From the article we were assigned to read, we can see that the Ford Motor Company has been experiencing a fall in profits, because of weak sales which have been attributed to tumbling stock prices since 1999, as a result of the change of the company's management and its policies. The writer blamed this downfall on bad management decisions made both by Mr. Jacques Nasser CEO of the company and Mr. Bill Ford its chairman and the ensuing relationship, agendas and breakdown of communication between these two.
In the article we are told that Manufacturing quality and productivity have slipped as have launched dates for new models of its vehicles, which contributed significantly to drop in sales. To counteract this fall Ford under took a massive spending budget on marketing incentives
to lure new customers and to prevent old customers from defecting to other competitors. Apparently this approach did not work because Ford lost money in the second quarter of 2001 and expects to post a third quarter loss even though US auto sales are headed for the third best year ever in auto sales.
A major reason for this can be blamed on production inefficiency at Ford's production plants where the cost per value of its cars have risen to $1000 at a time when the automobile market is so competitive that they cannot afford to raise there prices to combat these costs. This in turn led to fall in profits in both its overseas operations in Latin America and Europe and its operations in the US. Management therefore decided to undergo a plan of cost cutting, restructuring and downsizing its overall operations, which led to 5000 white-collar workers being laid off. This leads to low employee morale because jobs within the organization were no longer secured. Investor morale was also affected when Mr. Nasser announced that the company dividends were cut by 50%. He also announced that there were not going to be any executive bonuses in 2001, whic...
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