ultimate control, while GM has investors. Even though both companies have endured their share of trials and tribulations, they both are back on track.

References

Ford Motor Company. (2010). 2010 Annual Report. Dearborn: Ford Motor Company.

Ford Motor Company. (2011). Retrieved March 12, 2013, from Ford Motor Company: http://corporate.ford.com/our-company/our-company-news/our-company-news-detail/one- fordFord Motor Company.

General Motors Corporation. (2009). 2009-2014 Restructuring Plan. Detroit: General Motors Company.

Muller, J. (2012, September 11). Ford preparing for life after mulally. Forbes. Retrieved from http://www.forbes.com/sites/joannmuller/2012/09/11/ford-preparing-for-life-after-mulally/

National Research, C. (1995). Research restructuring and assessment: Can we apply the corporate experience to government agencies?. Washington, D.C: National Academy Press.

Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change; a mulitple perspectives approach. New York, NY: McGraw-Hill Companies.

Phillips, M. (2010, December 22). Ford vs gm: Who's the best in detroit?, analyst asks. Wall Street Journal. Retrieved from http://blogs.wsj.com/marketbeat/2010/12/22/ford-vs-gm-whos-the-best-in-detroit-analyst-asks/

The U.S. Auto Industry in 2012. Retrieved March 14, 2013, from Bloomberg Business week:http://www.businessweek.com/lifestyle/content/jun2009/bw20090623_802671.htm