Alan Mulally's Challenges at Ford Motor Company
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Case Code: BSTR263 Case Length: 16 Pages Period: 2006 - 2007 Pub Date: 2007 Teaching Note: Not Available |
Price: Rs.300 Organization: Ford Motor Company Industry: Automobile Countries: USA, World Themes: Turnaround |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Mulally Joins Ford Motors
When Bill Ford appointed Mulally to step into his shoes as the president and CEO of Ford Motors in September 2006, the company was in a state of crisis with a string of problems on the organizational and operational fronts. Bill Ford felt that the company's problems were so deep-rooted that an insider would find it extremely difficult to bring about a turnaround. He felt that the job required the "emotional detachment of an outsider" who could take some drastic measures to save the company. Bill Ford believed that Mulally was somebody "who knows how to shake the company to its foundations."...
Challenges at Ford Motors
For Mulally, the immediate challenge at Ford Motors was to stop the company bleeding. The company had posted a loss of US$ 12.7 billion for the year ended December 2006, the biggest ever loss in its history. The losses were further expected to continue in the year 2007. Ford Motors was expected to have just a 14% market share in 2008, compared with the nearly 25% it had enjoyed during the late 1990s. On the organizational front, Mulally had to make Ford Motors' employees snap out of their lethargic and bureaucratic style of functioning, while depending on these very same people to understand the company's business...
The Road Ahead
Ford Motors was expected to face a tough road ahead in 2007. Brian Johnson, an auto analyst with Lehman Brothers, had written, "Ford will suffer the most severe market share decline among the Big Three in 2007…We expect Ford's decade-long share loss to accelerate in 2007." There were also mixed opinions initially on whether Mulally could achieve a successful turnaround at Ford Motors and put the company back on the profit track by 2009. The cost-cutting moves going on and a slightly higher revenue helped Ford Motors post a much smaller loss of US$ 282 million in the first quarter of 2007 compared to a loss of US$ 1.4 billion for the same period in 2006....
Exhibits
Exhibit I: Ford Motors' 'Way Forward' Restructuring Plan
Exhibit II: Income Statement of Ford Motors
Exhibit III: Ford Motors' Share Price Movement
Exhibit IV: Popular Brands of Ford Motors
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