Ford Motor Company Free Essay Example, 750 words

Business Questions Ford Motor Company Ford Motor Company is relatively the fourth largest automotive manufacturer in terms of production capacity. The company sells vehicles under Ford and Lincoln brands. Ford’s domestic sales have been low and stagnant for quite some time, in comparison to its European operations that has increased by producing many quality acclaimed vehicles. The reason behind difference between domestic and international operations is expensive manufacturing facilities caused by â€Å"high wages and expensive health care and retirement obligations for Union Labor† (Corporate Ford, pp. 10-67). In 2008, the health care expenses for US employee and retirees were $1.3 billion and around $500 million for post retirement health care and the balance for active employee health care and other retiree (Corporate Ford, pp. 10-67). The excess capacity and introduction of new products in the key segments have pressurized the manufacturers to increase prices of their products. â€Å"The incremental new US manufacturing capacity of Japanese and Korean manufacturers have contributed, it is likely to continue pressure in US markets to increase prices† (Corporate Ford, pp. 10-67). Currency Exchange Rate Volatility can be a reason to be considering as we have witnessed that US dollar has strengthened against Euro and significantly against British pound, but weaken against Japanese Yen. We will write a custom essay sample on Ford Motor Company or any topic specifically for you Only $17.96 $11.86/pageorder now Other economic factors like increase in commodity and energy prices are also influential. In the United States, decline in residential construction spending have started since, it was 21% down in 2008 after 18% decline in prior year. This trend has two basic affect on sales and revenue directly through its unfavorable effect on GDP growth and as a contributing factor in soft demand for truck sales. Both of these factors lead to lower the light vehicles sales in United States. The financial analysis of Ford North America shows that fixed assets impairment charges has increased in 2008 as compared to 2006 and 2007 (Ford Motor Company, pp 1-6). Personnel – reduction programs, accelerated depreciation on leased facility, US dealer consolidation, supplier settlement, pension curtailment charges, variable marketing, US plant idling, job security benefits, and retirement benefits have been introduced in 2008, which has increased the deficit and resu lts in low profitability (Ford Motor Company, pp 1-6). Union Carbide In the wake of industrialization a devastated event occurred in December 1984 that is consider the worst chemical incident due to the leakage of methyl isocynate (MIC) gas in the plant of the Union Carbide India Limited (UCIL) killing approximately 3,800 people (ICFTU, pp. 15- 25) in a sweep and several thousands injured with partial or permanent disabilities. The studies showed that the gas evolved in a cloud with the cold breeze and caught the local residents, suffocating them with coughs, choking, and irritation eventually resulting in massive death tolls. UCIL launched a thorough investigation with the consent of the local and federal government of India and another independent review by experts of Arther D. Little (ICFTU, pp. 15- 25) that both indicated the same conclusion. The evidence from the effected site showed entrance of a massive amount of water in the tank containing the batch of methyl isocynate that created an impulsive reaction with the heat and pressure, which eve ntually resulted in a lethal gas that invaded the whole plant and the residential areas. The independent review also indicated that the tragedy occurred due to the deliberate action of a skilled employee who introduced the water in the tank as the plant was certified with all the safety systems working at the time of accident that clearly draw the line towards the weakness in UCIL organizational hierarchy and strategically decisions (Browning, pp. 1-15). UCIL have 50% stakes in the plant and the remaining by the Union Carbide Corporation. The company’s CEO was under arrest on arrival to India along with the other five senior Indian executives (ICFTU, pp. 15- 25). There were serious corporate criminal charges of negligence against them and due to lack of communication of reporting lines to the senior executives of the UCIL, the situation worsen as they were not aware of the exact cause of tragedy. The victims of the tragedy lack safety procedures and demonstrated that the Indian Government (Browning, pp. 1-15) should handle the crises management and medical relief that refrained towards the UCIL negligence resulting in arrest of the top management. The plant manufactures its own main ingredients, which is a highly toxic and unstable gas. Many events are indirectly link with the management infrastructure and its strategies such as in early 1984 there was a cut back in employees and restructuring, which resulted in lack of mor ale and confidence in the senior management’s loyalty. There was a cleaning scheduled on the same day of the plant and due to lack of monitoring and reporting; the deliberate negligence was countercheck when the metal barriers were not insert for protection against the water entering the MIC tank. It later on intensified with deliberate increase of water in the tank (ICFTU, pp. 15- 25). The lack of documented reporting and the ethical negligence on the part of the plant maintenance staff is a serious factor in this case, which needs to be consider. The senior management did not know the ignorance of the causes of the hazard, which is a flaw in the reporting line and delegation of duties to the lower management. There was a lack of crisis management and safety computer checks to unveil the tragedy though the plant was making a perilous component and such safety measures should be in place when operating by a surrounding of urban population (ICFTU, pp. 15- 25). Work Cited Browning, B. Jackson. †Union Carbide: Disaster at Bhopal. † Jackson Browning Report. Union Carbide Corp, 1993. Retrieved on August 22, 2011: http: //www. bhopal. com/~/media/Files/Bhopal/browning. pdf Corporate Ford. Ford Motor Company 2008 Annual Report. Ford, 2008. Retrieved on August 22, 2011: http: //corporate. ford. com/doc/2008_annual_report. pdf Ford Motor Company. Stock: Ford Motor Company (F), 2010. Retrieved on August 22, 2011: http: //www. wikinvest. com/stock/Ford_Motor_Company_(F) ICFTU. The Trade Union Report on Bhopal. International Confederation of Free Trade Unions. Geneva, 1985.