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In: Finance

Please examine and make an assessment on Ford's profitability over the last five years compared too...

Please examine and make an assessment on Ford's profitability over the last five years compared too the auto industry? [200 words or more][Will give thumbs up]

Solutions

Expert Solution

Ford is one of the oldest auto makers still in existence, with a global presence and a number of well known brands and models.

It makes a majority of it's income from producing and selling cars to consumers.

Despite it's impressive history the past 5 years had been tough for Ford. During that period, company' s stock was showing downtrend from$17.4 in August 2014 to a $7.4 in December 2018.In 2016, the car selling in US was falling due to price raising in vehicles. Ford has performed poorly in international market in Europe, South America and especially in Asia-pacific. Finally Ford had been slow to react to Increasing demand in hybrids and electric vehicles.

More recently a catastrophic fire in Michigan- based magnesium plant disrupted the supply chain of Ford in May last year.This incident forced to company for halt the production of F-150, it's best selling car over a week.This disruption , coupled with report of negligence in plant caused the Ford' s stock price to fall over 35%.The automotive company reported a net income$0.1bn that quarter, down from $2.4 bn in Q4 2017

Ford makes majority of it's money by selling it's car.It sells vehicle whole seller to dealers and distributors in world' s five major geographical

Segment like North America,South America, Europe, middle east Africe and Asia Pacific.

Future design-Ford has begun what it calls global

Redesign to become more agile and less beurocratic in the face of auto industry destabilizwd by increasing competition in auto industry.

Ford plans to cut approx. 10% salraried staff at August with its managerial staff taking its big hit. Tis step will eliminate appox 7000 white collar jobs and save $600 mn in a year. Ford is concentrating in now new innovative strategies which will helping in recapturing the market.


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