Brief description of the company Ford Company was founded by Henry ford in 1903.

At 40 years old Ford began making cars in a converted factory in 1903 with just $28,000 from a dozen investors. Two of these investors were John and Horace Dodge, who later went on to found their own car company. During 1903, the factory only produced a few cars each day by paying his workers $5 per day, more than the double going wage in the industry. His strategy paid off; by attracting the best and the brightest mechanics to his factory, reducing turnover. Ford Motor Company is an American automaker based in Dearborn, Michigan, manufactures and distributes across six continents (Africa, Europe, Americas, Asia, and Australia), the fifth largest automaker in the world based on his 2010 annual vehicles sales, the fifth automaker in Europe in 2010. Ford is the third-ranked automaker in the U.S., after GM and Toyota, the best selling automaker in Canada in 2010.

Ford brand previously include Volvo Corporation, Mercury, Ford and Lincoln but Volvo Corporation was sold and Mercury was discontinued and the company provides also financial services through Ford Motor Credit Company. Ford brand makes a variety type of cars such as trucks, small cars such as the Ford Focus while Lincoln brand does luxurious cars. Fords first major success was the Model T, introduced in 1908. The Model T was the first car to place the steering wheel on the left, which later became the standard for American vehicles. Henry Ford created a network of local dealerships that made the Model T almost omnipresent in most American cities. Ten years later, in 1918, 50% of all cars in American were Model Ts. Sales of the Model T eventually began to decline throughout the 1920s, as competition increased and Henry Ford refused to update the vehicles features. Ford had 198,000 employees and 90 plants in 2009 and 164,000 employees and about 70 plants worldwide, a 17% layoff of employees and a 22% close down of plants in 2010

Brief description of the Industry

The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue. Automotive industry are all those companies and activities involved in the manufacture of motor vehicles, including most components, such as engines and bodies, but excluding tires, batteries, and fuel. The industrys principal products are passenger automobiles and light trucks, including pickups, vans, and sport utility vehicles. Commercial vehicles i.e., delivery trucks and large transport trucks, often called semis. History

The origins of the automotive industry are rooted in the development of the gasoline engine in the 1860s and 70s, principally in France and Germany, even though steam-powered road vehicles were produced earlier. Later in the beginning of the 20th century France and Germany were joined by the Italians, British, and Americans. During the pre-World War I most automobile companies were small shops, hundreds of which each produced a few handmade cars. During the era of large scale production few of the handmade manufacturers survived and they all got the same characteristics such as Opel with his bicycle production and many others. Two companies such as Rolls-Royce in Britain and Ford in the United States were founded combining engineering talent and business skill.

In the United States almost all of the producers were assemblers who put together components and parts that were manufactured by separate firms. FORD AND THE ASSEMBLY LINE

The mass-produced automobile is generally and correctly attributed to Henry Ford, but he was not alone in seeing the possibilities in a mass market. . Ransom E. Olds made the first major bid for the mass market with a famous curved-dash Oldsmobile buggy in 1901. Ford, more successful in realizing his dream of a car for the great multitude, designed his car first and then considered the problem of producing it cheaply. The car was the so-called Model T, the best-

known motor vehicle in history. It was built to be durable for service on the rough American country roads of that period, economical to operate, and easy to maintain and repair. It was first put on the market in 1908, and more than 15 million were built before it was discontinued in 1927. In 1913 the Ford Motor Company displayed to the world the complete assembly-line mass production of motor vehicles consisting of a technique with two basic elements: a conveyor system and the limitation of each worker to a single repetitive task. Fords success inspired imitation and competition, but his primacy remained unchallenged until he lost it in the mid 1920s by refusing to recognize that the Model T had become outmoded. Appearance of mass production in the automotive industry coincided with the emergence of large-scale business organization, the two had originated independently. They were related, however, and influenced each other as the industry expanded. Only a large firm could make the heavy investment in plant and tooling that the assembly line required, and Ford was already the largest single American producer when it introduced the technique. The mass producer in turn enjoyed a cost advantage that tended to make it increasingly difficult for smaller competitors to survive. There have been exceptions, but the trend has been consistent.

GENERAL MOTORS General Motors Corporation (GM), which ultimately became the worlds largest automotive firm and the largest privately owned manufacturing enterprise in the world, was founded in 1908 by William C. Durant, a carriage manufacturer of Flint, Michigan. Durant developed the idea for a combination that would produce a variety of models and control its own parts producers. As initially formed, General Motors included four major vehicle manufacturers: Buick, Cadillac, Oldsmobile, and Oakland and an assortment of smaller firms. GM ran into financial trouble in 1910 and survived, brought Chevrolet company to GM in 1918 with the backing of DUPONT de NEMOURS and company

RISE OF THE BIG THREE At the end of World War I, Ford was the colossus, dominating the automotive scene with the Model T not only in the United States but also through branch plants throughout the world. British Ford was the largest single producer in the United Kingdom. GM was emerging as a

potential major competitor in the United States. No other automotive firms of comparable size existed. During the next decade there was a striking transformation. The depression of 1921 had farreaching effects on the American automotive industry. GM was plunged into

another financial crisis. Alfred P. Sloan became president of the corporation in 1923 and raised it to its unchallenged first place in the industry. Among other steps, he gave GM a staff-and-line organization with autonomous manufacturing divisions, which facilitated management of a large corporate structure and became the model for other major automotive combinations. Henry Ford also went through a crisis because the 1921 crash caught him involved in the construction of a large new plant (River Rouge) and in the process of buying out his stockholders. Ford weathered the storm (though many of his dealers, unable to sell cars and not permitted to return them, went out of business), but the Ford Motor Company had reached its crest. The third member of the Big Three automotive manufacturers in the United States was created at this same time. When the Maxwell Motor Company failed in the 1921 depression, Walter P. Chrysler, formerly of General Motors, was called in to reorganize it. It became the Chrysler Corporation in 1925 and grew to major proportions with the acquisition of the Dodge Brothers company in 1928. When Ford went out of production in 1927 to switch from the Model T to the Model A (a process that took 18 months), Chrysler was able to break into the lowpriced-car market with the Plymouth. The modern industry The modern automotive industry is huge. In the United States it is the largest single manufacturing enterprise in terms of total value of products, value added by manufacture, and number of wage earners employed. One of every six American businesses is dependent on the manufacture, distribution, servicing, or use of motor vehicles; sales and receipts of automotive firms represent more than one-fifth of the countrys wholesale business and more than one-fourth of its retail trade. For other countries these proportions are somewhat smaller, but Japan, South Korea, and the countries of Western Europe have been rapidly approaching the level in the US consolidation Diversity of products The automotive industrys immense resources in production facilities and technical and managerial skills have been devoted predominantly to the building of motor vehicles, but there

has been a consistent and strong incentive to extend into related products and occasionally into operations whose relationship to automobiles is remote. The Ford Motor Company, for example, once manufactured tractors and made the famous Ford Trimotor all-metal transport airplane in the late 1920s and early 30s. GM manufactured refrigerators and diesel-powered railway locomotives. By the end of the 20th century, however, Ford and GM had divested themselves of most of their nonautomotive operations and had spun off the majority of their automotive component-making divisions into separate stock companiesDelphi Automotive Systems in the case of General Motors and Visteon Automotive in the case of Ford. In Europe, but to a lesser extent, automakers also divested noncore operations, while depressed economic conditions in Japan forced auto companies there to begin divorcing themselves from nonautomotive and components companies in which they had long held interests. By the late 1990s the trend was toward more international consolidation of core automotive operations. New car development

SWOT ANALYSIS Due to SWOT analysis, a company can work well and can generate effective outcomes. Proper SWOT analysis is necessary for the betterment of a company. Therefore, SWOT analysis should be carried on regular basis in order to generate better outcomes. (Gundry & Kickul, Pg 401, 2007) Strengths It is the fifth large automaker in the world. Ford has good market share and rank fifth in Europe. Ford occupied third rank automaker in US and the best selling automaker in Canada in 2010. Ford rank number 2 in strategic vision. One of the best known brands in the world. Ford motors develop vehicles under several names. Manufacturing facilities in more than 30 countries. Ford motors sales better quality vehicles.

Good relations with employees by offering better work environment and competitive wages. Ford supports racing teams which include NASCAR, Formula One and etc Lincoln named top brand in 2011 Auto Pacific Vehicle Satisfaction awards. Sell vehicles across 6 continents. And sales increase in 2010 compared to 2009. In the U.S. Ford offer 14vehicles with segment leading fuel economy more than any other automaker.

Weaknesses Ford sold the Volvo Corporation and discontinued the Mercury Ford layoff employees from 198000 in 2009 to 164,000 in 2010 Ford closes down 22% of his production plants from 90 in 2009 to 70 in 2010. Ford looses market share Single source supply of components or materials Inability of Ford Credit to obtain competitive funding

Opportunities Produce fuel efficient Cars in the upcoming years. Produce Hybrid cars in upcoming years. Invest on electric, hybrid and solar energy Vehicles. They have a change to become more environment friendly company. Expansion of their market share into the Asian and Africa market. Joint ventures with other major competitors to combat recession. Initiate manufacturing operating in low cost countries. Giving more charities

Threats Rapid changes in fuel prices.

Government regulation outside US. Long lasting recession in majority of countries. Hard competition from other motor vehicle companies like Toyota, TATA motors. Variation in currency rates. Threats of substitutes Due to the recession ford face tough time to please its investors and employees. Decrease of the industry sales volume

The economic recession has affected the industry in a way that has reduced the sales volume of the whole industry, causing an increase in price competition. This tough recession has caused Ford since 2008 to sell some of their assets such as the jaguar and land rover subsidiaries based

in the UK to Tata Motors of India, the Volvo Corporation were sold to Geely automobile in 2010 and discontinuation of the Mercury, reducing his market share and increasing his capital to repaid loans and reducing interests. Ford reduces his portfolio in other to be more focus and improve on Ford and Lincoln brand. Lincoln was named top brand in 2011 Auto Pacific Vehicle Satisfaction awards and all ford brand made received awards such as Ford Fiesta and F-150 first place segment winners and Explorer and Mustang among six other Ford vehicles in top three rankings. Ford Fiesta first in segment to earn top safety ratings in the world's largest markets Thus, Ford focus enables to launch the first ford electric cars. Keys Trends

As political pressures for a greener economy intensify, the future of Fords main sales is centered on fuel efficient vehicles. Traditionally, Ford's most profitable vehicles have been large SUVs and pickup trucks. However, volatile oil prices and political pressures for more fuel-efficient cars have taken a toll on the market for these larger vehicles. As a quick fix, Ford announced plans to redesign three of his

manufacturing facilities formerly used to produce trucks for instead the production of six of its more fuel efficient European models in the US (such as the Mondeo and European version of the Focus, both of which are far more efficient than Ford's current American offerings). In the long term, the company intends for all of its vehicles to be the leader (or co-leader) for fuel economy in any given car category. As part of this plan, all of Ford's engines will be redesigned or updated, enhancing direct injection turbochargers will be made an option on all vehicles, and research and development spending on cars and crossovers will be increased from 1/2 to 2/3 of total development spending. The 2010 Ford Fusion Hybrid, for example, has been ranked the best affordable midsize car by US News and World Report, considered to be a better drive than the Prius and with better initial quality than the Camry or Accord. The company is also embracing lower tech solutions such as low resistance tires and 6-speed automatic transmissions that improve fuel efficiency over transmissions with fewer gears. These 6-speed transmissions allow the engine to work at more efficient levels and improve fuel efficiency by 4-6% over the 4 and 5 speed transmissions currently installed on most Ford vehicles. Ford hopes to build 98% of its vehicles with six-speed transmissions by 2012.

The beginnings of this massive adjustment can be seen with the 2009 Ford Focus, which has better fuel economy than the Honda Fit or Nissan Versa, and the 2009 Ford Escape, which gets better mileage than either the Toyota Rav4 or Honda CRV says the US news report. Yet as the development and production of a new car costs billions of dollars and several years to implement, Ford's efficiency campaign is both costly in itself and difficult to reverse once implemented, especially since Ford has practically exhausted its ability to borrow or sell additional assets to raise money. Ford Plans to Expand into Emerging Markets by Designing "One-Fit-All" Vehicles. Ford's current international plan is the "One Ford" campaign, which seeks to save production and design costs by producing a single fleet of vehicles for all markets worldwide. The first fruit of this scheme is the new Ford Fiesta, which was developed by Ford Europe but will be sold in all Ford's major markets, and Ford of Europe's iconic Ford Transit van, which will be introduced in Asia and the US. Whether Ford will be able to successfully use a single product line to both cut costs and grow sales worldwide remains to be seen.

Chairmans reports

Ford Motor Company completed a Remarkable turnaround in 2010. Our full year net income was an improvement of more than $21 billion compared to two years ago. We are pleased with these results, but determined not to lose focus on executing our plan and achieving our strategic goals. As the global economy improves and expands, we want to build on the solid foundation we have established. In the near term, we expect overall industry sales volumes to continue to grow worldwide in 2011. We plan to continue introducing best-in-class new products at a rapid pace. Increased sales volume, combined with our ongoing efforts to improve productivity, should enable us to continue to improve our year-over-year performance. Looking further ahead, it is clear that the difficult challenges we face as a society and an industry also present us with an incredible opportunity to add value for our stakeholders and shareholders. Concerns about the availability and affordability of fuel and the impact of CO2 emissions on the environment are growing. Companies that address these issues with products that customers want and value will gain a significant competitive advantage. As we climb out of the recession, I am optimistic about the possibilities that lie ahead. I believe this is one of the most exciting times in our industry since the automobile began being mass produced more than 100 years ago. Today automobiles are once again on the leading edge of technology, which is enabling us to make greener, safer, smarter cars without tradeoffs in function or performance. Ford has introduced new fuel-saving technologies across a wide range of vehicles to provide better fuel economy for millions of customers. We also are launching a full range of electrified vehicles to make it easier for our customers to embrace this exciting new technology. These efforts will continue and intensify as we move forward. I am proud of the outstanding job that has been done by the Ford team around the world, but we know we still have a lot of work to do. Having traveled so far in such a short time, we have no intention of slowing down now. We believe that success is a journey, not a destination and we are racing toward the future. Thank you for your continued support of our efforts. William Clay Ford, Jr. Executive Chairman March 10, 2011

Financial analysis of Ford Motor Company

Ford Motor Company income is generated by 2 sectors: the automobile and the financial services. Profitability and Efficiency ratios Gross margin (2010): ((128,954 104,541)/128,954))*100 =19% Gross margin (2009): ((116,283 98,866)/116,283))*100 =14.98%

The gross margin increases from 14.98% in 2009 to 19% in 2010 this is partly because of the increase of sales in 2010 from the automobile sector and a decrease by 22% in service sector.

Profit before tax% (2010): (7149/128954)*100 =5.54% Profit before tax% (2009): (2599/116,283)*100=2.23%

Net profit after tax% (2010): (6561/128,954)*100 =5.08% Net profit after tax% (2009): (2,717/116,283)*100 =2.33%

Asset turnover ratio (2010): (128,954/165,793) = 0.8 Asset turnover ratio (2009): (116,283/195,006) = 0.6

Return on Equity (2010): (6561/2569)*100 =

Liquidity ratios

Current ratio (2010): 34,368/34,516 =0.9 times Current ratio (2009): 39,923/35,932 =1.11 times

Acid ratio test (2010): (34,368 - 5,917)/34,516 = 0.82 times Acid ratio test (2009): (39,923 5,041)/35,932 = 0.97 times

INVESTMENT and Financial RATIOS Gearing ratio (2010): (88733/(88733+2569))*100 =