Ford Motor Company (US)
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The Ford Motor Company remains one of the world's major carmakers, but a series of challenges since 2000 have pushed it steadily down the rankings. In 2010, it slipped to the position of global #5 behind Hyundai, where it remains. As well as the main Ford brand, the company also owns North American luxury marque Lincoln. A sizeable collection of other brands have been sold or discontinued. A trio of British automobiles - Aston Martin, Jaguar and Land Rover - were relinquished between 2006 and 2008 and the group also surrendered its effective control of Japan's Mazda. The Volvo passenger car business in Sweden was sold in 2010 to Geely of China, and the struggling North American Mercury brand was shuttered at the year's end. Those disposals were originally prompted by a series of escalating problems during the 2000s ranging from over-capacity and management turmoil to a massive recall of faulty Firestone tires. In fact, these multiple hurdles were ultimately to prove modestly beneficial, allowing the group to begin its restructuring well before the sudden and near-catastrophic slowdown which occurred during 2007 and 2008, and which effectively bankrupted rivals General Motors and Chrysler.
Who handles Ford's advertising? Click here for agency account assignments for Ford from adbrands.net. Including unmeasured media, the company declared its own advertising costs in 2013 to be $4.4bn. Ad Age estimated global measured advertising expenditure of $2.41bn in 2013. In the US, Advertising Age/Kantar reported measured media expenditure of $1.14bn in 2013, out of an estimated total of $2.56bn. Biggest spending brands were Ford (measured spend $894m) and Lincoln ($223m). In France, Kantar (in Strategies) estimated total advertising expenditure of E240m in 2014.
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Ford Motor Company
Like other US manufacturers, Ford struggled with a collapse in performance in North America, its core market, in the second half of the 2000s. This business had been troubled for several years, dealt a series of blows by rising gasoline and raw materials costs, brutal competition on price and profit margins by foreign companies, and the weakening economy. Ford's slide began back at the end of the 1990s as a result of quality concerns. In 2000, the company was forced to recall 6.5m tires fitted to its key Explorer (and Mercury Mountaineer) SUV models at a cost of $500m after discovery of safety defects which were blamed for dozens of fatal accidents. In 2001, a further 13m Firestones were recalled at a cost of $2.1bn. Inevitably (but unfairly) the safety issue reflected on the Explorer brand itself, which saw sales plunge over the next few months. Another SUV model, the Escape, was recalled no less than five times since it was launched for a variety of problems. The Focus, only launched in the US in 1999, has been recalled six times, with the last recall involving 207,000 cars. Even excluding the Firestone problems, the group spent $1bn on recalls in 2000. Meanwhile both General Motors and Japanese manufacturers aggressively targeted Ford's traditional strong areas of pick-ups and SUVs, and quickly came to outrank Ford in productivity. Many of those areas were overhauled by Ford over the following years, with quality greatly improved by 2003. But the general trend towards lower sales and profitability has been harder to reverse, despite a string of attractive new models.
Ford's F-Series pickup remains America's single best-selling vehicle, car or truck, a position it has now held for over 30 years. Sales for 2014 were almost 754k units, more than 40% higher than its closest rival (Chevrolet's Silverado), and accounting for almost a third of all Ford's US volumes. It is supported by the Econoline/Club Wagon or E-series (far behind at 103k units in 2014). Another model, the Ranger compact pick-up, was discontinued in 2012. The company is also traditionally strong in the SUV segment, although sales in this segment have fallen considerably as buyers shift from older full-size models to crossovers. The Ford Explorer was among the most successful vehicles of the 1990s, more or less responsible for establishing the popularity of the SUV concept. Sales peaked in 1999 at 445k units before the Firestone recall. Sales fell sharply after that, hitting a low of less than 56k in 2009 before rebounding steadily (189k for 2014). The Explorer and another fullsize model, the Expedition, have been supplanted in the group's portfolio by smaller crossover models, notably the Escape, the country's best-selling small SUV at 306k units. It is supported by the Edge midsize crossover model (109k). Another crossover SUV model, the Ford Flex, launched mid-2008 but sales have been lacklustre, slipping back below 30,000 units in 2011.
For many years, the group's best-selling passenger car was the old Taurus model. This was overtaken for the first time as the group's best-selling car in 2006 by the Focus (same name but different design from the model sold elsewhere in the world). In a clear sign of the changing nature of the US marketplace, the Focus was the group's biggest success of 2008, and the only Ford model to report an increase in sales that year. However it is now outsold by another small car, the Fusion, sales of which have soared following the launch of a hybrid version in 2009. That entered the US Top Ten in 2014, overtaking the Escape to become Ford's #2 model at almost 307k units, to 220k for the Focus. The Fiesta small car, a huge hit for the group in Europe, launched in the US during 2010, but sales are still small, falling below 64k units. The revamped Mustang sports model suffered in the recession but recovered to 83k units in 2014.
Europe is the Ford brand's second-biggest global market. More than a third of unit sales come from the UK, the company's second biggest market after the US, where it is long-established as the #1 car brand. The company had already endured years of heavy losses in this region even before its difficulties in the US. Ford UK may have stayed #1, but the company consistently lost market share during the 1990s, and racked up huge losses, profitable for only two years out of ten during the decade. As a result, the group effectively ended full-scale car manufacturing in the UK in 2000, a move which led to a further $1bn restructuring charge relating to the downsizing of the Dagenham plant. By 2004, it was clear that Ford Europe was back on the right track, back in profit after a $1.1bn loss the year before. There were similar improvements during the year in both Latin America and the Asia-Pacific region. However, Europe as a whole has suffered a more prolonged slump from the more recent recession, still reporting losses for 2011.
Ford's model range varies widely from territory to territory. Few of the US model names names mean anything in Europe and the Focus model available in the US is different from the one marketed elsewhere around the world. In Europe, the company has been busy renovating its portfolio of models in recent years with the launch of the Galaxy MPV, the Ka and Puma small cars, and the long-awaited Focus, replacement for the tired Escort model. Other regions tend to feature a mix of different models from North America or Europe. The group successfully launched the Ka as a small city-car brand to rival DaimlerChrysler's Smart, and later diversified with spinoff models SportsKa, CityKa and a diesel version.
Ford's sole brand partner in the group portfolio is now Lincoln, sold only in North America. It is positioned as a luxury brand to compete with GM's Cadillac or top-of-the-range imported German or Japanese cars. Historically, its reputation was sealed by the legendary Continental sedan, designed to offer "indulgence at its finest". That model is no longer made, and the brand's overall sales were hit hard by the surge of interest in imported brands such as BMW, Mercedes and Lexus during the 1990s. Ironically they held up comparatively well in the subsequent economic turmoil of the 2000s. In fact, Lincoln was one of the group's best performers in 2007, although sales slid during 2008 and especially in 2009 as a result of the general market decline. It has remained flat since then, even despite an aggressive relaunch campaign launched in 2012. Unit sales remained flat at between 80k and 86k every year since 2007, before jumping in 2013 and 2014 as a result of a relaunch campaign. Volumes for 2015 rose almost 16% to just under 94,500 vehicles.
Although North America is by far its biggest market, Ford has an extensive global footprint. Its presence is especially strong in Europe, although a surprise slump in 2010 lost the group its long-held #2 slot across the region. That year it ranked 3rd in Europe behind Volkswagen and Renault, and it remained in that position for 2013. Europe's continuing economic weakness has significantly depressed sales, with wholesale units falling steadily to below 1.3m vehicles. The group has a significant but small presence in Latin America (primarily Brazil, Argentina and Venezuela; total units 498k in 2012) and a growing footprint across Asia, where sales topped 1m units in 2012. The group also has a joint venture in China with local manufacturer Changan to manufacture passenger cars, and with Jiangling Motors to make light commercial vehicles. Ford commenced operations in India in 1999, marketing a specially produced small car, the Ikon. Other models have followed. A joint venture was agreed in 2011 with Sollers of Russia to begin producing and distributing Ford passenger and light commercial vehicles.
The Automotive Consumer Services Group is the umbrella for Ford's various services businesses. In the US, this is principally represented by the Genuine Service brand (previously Quality Care), operating through Ford, Lincoln and Mercury dealers. (Another extended service arm, APCO's EasyCare, was sold to private equity owners and management in 2007). Motorcraft is the group's parts and supplies distributor, available through Ford, Lincoln and Mercury franchised dealers worldwide. A partnership with Microsoft led to the development of Ford Sync, a voice-activated in-car entertainment and navigation system which the group now offers in every new Ford and Lincoln model in the US, and which launched in Europe in 2011. Car parts manufacturer Visteon was spun off to shareholders in 1999, but Ford is still by far its biggest customer, accounting for around a third of sales. (Hyundai contributes a further 30%). The business struggled as a standalone company and in 2005, Ford agreed to buy back almost 20 Visteon factories in North America for around $1.1bn. These were grouped under the umbrella of Automotive Component Holdings, and most have been sold off or shut down. Despite this assistance, the remaining Visteon business was forced to file for bankruptcy in 2009. It emerged from Chapter 11 at the end of 2010.
Total automotive revenues for 2014 were $135.8bn, down 4%. Combined operating profit slumped 35% to $4.49bn. Effectively all of that profit was generated in the Americas, with $6.9bn from North America offset by operating losses in South America (negative $1.2bn), Europe (negative $1.1bn) and Middle East/Africa but a small profit in Asia Pacific ($589m). The US is still the group's biggest market by far, accounting for 39% of wholesale units in 2014. China comes next (just under 700k units in 2013), followed Brazil (335k in 2013), the UK (311k - see Ford Motor UK), Canada (277k) and Germany (where Ford is the top-selling non-German brand at 198k units). All other markets are under 150k units.
The group's financial services arm operates as a separate division. Ford Credit (or FCE in Europe) is the world's largest dedicated automotive finance company in the world, serving more than 11m customers in 36 countries. The business also operates as Ford Bank or Ford Leasing. During the first half of the 2000s, the financial services arm proved an invaluable cash-generating resource, off-setting the difficulties within the manufacturing businesses. Those benefits were quickly eroded in 2007 and 2008 by the credit squeeze, as levels of default rose sharply. Ford Credit contributed revenues of $8.3bn in 2014, and operating profits of $1.8bn.
Ford's finances have been mercurial to say the least in recent years. Strong performance in the late 1990s was followed by steep losses in 2001 and 2002 totalling $6.5bn. However, Ford demonstrated improving performance in 2003 and 2004. Group revenues for 2004 were $171.6bn, while net income increased seven-fold from $495m in 2002 to $3.5bn. (The bottom line was generated almost entirely by the group's financial services arm, while automobile operations reported a small operating loss of $177m). The following year brought with it numerous additional challenges. Ford issued a warning in April 2005 that its earnings for the year would fall well below forecasts, and so it was to prove, although the group still managed to stay in the black. Group revenues for 2005 were $178.1bn, up almost 4%. Net income was $2bn, down 43%.
The results for 2006, exacerbated from a concerted shift by buyers away from gas-hungry vehicles, were much worse. The group reported a net loss of $12.7bn, including almost $10bn of restructuring charges and asset impairments. Sales fell by almost 10% to $160.1bn. Once again, the worst damage came from North America where, after 2004's profit of $1.4bn, operating losses rose from $1.5bn in 2005 to $6.1bn. For 2007, the group reported a net loss of $2.7bn. This was at least an improvement on the year before, with an operating profit of $126m undercut by substantial impairment and restructuring charges totalling $3.9bn. Revenues were up by 9% to $173.9bn.
For 2008, reported group revenues fell by 15% to $146.3bn. Net loss for the year, including a substantial $7.6bn charge for restructuring and asset impairment, soared to $14.7bn. That figure was the worst in the company's 106-year history. The main culprit was Ford North America automotive, which reported a loss of $10.2bn on sales which plunged 24% to $53.4bn. Ford South America reported a $1.2bn profit on sales of $8.6bn, and Ford Europe a surplus of $970m on sales of $39bn. There was genuinely good news to report - finally - for 2009. The group scraped net income of $2.7bn for the year, its first profit since 2005. However, the still-difficult automobile environment was plain to see in revenues which slid by almost 20% to $118.3bn. The group's automotive operations were still in the red by $1.4bn, but that loss was offset by a profit in financial services as well as various accounting adjustments. The following year brought a much stronger recovery, with net income more than doubling to $6.6bn - its best result for more than a decade - on sales of $120.9bn.
However that performance was dwarfed by 2011's results. Revenues rose by a further 13% to $136.3bn, while net income soared to a spectacular $20.2bn. However, the largest chunk of that profit was generated by the release of a $12.4bn provision against deferred tax assets. Excluding that adjustment, operating profit rose by 6% to $8.8bn. For 2012, group revenues slipped back to $134.3bn while net income plunged to $5.67bn as a result of a new tax provision. Excluding special items, operating profit was just under $8.0bn. In 2013, the group championed one of its best results in years, with total revenues rising 13% to $146.9bn, while net income jumped 26% to $7.16bn.
However, there was a backward step in 2014 as North America revenues slipped. Despite sales gains in the long-troubled European market and also Asia Pacific, group revenues declined 2% to $144.1bn. Net profit more than halved to $3.19bn.
The founder's great-grandson, William Clay Ford Jr, is executive chairman of Ford. In 2001, he took over the role of CEO as well, becoming the first family member to lead the company since his uncle Henry Ford II departed in 1980. In 2006, however, as the group struggled to turn around its business in North America, Ford stepped down as CEO, bringing in former Boeing executive Alan Mulally as president & CEO. Several other Ford family members hold roles within the group. The most significant of these is Elena Ford, great-great-granddaughter of the company's founder, and the first female Ford to work for the business. She is VP, global dealer & customer experience. The Ford family retains some 40% of the voting shares.
Mulally is widely regarded to have fixed Ford's many problems during his tenure as CEO, and steered the group back to health. However, he stepped down in July in 2014, to be succeeded by Mark Fields, previously group COO. In another change, two of the group's top managers swapped jobs at the end of that year. Stephen Odell, formerly group EVP & president, Ford EMEA, returned to the US to take over from Jim Farley as group EVP, global marketing, sales & service. Farley in turn relocates to Europe as regional president.
Other senior executives include Robert Shanks (EVP & CFO), John Fleming (group EVP, global manufacturing & labour affairs), Bernard Silverstone (group EVP, chairman & CEO, Ford Credit), Joe Hinrichs (group EVP, & president, Americas), David Schoch (group VP & president, Asia Pacific), John Lawler (VP, Ford China), Bennie Fowler (group VP, global quality & new model launch), Raj Nair (group VP, global product development) and J Mays (group VP, design & chief creative officer).
Former GM and Allstate marketer Mark LaNeve was appointed in Jan 2015 as SVP, US sales, marketing & service, succeeding John Felice. Other senior marketers include Ken Czubay (VP, US marketing, sales & service, North America), David Mondragon (general manager, US marketing), Matt VanDyke (director of global Lincoln marketing, sales & service), Murat Yalman (director, global product marketing & insights), Susan Venen Bock (US media manager & global agency management), Keith Koeppen (manager, US marketing communications), Ginger Kasanic & Mary Ellen Abraham (experiential marketing managers) and Lisa Mancuso-Horn (global advanced product marketing & strategy manager). Roelant de Waard is VP, marketing, sales & service at Ford of Europe.
According to legend, Henry Ford first set out to build cars when he fell off a horse and decided there must be a more comfortable way to travel. In 1903, Ford and eleven colleagues set up the Ford Motor Company with $28,000 capital. The first Model 'A' was built in 1903, with a speed of 8 horsepower. The breakthrough came five years later. The Model 'T' changed the world. Light and hard-wearing, the car could do 20 miles to a gallon of gasoline, at a top speed of 45mph. Using an innovative moving production line assembly process, the car was also capable of fast construction - taking just an hour and a half, when most cars took 12 hours to be built.
With an eye already on the global market, Ford set up a second factory in Manchester, England in 1911. [See Ford Motor UK profile for more]. But work in the factories was low-paid, exhausting and mind-numbing, with the result that Ford struggled to keep a regular workforce. As a result, in 1914, he announced an unprecedented change to employment terms, cutting his US working day from nine to eight hours, but offering all workers a uniform $5 per day wage, more than twice the national average. By the end of 1914, Ford was building over 300,000 cars a year, more than all 299 other auto manufacturers combined. Keen to control every aspect of production, the company soon began to produce every element of its cars in-house, even the steel and glass. To streamline production further and reduce costs, Ford famously dropped optional colour schemes. The Model T was available in "any colour so long as it is black". Prices came as low as $400. By 1917, the company had turned out a million cars, and was turning its hand to trucks and tractors. By the start of the 1920s almost two-thirds of all cars on the world's roads were made by Ford.
In 1919, Henry Ford and his son Edsel bought out their partners to become sole shareholders of the company. They also acquired the rival Lincoln Motor Company for $8m. Ford's process was efficient, but it was also inflexible. By the 1920s, the Model T was almost unchanged in design since its launch, but competition was increasing as rivals sought to undercut its popularity with a host of new design features. In 1926, Ford was overtaken by General Motors, then later by Chrysler as well. In 1927, after 15 million cars, the company finally stopped making its Model T. To replace it, the new Model A was launched, followed by the V8 and the Mercury. With the start of the Second War, passenger car production ceased. Instead Ford turned its attentions to military vehicles - including the Jeep, introduced in 1941 - and aircraft. The first Ford bomber, the B-24, was completed in 1942. However Edsel Ford, who had taken over control of the business, died in 1943 aged only 49. His legendary father resumed control of the company until his own death four years later.
In the hands of Edsel's son, Henry II, the company was restructured, and by 1950 had regained second place above Chrysler although it still trailed GM. Ford went public in 1956, and established a new subsidiary the same year, Aeronutronics Systems, specialising in weapons and aerospace technology. In 1958, the company launched the infamously unpopular Edsel model. The company had budgeted to sell 200,000 of this "hi-tech" saloon, but the car was a disaster, selling only 30,000 units. The model was ditched at a reported cost of $350m. Ford regained its poise with the Mustang in 1964. But the group was also plagued by labour disputes during the 1960s, resulting in a series of company-wide strikes.
In 1986, Ford briefly overtook General Motors in earnings for the first time since 1926, with record profits of $4.6bn. It broadened its portfolio with the acquisition of agricultural machinery businesses New Holland and Versatile, and by the close of the decade had widened its share of the US market to almost 22%. In 1989, the company also paid $2.5bn to acquire luxury British carmaker Jaguar. In 1991, New Holland was sold to Fiat. Ford turned its hand to car rental, buying Hertz in 1994, and Budget Rent-a-Car in 1996 (sold a year later). It also built its stake in Japanese carmaker Mazda to 33% in 1997, spun off its finance division Associates First Capital, and restructured Ford Automotive Products Operations, the umbrella for the various parts and components businesses within the group. The world's second largest supplier of auto-parts (after General Motors' Delphi Automotive Systems), this business was rebranded as Visteon, and eventually spun off to shareholders in 1999. In 1998 Ford sold its Freightliner truck division to Daimler-Benz, and floated off 19% of the Hertz holding. It also acquired Cosworth racing engines from Audi, following Volkswagen's unsuccessful attempt to seize control of Rolls-Royce.
At the same time, newly appointed CEO Jac Nasser unveiled an ambitious strategy to build the group into the world's leading automotive company, covering every aspect of car service and maintenance as well as production. In the UK, it acquired a series of after-care and repair businesses in order to extend its contact with car owners. The US was ruled out for a similar approach because of the strength of auto-servicing groups like Sears (at the time) and Midas. Instead, Ford announced plans to move into the auto recycling business, buying up scrapyards around the country. The group also acquired Automobile Protection Corporation (APCO), who sell extended maintenance contracts on new and used cars under the EasyCare brand.
The group reported stunning financial results for 1999, with group sales of over $162bn and net income of $7.2bn, a world record for any carmaker. Much of this strength came from North American manufacturing, which contributed profits of $6bn. Elsewhere, the picture was different, with Europe and Latin America both under pressure. Meanwhile, the industry was undergoing a wave of global consolidation, with large companies racing to snap up successful brands. Following in the wake of the DaimlerChrysler merger, Ford beat off competition from Fiat to acquire the passenger car business of Sweden's Volvo in 1999 for $6.5bn.
Ford was also one of several major auto manufacturers who began rescue talks with debt-ridden Japanese company Nissan prior to the latter's deal with Renault. At the end of the year Ford became involved in talks with troubled Korean carmaker Daewoo Motors. Mid-2000 Ford agreed conditionally to acquire Daewoo for around $6.8bn, and began due diligence. But within two months, the American company claimed to have discovered worse then expected liabilities, and unexpectedly withdrew its offer. This led to a row with the Korean government who said Ford had broken the spirit of international business negotiations and had pulled out because of its own internal problems, which had suddenly begun to appear during late 1999.
Initially the most obvious of these were the difficulties of restructuring of the company's European operations after what was effectively break-even in 1999. But Ford was also hit by a string of allegations of employee age, race and gender discrimination in the US and UK. These didn't halt the group's continuing expansion. Ford was the surprise beneficiary in early 2000 when BMW finally lost patience with its severely troubled Rover Group subsidiary. BMW had been expected to hold onto Land Rover, perceived as the jewel in Rover's crown. Instead the German company sold the brand to Ford for E3bn (approx $2.6bn). In late 2000, Ford offered to take its Hertz subsidiary private again, giving shareholders around $700m for the publicly held 19% stake.
Yet by now, other more damaging worms had crawled out of Ford's woodwork. The group was hit by unexpected liabilities after Japanese manufacturer Bridgestone/Firestone discovered serious safety defects in its tires, fitted as standard on the Explorer sports utility vehicle in the US. (Bridgestone/Firestone finally agreed to pay $240m of compensation to Ford in 2005). Ford was also forced to recall almost 2m of its trucks and cars sold between 1983 and 1995 because of alleged defects in the ignition devices. In 1999, the group commenced what turned out to be the biggest product recall in US automotive history to fix faulty cruise control switches implicated in a series of vehicle fires. Between 1999 and 2009 some 14.3m vehicles were called back for repairs. Mid-year the company announced it would cut around 10% of its North American workforce in a bid to improve profitability. Although a series of attempts were made to limit the damage during 2001, the company reported losses for two consecutive quarters. This led to the ousting of veteran Ford CEO Jac Nasser in October, and his replacement by William Clay Ford Jr. Economic slowdown in the last quarter of 2001 only exaggerated the group's woes, as it was left sitting on unsold inventory.
The full scale of Ford's troubles was unveiled in early 2002, when the company reported a devastating $5.5bn loss for 2001. This included a $4.1bn after-tax charge for restructuring and the write-off of over-valued assets, but the company's various divisions were also revealed to be suffering at operating level. The automotive businesses alone lost almost $1bn as a result of fierce competition and marketing costs, even before restructuring. Although finance arm Ford Credit scraped an $814m profit for the year as a whole, in the last quarter its bottom line was slashed from a profit of $410m in the last quarter of 2000 to just $6m for the same period in 2001.
Unveiling a huge restructuring, the group announced it would close down five of its North American factories by 2005, and eliminate a further 17,000 jobs in addition to about 18,000 cut since January 2001. The remaining US plants were adapted so that they could more easily produce different models, a process already successfully implemented by the company's competitors, as well as by its own European operations. The company also promised to raise $1bn in cash from a sell-off of assets, including its rag-bag collection of auto repair centres and junkyards, acquired in the late 1990s.
However a further blow came with the resignation in 2002 of Wolfgang Reitzle, president of the group's Premier Automotive Group of luxury brands. Towards the end of that year, Ford COO Sir Nick Scheele appointed WPP as sole supplier of advertising and marketing services to Ford Motor Company. The car company was already WPP's biggest global client, but no formal agreement had been made regarding the relationship at board level. A few months later Ford said it would conduct an investigation into the appointment to ensure it was made in "an open and transparent" way. (By coincidence, Scheele's son worked at the time for WPP's Y&R agency in New York, though not on Ford business). WPP's sole appointment was subsequently overturned by Ford to avoid any possible controversy. Instead, a few months later in July 2003, the two companies agreed a centralised contract for 2004 to replace separate agreements with local WPP agencies around the world. Another embarrassing personnel-related situation emerged in late 2003 when former head of Ford Europe Martin Leach sued the group for, he claimed, effectively forcing him out of the business and then blocking his employment as head of Fiat Auto under the terms of a non-compete agreement. Sir Nick Scheele, group president responsible for the group's cost-cutting program in the US, retired in early 2005.
In 2005, the group agreed to sell Hertz to a consortium of investors for around $5.6bn. The world's largest car rental company, it was actually owned by General Motors until the 1950s.
Ford faced new challenges during 2005 as brutal competition combined with soaring oil prices devastated sales of its most popular models in the US and eviscerated profits. With long-term healthcare and pension costs also soaring, the group launched emergency talks with labour unions to renegotiate its ongoing commitments in order to cut costs. In January 2006 the group launched yet another restructuring drive, with plans to close 14 more factories in North America at a cost of up to 30,000 jobs. Chairman & CEO Bill Ford finally surrendered the latter title to newly recruit Alan Mulally who was given the task of nursing the struggling group back to profit.
One key move, orchestrated by outgoing CFO Don Le Clair, was to mortgage many of the company's physical assets including its factories and real estate. This decision, regarded at the time by some executives as excessive, proved extremely beneficial in the medium-term, since it supplied Ford with $23.6bn in cash with which to turn the business around before the freeze which petrified credit markets from 2007 onwards. It also cut back staffing levels and closed 12 factories in North America, and was also able to agree improved contract terms with the main UAW labour union.
Ford also acknowledged that its diversification into the luxury market had been a misstep, and it set about dismantling the Premier Automotive Group. Ultra-prestige sports car business Aston Martin was sold in March 2007 for £480m to a UK-based consortium. The group officially began to seek buyers for Jaguar and Land Rover later the same year. Tata Motors of India was named as the preferred bidder at the end of 2007, although negotiations continued for a further three months until finally reaching a conclusion in March 2008. Tata agreed to buy Land Rover and Jaguar for a combined total of $2.4bn (around half what Ford originally paid for the businesses). In return, Ford contributed around $600m to the two units' pension plans, and will also continue to supply engines, transmissions and other components. Ford vowed at first to hold onto Volvo. However this business too was put up for sale in 2009.
Last full revision 14th October 2013; updated 5th February 2013
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