strategic-management

carrying over $1 billion in goodwill, which is not good. Nor is its $154 billion in long-term
debt a good thing. The company may be doing better than some of its rival firms, but make
no mistake, Ford is in financial trouble.
Ford produces energy hybrid vehicles and has joined forces with British Petroleum
(BP) to develop hydrogen power. Ford’s Rouge Center in Dearborn, Michigan, represents the
world’s largest living roof and covers the Dearborn Truck Plant’s final assembly building.
Competitors
Chrysler LLC
Founded in 1883, Chrysler LLC (www.chryslerllc.com) currently holds 10.9 percent of the
U.S. market share as of February 2009. At the conclusion of fiscal 2008, Chrysler
employed approximately 54,007 employees. A privately owned company, Cerberus
Capital Management, currently owns 80.1 percent of Chrysler, with the remainder owned
by Daimler, the former parent company of Chrysler. The company manufactures seven
different models, including Jeep and Dodge. Chrysler LLC also owns Global Electric
Motorcars (GEM), low-speed vehicles often used in parks and industrial campuses. The
company sells parts and vehicle accessories under a MOPAR brand name and has a
Chrysler Financial division, which offers financing opportunities for buyers in North
America, Puerto Rico, and Venezuela.
Chrysler received $9 billion in bailout monies from the United States, with a
possibility of needing an extra $3 billion. It reportedly used up $3 billion in cash in the
last quarter of 2008. Headed by previous CEO of Home Depot, Robert Nardelli,
Chrysler had requested $7 billion in “bridge funding” to save the company.
Chrysler has contracted with Nissan and Volkswagen to manufacture cars. This costsaving
strategy, coupled with speculations of Envi, an electric car, and smaller cars built by
Nissan, are expected to improve the firm’s financial position. Chrysler’s sales in February
2009 as compared to February 2008 were down 44 percent.
General Motors Corporation (GM)
Headquartered in Detroit, Michigan, GM (www.gm.com) employs approximately 244,500
and reported annual revenues of $149 billion in 2008 as compared to $181 billion in 2007.
GM manufactures cars and trucks in 34 countries. GM also operates a Financing and
Insurance Operation. Saab, Pontiac, and Cadillac are among the many GM models. GM holds
an industry leading 18.8 percent of the U.S. market share as of February 2009. GM’s sales in
February 2009 when compared to the prior year were down by 53 percent.
GM experienced a steady decline in sales and received an $18 billion (with more
requested) government bailout from the United States. GM’s Saab division in Sweden
is attempting to isolate itself from GM to avoid the country losing a carmaker. Saab’s
units-sold in 2008 were down 34.7 percent compared to 2007. GM has plans to phase
out its Saturn and Hummer brands. The plans also call for reducing Pontiac production.
GM has been criticized for not adapting its cars and production system to address the
needs of consumers. The future of GM is reliant on hybrid electric Chevy Volt along with
models such as the Malibu. GM’s cars have produced negative sales figures, such as a
50.9 percent reduction in Hummer units sold in 2008 as compared to 2007. Chevrolet,
Cadillac, GMC, and Buick have ranged from 20.4 percent to 26.2 percent reduction in
units sold in 2008 compared to the previous year. GM’s goal is to have a production-ready
fuel-cell vehicle by 2010.
Toyota Motor Corporation
Headquartered in Toyota City, Japan, Toyota Motor Corporation (www.toyota.co.jp)
reported annual revenues of $249.5 billion in 2008. Toyota currently holds 16.9 percent of
the U.S. market share as of February 2009. The company has 316,212 employees and was
founded in 1933. It was ranked by J.D. Power and Associates as number one in customer
loyalty, with 68.9 percent of new purchases whose previous new vehicle was from Toyota.
Not all of Toyota’s makes and models are manufactured in America; the company has
production plants across the globe.
CASE 18 • FORD MOTOR COMPANY — 2009 181