Ford Motor began a manufacturing revolution with mass production assembly lines in the early 20th century, but today, it is one of the world's largest automakers. Brands include Ford and Lincoln; Mercury ceased production in 2010. Among its models are the redesigned Ford Mustang, the F-Series pickup, and the fuel-efficient Focus. Finance unit Ford Motor Credit is one of the US's leading auto finance companies. Ford owns a small stake in Mazda but sold Volvo in 2010 to Zhejiang Geely Holding, parent of Geely Automobile, for about $1.3 billion cash and other monetary consideration. It operates about 70 plants worldwide, but gets more than half of its sales from North America.
Now that the Mercury brand has been discontinued, finances are freed up for product development and marketing of the Lincoln, Ford's luxury brand. The company paved the way for a model push that included the Lincoln MKZ Hybrid for North American drivers.
In the last couple of years, Ford's finances are finally on a positive trajectory. Its $2.7 billion net income for 2009 marked the first time since 2005 that the company realized a positive gain, having posted losses in the billions for 2006 to 2008. The spell that was broken in 2009 was just a glimpse of what was to come in 2010 when the company's bottom-line zenithed to more than $6.5 billion, an almost 60% increase over the prior year. Ford then recorded a net income of more than $20.2 billion in 2011.
Revenues for 2010 rose more than 8% over 2009. Year-over-year 2011 revenues inched up 5% thanks in part to strong sales of the Fiesta car and Escape and Explorer utility vehicles. At the same time, the company reduced its debt by more than $14 billion (about 43%) by year-end 2010, and an additional $3 billion was shaved off in spring 2011. By year-end 2011 it had reduced its debt by 4.5 billion.
This change of pace comes on the heels of the global economic downturn that hit the auto industry particularly hard, especially in North America. Although Ford didn't seek loans from the US government or go through bankruptcy as Chrysler and General Motors did, the company's lackluster results, weighed down further by billions in debt, made recovery difficult. In response, Ford reduced its 33% stake in Mazda to 3%, effectively ceding control back to the Japanese. In a larger move, Ford sold Volvo.
Geely, China's largest privately owned carmaker, acquired Ford's Volvo unit in mid-2010. Ford retains no ownership in Volvo. Volvo was sold for more than $4.5 billion less than what Ford paid for it in 1999.
To improve production globally, the company has embarked on a mission of building vehicles with common platforms that are sold across several geographic markets. Ford has set a goal of using nine core platforms for more than 85% of global volume by 2013.
Part of the company's global strategy, as it moves forward in creating a global vehicle platform, is related to the trend of cutting back on the number of suppliers used. Ford is a trend setter in this area and has reduced its suppliers list from 1,500 in 2010 to about 1,350 at year-end 2011 with a goal of about 750. Visteon remains on this short list, relying on Ford for about 27% of its revenue. As part of Visteon's exit from Chapter 11 protection in fall 2010, Ford agreed to give the supplier $600 million in business through 2013.
Following another trend, and to its credit, Ford was the first major US automaker to react to the spike in gas prices and job losses impacting car sales. The company has worked to improve vehicle fuel efficiency, launching hybrid models, such as the 2013 Fusion that will be available with hybrid and plug-in hybrid powertrains. And in 2012 the company will debut ECOnetic versions of the Focus and Fiesta that respectively consume 89 and 87 gallons per kilometer.
The company is also promising upgraded engines and powertrain transmissions, such as the 2.0 liter EcoBoost which combines direct fuel-injection and turbo boost to lower emissions and raise miles per gallon. Annual worldwide production of vehicles with Ecoboost engines is forecast to be at 1.5 million by 2013.
Like many other car makers, the company is looking to emerging economies for growth, particularly Brazil, Russia, India, and China, where cars sales are forecast to grow more rapidly than in mature markets. Ford is building new plants in China, India, and Thailand to meet more demand in the region.
Ford manages its global operations through joint ventures. It has partnered with companies in China, Germany, Taiwan, Turkey, and Vietnam, among others. Ford Otosan, Ford's joint venture with Turkey-based Koç Holding, supplies the Ford Transit Connect and distributes Ford cars in Turkey.
Sometimes Ford chooses and sometimes it is chosen for strategic alliances. The Russian car maker Sollers decided to end its plans for a joint venture with Fiat, and instead partner with Ford in early 2011; according to Sollers, Ford is more popular in Russia than Fiat. Russia is in the eighth position in the global auto market. The 50/50 joint venture known as Ford Sollers will invest approximately €800 million (more than $1 billion) to build an engine factory.
The Ford family owns more than 42% of the company's Class B stock.