First of all, GM has shed nearly $40 billion in obligations to become debt-free. This gives GM a huge advantage competing with companies which did not bailout and is still paying off it borrowed to survive such as Ford. Second of all, GM is achieving a healthy margin. GM cut incentives and slim down. This movement causes a decline on sale but help company keep margin.
According to the cost-benefit analysis, the $49.5 million benefits and $137.5 million cost suggested that Ford implementation of safety improvements would totally outweighed their benefits. (Kelman, S. 2001) (81 words) 3. Utilitarians would say that jeopardizing motorists does not by itself make Ford’s action morally objectionable. The only morally relevant matter is whether Ford gave equal consideration to the interests of each affected party. Do you think Ford did this?
9-201-079 REV: MARCH 28, 2002 ANDRÉ F. PEROLD Ford Motor Company's Value Enhancement Plan (A) On April 14, 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to significantly recapitalize the firm’s ownership structure. Ford had accumulated $23 billion in cash reserves, close to the company’s largest ever cash position and significant relative to Ford’s $57 billion equity market capitalization. Under the VEP, Ford would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 either in cash or additional new Ford common shares. Ford also announced that it would distribute ownership of its Visteon Corp. parts unit to shareholders.
Ford was able to prevent this situation, but the motor company calculated that the cost for upgrading the faulty equipment would be much greater than the lawsuits filed from potential accidents. Ford wen with a strict cost-benefit analysis to determine the best time to release the Pinto. A total of 180 burn deaths, 180 serious injuries and 2100 burned vehicles was assessed from the Pinto. The sum would turn out to be $49.5 million, taking into consideration of human life and welfare. In contrast, the total cost for installing the gas tank fix on Pinto's ($11 per vehicle) was $137 million.
Running head: CASE 5 FORD MOTOR COMPANY Case 5 Ford Motor Company Lori Soukieh Professor Thomas Swinney BUS 302 Principles of Management July 24, 2011 CASE 5 FORD MOTOR COMPANY 1. The case creates four options to choose from. Discuss at least three criteria the company should use to decide which of the four listed options is best and the reasons why each criterion should be used. One option that would be most constructive is the move to and address the realities of lower demand; volatile fuel prices and the shifting model mix from trucks and large SUVs to more fuel-efficient vehicles. With this option, you are achieving the original vision of Henry Ford, affordable car form every American.
9/18/13 Alliance Concrete Executive Summary: Based on available financial data and forecasts, Alliance Concrete should pay the $3million dividend to National as well as invest the full $16million in new fixed assets to assure that there are not shutdowns, as there were in 2004. By paying the dividend and purchasing new equipment Alliance will need to renegotiate with its bank in order to delay any scheduled debt retirement and instead acquire additional debt financing. Doing so will ensure that Alliance maximizes its Return on Equity as well as continue its trend of increasing earnings, which is especially important considering the slowdown in the real estate market. 1. A reduction in the dividend would decrease the need for long-term debt in multiple ways.
2) Suppose the selling price of outsiders drops another $15 to $185. Should P purchase from outsiders? 3) Suppose (disregarding Requirement 2) that S could modify the component at an additional variable cost of $10 per unit and sell the 2,000 units to other customers for $225. Would the entire company then benefit if P purchased the 2,000 components from outsiders at $200 per unit? 4) Suppose the internal facilities could be assigned to other production operations that would otherwise require additional annual outlays of $29,000.
Our analysis leads us to conclude that Takai should aggressively pursue the strategy of adopting a “virtual integration model” consistent with that of Dell’s by restructuring Ford’s supply chain and vendor relationships. However, due to the inherent differences between Ford and Dell’s customer base, our recommendation is not to redesign Ford’s sales channels around a technology solution; industry differences ultimately create limitations in the degree to which information technology can be leveraged to improve the Ford’s customer experience. Secondarily (?can just use “Also”), we would rather see Ford employ segmentation tactics proven successful by Dell to mine profitability out of the most undesirable segment of automotive sales – fleet sales. Situation
“Alan Mulally, CEO, Ford Motor Company” Dr. Hammad ELBEDOUR BUS 520 Leadership and Organizational 14/11/2011 ABSTRACT Throughout the course of this document, I will discuss the role of leadership and how it can impact organizational performance; explore Mr. Mulally’s leadership style as exemplified by his actions; survey how goal setting helped Ford improved its performance; assess Mulally on each element of communication openness such as message transmission, trust, agendas, and goals; finally, I will evaluate effectiveness of his leadership style and recommend whether he should continue with this style. INTRODUCTION Alan Roger Mulally, CEO of Ford Motor Company, is a dynamic leader as evidence by his broad range of education and experience. Mr. Mulally began his management style by earning an aeronautical engineering degree from the University of Kansas, and a master’s in management from MIT’s Alfred P. Sloan School of Business in 1992. Mr. Mulally accepted a position as a senior vice president of Airplane Development for Boeing Commercial Airplanes group in 1994. Two years later, he became president of Boeing’s Commercial Airplanes and served as Chief Executive Officer until hand picked by former Ford Motor Company CEO, William Clay Ford, Jr. as the next chief of the struggling auto giant (http://media.ford.com, 2010).
We created the following examples to show how WACC could potentially influence Marriott’s financial decisions: Suppose Marriott is taking on a project that requires a $100,000 initial investment, which produces cash inflows of $20,000 per year for 10 years. If we use Marriott’s current WACC of 9.29% the project would produce an NPV of $26,730. If we use the Target WACC, 10.24% for Marriott the NPV would be $21,634. Deciding based on the assumption of an NPV of $26K but it will actually achieve a NPV of $21K. Management will have to explain to shareholders why they were unsuccessful in achieving increased shareholder value.