Introduction: Ford and GM History
The automobile industry is one of the largest job creators in the US. Most automakers are headquartered in Detroit, Michigan and they employ hundreds of thousands of workers. The ongoing recession has dented the prospects of the automakers like Ford and General Motors who have seen their sales dip and their volumes hit by the crisis. Indeed, the situation is so severe that GM had to be bailed out by the government. In this context, the history of the automakers like Ford and GM offers insights into how they work and how they intend to perform in the future. For instance, Ford is the pioneer of the assembly line manufacturing method as well as the moving assembly line. It also pioneered the payment of high wages to the workers and the combined ideology in which Henry Ford introduced these changes has come to be known as the Fordist school of management thought. Apart from this aspect, both Ford and GM have been in the automobile industry for more than a hundred years and have introduced several innovations and inventions that have enhanced customer value significantly.
This paper is a profile of the auto industry and discusses GM and Ford and their histories along with details about their sales and market share. The focus of this paper is on emphasizing the salient aspects of these automakers in terms of their histories and future predictions. This paper is divided into several sections with each section discussing a specific aspect about these companies. With this overview, we can now launch into the full discussion of the auto industry with specific focus on Ford and GM.
Ford Motor Company or otherwise known as Ford is a US based automobile maker that was founded by the late pioneer of the assembly line paradigm, Henry Ford in 1903. The company is headquartered in Detroit, Michigan, and is in the business of selling commercial vehicles and automobiles under the brands of Ford and Lincoln. The company is known for its pioneering and trendsetting efforts as far as the management paradigm is concerned. As mentioned earlier, Henry Ford pioneered the concept of the Assembly Line method of manufacturing and he is credited with introducing the moving assembly line method. The company is the second largest automaker based in the US and the fifth largest worldwide in terms of vehicle sales. It is also the fifth largest automobile maker in Europe and is the eighth ranked company that is American based in the 2010 Fortune 500 list. It has revenues exceeding $120 Billion and produces nearly 6 Million vehicles every year. It is also the largest employer in the US and employs nearly 250,000 employees in its 90 facilities and plants worldwide. Apart from these statistics, it commands a market share of nearly 20 percent in the US for passenger vehicles and automobiles. In 2010, the company sold off its Jaguar and Land Rover brands that were based in the UK to Tata Motors. With this sale, it somewhat trimmed its portfolio of brands (Gear Heads, 2013).
General Motors
General Motors or GM Inc. is a US based automaker that is among the world’s largest automakers by volume of cars and passenger vehicles sold. The company employs more than 200,000 people worldwide where it operates in 37 countries around the world. The company is known as an old warhorse of the auto industry, has survived, and weathered several storms including the global economic crisis of 2008 where it had to be bailed out by the government. The company’s plants are located in 37 countries worldwide but its sales are in 157 countries, which show the extent to which the company has spread its tentacles around the world. The company was in the news recently for its chapter 11 reorganization or its filing for bankruptcy and subsequent rescue by the Federal Government (GM.com, 2013).
It was founded in 1908 in Flint, Michigan, and was the world’s second largest automaker until 2009 when it filed for chapter 11 reorganization. It is indeed a record that the company led the pack for 77 consecutive years in terms of the number of vehicles sold and is a household name along with Ford in terms of the brand recall for cars and other passenger vehicles. Though the company went through a difficult phase in the aftermath of the global recession, it regained its position at the top of the heap in 2011. This shows the resilience and the strength of the company in weathering the economic storm (New York Times, 2009).
Comparison and Analysis
Both GM and Ford have had a long and chequered history in the automobile market. They have weathered many storms and there is no reason to doubt that this time it is going to be different. As the history of both Ford and GM shows, they are innovative and inventive which means that they would no problem whatsoever in overcoming the challenges of the present and the future. The auto industry is facing a fork in the road and the paths that these automakers choose would determine the future trajectories of development. In other words, the choices that they make now would determine the consequences in the future. The choices pertain to the need for deciding whether these companies would want to take the path of fuel efficiency and productivity or whether they would continue on the same path that they are in now with its gas guzzling and emission spewing vehicles (Ford.com, 2013).
As Ford pioneered the assembly line, it is expected that it would again do so by pioneering another initiative that would go a long way in ensuring that the auto industry turns the corner again.
Prediction for the Future
However, the automobile industry is going through tough times in the context of the global economic crisis, a rebound and recovery is expected in the next year or so. However, the rebound that is expected is more to do with producing fuel-efficient and customer value enhancing vehicles rather than doing more of the same. In other words, the future of the auto industry lies in ensuring the hybrid models that are fuel-efficient and emission reducing units. This means that both GM and Ford have to focus on getting this right by targeting the consumers who want green cars and who want cars that reduce their carbon footprint rather than gas-guzzlers (New York Times, 2009).
The unit spend by the consumers is going to go up in the near future from the present value that is around 10,000 Dollars. This increase would be devoted to spending on hybrids and other cars that are environmentally friendly. Apart from this, both Ford and GM can target the emerging markets of China and India that offer unprecedented opportunities for growth and success. Fourth, both GM and Ford have to realize that they cannot expect the Federal government to bail them out all the time and hence, they must set their finances in order that includes less speculation and hedging and more manufacturing growth rather than financial growth. These are some of the trends that Ford and GM would have to contend with the coming years (Gear Heads, 2013).
Conclusion
This paper has considered the auto industry from multiple perspectives. The key theme in this paper is that given the history of both GM and Ford, it is highly likely that they would weather out the storm of the ongoing global economic crisis and come up with new innovations and newer methods of process efficiency. The fact that already these companies have been thinking about introducing hybrid cars and fuel efficient vehicles is indicative of their changing priorities.
Given the fact that Ford is considered the pioneer of modern management, it is likely that it would pull out a few rabbits from the hat as far as dealing with the challenges caused by the ongoing global economic crisis are concerned. Before concluding the paper, it would be worthwhile to note that both Ford and GM can weather the challenges by focusing on innovation and inventiveness apart from a ruthless focus on cutting costs. In conclusion, though the auto industry is going through a rough patch at the moment, it would be safe to say that both Ford and GM can come out of this challenge in flying colors.
References
Ford.com (2013). Go Further Technology. [Online] Retrieved from: http://www.ford.com/ [Accessed: 14 Jul 2013].
Gear Heads (2013). The History of Ford Motor Company - Gear Heads. [Online] Retrieved from: http://gearheads.org/the-history-of-ford-motor-company/ [Accessed: 14 Jul 2013].
GM.com (2013). General Motors Company | Official Global Site | GM.com. [Online] Retrieved from: http://www.gm.com/ [Accessed: 14 Jul 2013].
Nytimes.com (2009). A Primer on the New GM. [online] Retrieved from: http://www.nytimes.com/2009/07/11/business/11primer.html?_r=0 [Accessed: 14 Jul 2013].
