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Ford Motor Company

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'''The Ford Motor Company''' (often referred to as Ford; sometimes nicknamed FoMoCo), NYSE: [http://www.nyse.com/about/listed/lcddata.html?ticker=F F] is a multinational corporation that manufactures automobiles. The automaker was founded by Henry Ford in Dearborn, Michigan, United States (where the company is currently headquartered), and incorporated on June 16, 1903. In its 20th century heyday, Ford, along with [[General Motors Corporation|General Motors]] and [[Daimlerchrysler AG|Chrysler]], were known as Detroit's "Big Three" automakers, companies that dominated the American auto market. [[Toyota Motor Corporation|Toyota]] surpassed Ford in revenue starting in 2004. Ford remains one of the world's ten largest corporations by revenue. '''The Ford Motor Company''' (often referred to as Ford; sometimes nicknamed FoMoCo), NYSE: [http://www.nyse.com/about/listed/lcddata.html?ticker=F F] is a multinational corporation that manufactures automobiles. The automaker was founded by Henry Ford in Dearborn, Michigan, United States (where the company is currently headquartered), and incorporated on June 16, 1903. In its 20th century heyday, Ford, along with [[General Motors Corporation|General Motors]] and [[Daimlerchrysler AG|Chrysler]], were known as Detroit's "Big Three" automakers, companies that dominated the American auto market. [[Toyota Motor Corporation|Toyota]] surpassed Ford in revenue starting in 2004. Ford remains one of the world's ten largest corporations by revenue.

Revision as of 17:59, 20 November 2007

The Ford Motor Company (often referred to as Ford; sometimes nicknamed FoMoCo), NYSE: F is a multinational corporation that manufactures automobiles. The automaker was founded by Henry Ford in Dearborn, Michigan, United States (where the company is currently headquartered), and incorporated on June 16, 1903. In its 20th century heyday, Ford, along with General Motors and Chrysler, were known as Detroit's "Big Three" automakers, companies that dominated the American auto market. Toyota surpassed Ford in revenue starting in 2004. Ford remains one of the world's ten largest corporations by revenue.

Ford introduced methods for large-scale manufacturing of cars, and large-scale management of an industrial workforce. Ford implemented the ideas of Eli Whitney, who developed one of the first assembly lines using interchangeable parts, which made it possible to put the cars together at a much lower cost and with greater reliability and repeatability. The use of a chain-driven track to move the vehicles to the workers was unique in the industry and quickly became the preferred method for volume production. As the individual work tasks became simple and repetitive this allowed the use of unskilled laborers who could be quickly trained for a single task (though it also removed most of the satisfaction that a worker performing multiple tasks may enjoy).

Contents

Early History

Ford assembly line (1913)
Ford assembly line (1913)

Ford was launched from a converted wagon factory, with $28,000 cash from twelve investors. During its early years, the company produced just a few cars a day at the Ford factory on Mack Avenue in Detroit. Groups of two or three men worked on each car from components made to order by other companies.

In 1908, the Ford company released the Ford Model T. The first Model Ts were built at the Piquette Plant. The company was forced to move production to the much larger Highland Park Plant to keep up with the demand for the Model T, and by 1913 had developed all of the basic techniques of the assembly line and mass production. Ford introduced the world's first moving assembly line on December 1 that year, which reduced chassis assembly time from 12½ hours in October to 2 hours, 40 minutes. However these innovations were not popular, and in order to stop the staff deserting the monotonous jobs, on January 5, 1914, Ford took the radical step of doubling pay to $5 a day, and cut shifts from nine hours to an eight hour day — moves that were not popular with rival companies, although seeing the increase in Ford's productivity, most soon followed suit.

By the end of 1913, Ford was producing 50% of all cars in the United States, and by 1918 half of all cars in the country were Model T's. Referring to the Model T, Henry Ford is reported to have said that "any customer can have a car painted any color that he wants so long as it is black." This was because black paint was quickest to dry; earlier models had been available in a variety of colors.

On January 1, 1919, Edsel Ford succeeded his father as president of the company, although Henry Ford still kept a hand in management. The Ford company lost market share during the 1920s due to the rise of consumer credit. The company's goal was to produce an inexpensive automobile that any worker could afford. To keep prices low, Ford (at the behest of its owner, Henry Ford) offered few features. General Motors and other competitors began offering automobiles in more colors, and with more features and luxuries. They also extended credit so consumers could buy these more expensive automobiles. Ford resisted following suit, insisting that such credit would hurt the consumer and the economy. Due to market constraints, however, the company finally gave in and followed its competitors' lead when on December 2, 1927, Ford unveiled the redesigned Ford Model A and retired the Model T.

In 1925, Ford expanded its reach into the luxury auto market through its acquisition of the Lincoln Motor Company, and the Mercury division was established in the 1930s to serve the mid-price auto market.

Henry Ford II
Henry Ford II

Post World War II developments

Henry Ford II, grandson of Henry Ford, served as President from 1945-1960, and as Chairman and CEO from 1960-1980. "Hank the Deuce" led Ford to became a publicly traded corporation in 1956; however, the Ford family maintained controlling interests in the company through a series of preferred stocks. In the 1950s, Ford introduced the Thunderbird. By 1967, Ford had expanded into Europe.

Harold Poling served as Chairman and CEO from 1990-1993. Alex Trotman was Chairman and CEO from 1993-1998, and Jacques Nasser served at the helm from 1999-2001. Henry Ford's great-grandson, William Clay Ford Jr., is the company's current Chairman of the Board and CEO.

New Directions for the 20th Century

William Clay Ford Jr, Ford's current CEO.
William Clay Ford Jr, Ford's current CEO.

In 2000, under the leadership of the current Ford chairman, William Clay (Bill) Ford, the Company stunned the industry (and pleased environmentalists) with an announcement of a planned 25 percent improvement in the average mileage of its light truck fleet — including its popular SUVs — to be completed by the 2005 calendar year. However in 2003, Ford announced that competitive market conditions, and technological and cost challenges, would prevent the company from achieving this goal. Ford did achieve significant progress toward improving fuel efficiency during 2005, with the successful introduction of the Hybrid-Electric Escape. The Escape's platform mate Mercury Mariner is also available with the hybrid-electric system in the 2006 model year—a full year ahead of schedule—due to high demand. The similar Mazda Tribute will also receive a hybrid-electric powertrain option, along with many other vehicles in the Ford vehicle line. Ford also continues to study Fuel Cell-powered electric powertrains, and is currently demonstrating hydrogen-fueled internal combustion engine technologies, as well as developing the next-generation hybrid-electric systems.

2005 bond downgrade

In May 2005, several bond rating agencies downgraded the bonds of Ford Motor Company to below investment grade (so called "junk bonds"). These downgrades were a recognition of high health care costs for an aging workforce and of the dependence of the company on profits from the sales of sport utility vehicles. Due to higher fuel prices, there has been a decrease in the profits on these vehicles owing to "incentives" (in the form of rebates or low interest financing), which were needed due to declining sales. Foreign manufacturers, not having the truck manufacturing capabilities to form a platform base for similar vehicles, have instead introduced so called "crossover" SUV's — vehicles built on an automobile or minivan platform rather than a truck chassis. These vehicles have proven to be very popular in the market, and Ford has introduced such vehicles as the Escape (including a Hybrid-Electric version), along with the similar Mercury Mariner and Mazda Tribute, and the Freestyle and Volvo XC70 and Volvo XC90 crossover SUVs. In the fall of 2006, Ford is scheduled to introduce the 2007 Ford Edge, Lincoln MKX, and Mazda CX-7. These vehicles were revealed at the 2006 North American International Auto Show and other car shows.

As far as the other non-truck models, many (with the notable exception of the 2005 Mustang) have been disadvantaged in the marketplace owing to a perception by buyers that foreign manufactures (especially Toyota , Honda) and Hyundai) deliver better value in terms of fuel economy, reliability, and build quality. These perceptions are reflected in the used car market by higher values for these foreign models. For owners who frequently trade in and for those who lease their vehicles, the resale values are reflected in substantial cost differences with domestic vehicles costing more in overall costs. However, Ford hopes to reverse this trend, with the introduction of the new 2006 Ford Fusion, Mercury Milan, and Lincoln Zephyr midsize cars, which are expected to compete well in this segment.

"The Way Forward"

Ford responded to the circumstances that lead to the bond downgrade by creating a plan to reduce the company's fixed capital costs while maintaining a special focus on cars and car-based crossover vehicles. Over time, it hopes to make more of its product line profitable instead of relying on a limited portion of the products for profit. Making good profits across the product line requires that the company reduce the costs of development and production, while introducing new products that connect with consumers.

In the latter half of 2005, Chairman Bill Ford asked newly-appointed Ford Americas Division President Mark Fields to develop a plan to return the company to profitability. Fields previewed the Plan, dubbed "The Way Forward", at the December 7, 2005 board meeting of the company; and it was unveiled to the public on January 23, 2006. "The Way Forward" includes resizing the company to match current market realities, dropping some unprofitable and inefficient models, consolidating production lines, and shutting down seven vehicle assembly plants and seven parts factories. Among these are plants in St. Louis Assembly (near St. Louis), Atlanta Assembly (near Atlanta), Batavia Transmission (Batavia, Ohio), Windsor Casting (Windsor, Ontario, Canada), and Wixom Assembly (Wixom, Michigan). Up to 30,000 hourly and salaried jobs (28% of the total workforce) in North America over the next six years are expected to be eliminated, which is comparable to similar cutbacks previously announced at General Motors. These cutbacks are consistent with Ford's roughly 25% decline in U.S. automotive market share since the mid-late 1990s.

Ford's realignment also included the sale of its wholly-owned subsidiary, Hertz Rent-a-Car to a private equity group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005. A joint venture with Mahindra and Mahindra Limited of India ended with the sale of Ford's 15 percent stake in 2005.

Brands and marques

A Ford Taurus, one of Ford's most recognizable North American models.
A Ford Taurus, one of Ford's most recognizable North American models.

Today, Ford Motor Company manufactures automobiles under the Lincoln and Mercury brand names. In 1958, Ford introduced a new marque, the Edsel, but poor sales led to its discontinuation in 1960. Later, in 1985, the Merkur brand was introduced; it met a similar fate in 1989.

Ford has major manufacturing operations in Canada, Mexico, the United Kingdom, Germany, Brazil, Argentina, Australia, China, and several other countries, including South Africa where, following divestment during apartheid, it once again has a wholly-owned subsidiary. Ford also has a cooperative agreement with Russian automaker GAZ.

Since 1989, Ford has acquired British nameplates Aston Martin, Jaguar, Daimler (div. of Jaguar), and Land Rover, and Volvo Cars from Sweden, as well as a controlling share (33.4%) of Mazda of Japan, with which it operates an American joint venture plant in Flat Rock, Michigan called Auto Alliance. It has spun off its parts division under the name Visteon. Its prestige brands, with the exception of Lincoln, are managed through its Premier Automotive Group.

Ford's non-manufacturing operations include organizations such as automotive finance operation Ford Motor Credit Company. Ford also sponsors numerous events and sports facilities around the nation, most noteably Ford Center in downtown Oklahoma City and Ford Field in downtown Detroit. It is also noteable that both facilities share design aesthetics in addition to their common name and similar downtown location.

Global markets

Initially, Ford models sold outside the U.S. were essentially versions of those sold on the home market, but later on, models specific to Europe were developed and sold. Attempts to globalize the model line have often failed, with Europe's Ford Mondeo selling poorly in the United States, while U.S. models such as the Ford Taurus have fared poorly in Japan and Australia, even when produced in right hand drive. The small European model Ka, a hit in its home market, did not catch on in Japan, as it was not available as an automatic. The Mondeo was dropped by Ford Australia, because the segment of the market in which it competes had been in steady decline, with buyers preferring the larger local model, the Falcon. One recent exception is the Focus; The European model has sold strongly on both sides of the Atlantic.

Europe

1970 Ford Cortina Mark 2
1970 Ford Cortina Mark 2

At first, Ford in Germany and the United Kingdom built different models from one another until the late 1960s, with the Ford Escort and then the Ford Capri being common to both companies. Later on, the Ford Taunus and Ford Cortina became identical, produced in left hand drive and right hand drive respectively. Rationalisation of model ranges meant that production of many models in the UK switched to elsewhere in Europe, including Belgium and Spain as well as Germany. The Ford Sierra replaced the Taunus and Cortina in 1982, drawing criticism for its radical aerodynamic styling, which was soon given nicknames such as "Jellymould" and "The Salesman's Spaceship".

Increasingly, Ford Motor Company has looked to Ford of Europe for its "world cars," such as the Mondeo, Focus, and Fiesta, although sales of European-sourced Fords in the U.S. have been disappointing. In Asia, models from Europe are not as competitively priced as Japanese-built rivals, nor are they perceived as reliable. The Focus has been one exception to this, which has become America's best selling compact car since its launch in 2000.

In 2001, Ford ended car production in the UK. It was the first time in more than eighty years that Ford cars had not been made in Britain, although production of the Transit van continues at the company's Southampton facility, engines at Bridgend and Dagenham, and transmissions at Halewood. Development of European Ford is broadly split between Dunton in Essex (powertrain, Fiesta/Ka and commercial vehicles) and Cologne (body, chassis, electrical, Focus, Mondeo) in Germany. Ford also produced the Thames range of commercial vehicles although the use of this brand name was discontinued circa 1965. It owns the Jaguar, Land Rover, and Aston Martin car plants in Britain which are still operational. Ford's Halewood Assembly Plant was converted to Jaguar production.

Elsewhere in continental Europe, Ford assembles the Mondeo range in Genk (Belgium), Fiesta in Valencia (Spain) and Cologne (Germany), Ka in Valencia and Focus in Valencia, Saarlouis (Germany) and St. Petersberg (Russia). Transit production is in Kocaeli (Turkey), Southampton (UK), and Transit Connect in Kocaeli.

Ford also owns a joint venture production plant in Turkey. Ford-Otosan, established in the 1970s, manufactures the Transit Connect compact panel van as well as the "Jumbo" and long wheelbase versions of the full-size Transit. This new production facility was set up near Kocaeli in 2002, and its opening marked the end of Transit assembly in Genk. Another joint venture plant near Setubal in Portugal, set up in collaboration with Volkswagen, assembles the Galaxy people carrier as well as its sister ship, the VW Sharan.

Asia Pacific

In Australia and New Zealand, the popular Ford Falcon is considered the typical (if not particularly economical) family car, though it is considerably larger than the Mondeo sold in Europe. Between 1960 and 1972, the Falcon was based on a U.S. Ford of that name, but since then has been entirely designed and manufactured locally. Like its General Motors Corporation rival, the Holden Commodore, the 4.0 liter Falcon retains rear wheel drive. High performance variants of the Falcon running locally-built engines produce up to 390bhp. A ute (short for "utility," known in the US as pickup truck) version is also available with a similar range of drivetrains. In addition, Ford Australia sells highly-tuned Falcon sedans and utes through its performance car division, Ford Performance Vehicles. These cars produce over 400bhp and are built in small numbers to increase their value as collectors' cars.

In both Australia and New Zealand, the Commodore and Falcon outsell all other cars. In Australia they comprise over 20% of the new car market.

Ford's presence in Asia has traditionally been much smaller. However, with the acquisition of a stake in Japanese manufacturer Mazda in 1979, Ford began selling Mazda's Familia and Capella (also known as the 323 and 626) as the Ford Laser and Telstar. The Laser was one of the most successful models sold by Ford in Australia, and outsold the Mazda 323, despite being almost identical to it. The Laser was also built in Mexico and sold in the U.S. as the Mercury Tracer, while the 1989 American Ford Escort was based on the Laser/Mazda 323. The smaller Mazda 121 was also sold in the U.S. and Asia as the Ford Festiva.

Through its relationship with Mazda, Ford also acquired a stake in South Korean manufacturer Kia, which later built the Ford Aspire for export to the United States, but later sold the company to Hyundai. Ironically, Hyundai also manufactured the Ford Cortina until the 1980s. Ford also has a joint venture with Lio Ho in Taiwan, which assembled Ford models locally since the 1970s.

Ford came to India in 1998 with its Ford Escort model, which was later replaced by locally produced Ford Ikon in 2001. It has since added Fusion, Fiesta, Mondeo and Endeavour to its product line.

South America

In South America, Ford has had to face protectionist government measures in each country, with the result that it built different models in different countries with no rationalisation or economies of scale. In some cases, it based its models on those of other manufacturers whose plants it had taken over. For example, the Corcel and Del Rey in Brazil were originally based on Renaults. In the 1980s, Ford merged its operations in Brazil and Argentina with those of Volkswagen to form a company called Autolatina, with which it shared models.

Autolatina was dissolved in the 1990s. With the advent of Mercosur, the regional common market, Ford was able to rationalise its product line-ups in those countries. Consequently, the Ford Fiesta is only built in Brazil, and the Ford Focus only built in Argentina, with each plant exporting in large volumes to the neighbouring country. Models like the Ford Mondeo from Europe could now be imported completely built up. Ford in Brazil produces a pick-up version of the Fiesta, which is also produced in South Africa, in right hand drive as the Ford Bantam.

Africa and Middle East

In Africa and the Middle East, Ford's market presence has traditionally been strongest in South Africa and neighbouring countries, with only trucks being sold elsewhere on the continent. Ford in South Africa began by importing kits from Canada to be assembled at its Port Elizabeth facility. Later Ford sourced its models from the UK and Australia, with local versions of the Ford Cortina including the XR6, with a 3.0 V6 engine, and a Cortina 'bakkie' or pick-up, which was exported to the UK. In the mid-1980s Ford merged with a rival company, owned by Anglo American, to form the South African Motor Corporation (Samcor).

Following international condemnation of apartheid, Ford divested from South Africa in 1988, and sold its stake in Samcor, although it licensed the use of its brand name to the company. Samcor began to assemble Mazdas as well, which affected its product line-up, which saw the European Fords like the Escort and Sierra replaced by the Mazda-based Laser and Telstar. Ford bought a 45 per cent stake in Samcor following the demise of apartheid in 1994, and this later became, once again, a wholly owned subsidiary, the Ford Motor Company of Southern Africa. Ford now sells a local sedan version of the Fiesta (also built in India and Mexico), and the Focus and Mondeo Europe. The Falcon model from Australia was also sold in South Africa, but was dropped in 2003.

Ford's market presence in the Middle East has traditionally been even smaller, partly due to previous Arab boycotts of companies dealing with Israel. Ford and Lincoln vehicles are currently marketed in ten countries in the region. [1] Saudi Arabia, Kuwait, and the UAE are the biggest markets. [2] Ford's distributor in Saudi Arabia announced in February 2003 that it had sold 100,000 Ford and Lincoln vehicles since commencing sales in November 1986. Half of the Ford/Lincoln vehicles sold in that country were Ford Crown Victorias. [3] In 2004, Ford sold 30,000 units in the region, falling far short of General Motors' 88,852 units and Nissan Motors' 75,000 units. [4]

Alternate fuel vehicles

Ford Escape Hybrid
Ford Escape Hybrid

Bill Ford was one of the first top industry executives to make regular use of an battery electric vehicle, a Ford Ranger EV, while the company contracted with the United States Postal Service to deliver electric postal vans based on the Ranger EV platform. Many Ford vehicles now sport an emblem; a green leaf springing from a curving road-like twig; symbolic of the new "green" commitment to preserve the environment and reduce resource consumption, while delivering safe, economical, and effective products to the motoring public. Vehicles with this emblem are generally alternative fuel or flexible-fuel vehicles. The alternative fuel vehicles, such as some versions of the Crown Victoria especially in fleet and taxi service, operate on compressed natural gas - or CNG. Some CNG vehicles have duel fuel tanks - one for gasoline, the other for CNG - the same engine can operate on either fuel via a selector switch. Flexible fuel vehicles are designed to operate automatically on a wide range of available fuel mixtures - from pure gasoline, to ethanol-gasoline blends such as E85 (85% ethanol, 15% gasoline). Part of the challenge of successful marketing alternative and flexible fuel vehicles, is the general lack of establishment of sufficient infrastructure (fueling stations), which would be essential for these vehicles to be attractive to a wide range of consumers.

Ford was third to market with a hybrid car; the Ford Escape Hybrid, and the first to market with a Hybrid SUV / Crossover. The Hybrid Escape will also be the first hybrid vehicle to market with a Flexible Fuel capability to run on E85 ethanol-gasoline mixture [5]. The company is on track to selling 250,000 hybrids a year by 2010.

Ford hybrids:

  • 2004– Ford Escape Hybrid
  • 2006– Mercury Mariner
  • 2008– Ford Fusion/Mercury Milan
  • 2009– Ford Five Hundred/Mercury Montego
  • 2009– Ford Edge/Lincoln MKX

Criticism

Environmental Concerns

  • Campaign Action: Rainforest Action Network and Global Exchange are the sponsors of the Jumpstart Ford campaign, asking Ford to reclaim its position as an industry leader and produce the fuel efficient cars of the future. Consumers are encouraged to "Adopt a Dealer" and send the message to Ford that there is a healthy demand for fuel efficient and hybrid cars. The campaign gives consumers the tools they need to apply pressure at local dealerships, asking Ford to reach an average fleet fuel efficiency of 50 miles per gallon by 2010. While the campaign's primary target is Ford, major auto makers such as General Motors Corporation, Toyota Corporation, Honda, Nissan and DaimlerChrysler AG are also implicated. Source: Rainforest Action Network
  • Campaign Action: Sierra Club’s Clean Cars Campaign is one critical part of its national efforts to curb global warming. The campaign focuses on General Motors and Ford, educating the public about the poor gas mileage of these companies’ vehicles, the level of pollution (particularly greenhouse gases) these companies are responsible for, and continued corporate resistance to improving fuel standards. The campaign calls for citizen action to pressure GM and Ford to improve their environmental standards. Source: Sierra Club
  • Global Warming: The Alliance of Automobile Manufacturers, a lobbying group of which Ford is an important member, filed a lawsuit in against two state agencies in Oregon to contest the state’s proposed adoption of the Clean Cars program. The industry-opposed program includes measures to raise emissions standards to levels that would significantly reduce greenhouse gas pollution in Oregon. Source: California Clean Cars Campaign
  • Toxics: In 2001 twenty-six state attorney generals asked Ford to remove mercury switches from their vehicles due the toxic persistent nature of mercury and its vapors. Although General Motors and DaimlerChrysler were also cited as continuing to use mercury compounds in car manufacturing, Ford was the only vehicle manufacturer to receive the request. "Ford is in the early stages of a very large recall of vehicles," said a press aide to New York Attorney General Eliot Spitzer, who signed the letter. "The timing would be right for Ford to replace a large number of mercury switches, as it will be recalling about 3 million cars due to potentially faulty tires." Environmental Defense's Clean Car Campaign estimates there are 200 tons of mercury in cars and trucks currently on the road. Source: CNN
  • Greenhouse Gas Emissions: The American Council for an Energy-Efficient Economy listed the Ford Excursion and the Land Rover Range Rover on their 2005 “Meanest Vehicles” list, a ranking of the twelve most polluting vehicles of the year. The ACEEE ranks vehicles based on tailpipe emissions, fuel consumption, and the emissions of gases that cause global warming. Source: GreenBiz

Animal Welfare

  • Animal Welfare: In 2002, PETA declared an action alert against Ford Motors and other automakers, urging the public to send letters to the company’s CEO, condemning the use of leather its cars. PETA has condemned the unnecessary torture to which cows raised for leather are subjected: "Most of the millions of animals slaughtered for their skin are made to endure the horrors of factory farming, overcrowding, deprivation, unanesthetized castration, branding, tail-docking, and dehorning. At the end of their miserable lives, they have their throats slit, are hung upside-down, and are bled to death. " Source: PETA

Worker's Rights

  • Equal Opportunity: According to the Social Investment Research Analyst Network (SIRAN), ten years after the Federal Glass Ceiling Commission recommended disclosure of diversity data as a way to remove barriers and promote women and minority advancement, most US companies still fail to fully disclose EEO data to the public. Ford is listed as one of the companies that does not provide full public disclosure. The company did not respond to a survey for information sent by SIRAN. Source: Social Investment Research Analyst Network (SIRAN)
  • Shareholder Resolutions: The New York City Employees Retirement System (NYC Pension Funds), that holds all of these companies in its portfolio, has filed a resolution with each company asking for the development of a code of conduct that is based on the International Labor Organization's core labor standards and the UN's Draft Norms on the Responsibilities of Transnational Corporations with Regards to Human Rights. ILO conventions include the right to form and join a union, a prohibition on discrimination and intimidation, and prohibition against forced labor, child labor, and prison labor. Source: Interfaith Center for Corporate Responsibility
  • Workforce Reduction: On January 23, 2006, Ford announced plans to cut as many as 30,000 jobs and reduce vehicle production by 20% in an effort to streamline the company. Source: BBC News
  • Discrimination: Ford Motor has agreed to pay $300,000 to 23 black plant workers at Ford's New Model Development Center in Allen Park, Michigan. The workers filed a federal racial harassment lawsuit against Ford after a white co-worker "mocked what he considered to be African-American styles of speech and manner of walking." The employee also used inappropriate language and hung nooses from his forklift. The man was suspended without pay for one month. Source: Associated Press
  • Discrimination: A Ford employee of Syrian descent filed a discrimination lawsuit against the company in September 2002 claiming a pattern of terrorism-themed harassment by co-workers at a Michigan plant. The employee says that the harassment climaxed during the first year anniversary of the September 11th terrorist attacks and that his complaints to the company's "harassment hotline" went unheeded. He is seeking $25,000 in civil damages. Source: Macomb Daily
  • Sexual Harassment: In 2001 Ford agreed to pay $7.5 million in a settlement with two women from Chicago plants who claimed they were harassed on the job. Female employees reported that there was an ongoing problem with sexual harassment and claimed that harassment was widely accepted on the factory floor and that complaints are generally ignored. Ford has since begun a $27 million training program to provide all employees with sexual harassment education. Source: U.S. Equal Employment Opportunity Commission
  • Discrimination: In February 2001, nine company executives filed a discrimination lawsuit against Ford, claiming the company's new evaluation process was designed to weed out older workers. The evaluation program, which started in January, graded executives on a Bell Curve. Those with "C" grades not eligible for a raise or bonus and receiving a "C" for two consecutive years is grounds for demotion or termination. Source: WorldNetDaily
  • Discrimination: In July 2001 the American Association of Retired Persons (AARP) publicly said it would support a lawsuit filed against Ford saying that the company discriminates against older white collar employees. The AARP agreed with claims that Ford was using a two-year-old employee grading system to unfairly rid itself of older management-level staff. "It looks like a way of targeting older workers, said an AARP spokesperson. Source: AARP
  • Maquiladora: Ford Motor operates maquiladoras, foreign-owned assembly plants in Mexico where companies import machinery and materials duty-free. Source: CorpWatch

What's wrong with Maquiladoras?

  • Outsourcing: In October 2003, Ford announced it would invest as much as US $1.5 billion in China over the next several years to expand manufacturing capacity at Changan Ford in Chongqing, Sichuan province, from the current 20,000 units a year to 150,000. Ford announced that it planned to add a second car plant and a new engine plant. As of October 2003, the Chongqing factory had the capacity to assemble approximately 50,000 units per year. Source: Friednet
  • Sexual Harassment: In June 2001, the Equal Employment Opportunity Commission (EEOC) filed a discrimination suit against a Ford dealership in Amarillo Texas alleging six male former car salespeople were sexually harassed by a male supervisor and that when the salesmen complained to management, the company did not take corrective or preventive action, as the law requires. An EEOC news release accused the supervisor of, "Grabbing the salesmen's genitals and buttocks, asking for sexual favors and making inappropriate comments of a sexual nature." The dealership, Ron Clark Ford, denied the events ever occurred. Source: U.S. Equal Employment Opportunity Commission
  • Workforce Reduction: In February 2004, the Ford Motor closed its Edison, NJ plant, leaving 845 workers without jobs. In all manufacturing, New Jersey has lost 241,000 jobs, or about 40 percent, since 1990. Source: Associated Press

Business Ethics

  • Health and Safety: In December 2002 Ford agreed to pay $51.5 million to settle U.S. state government claims it misled consumers about the safety of its sport utility vehicles while also failing to disclose known tire failure risks. The claims against Ford stemmed mostly from Firestone tire failures, which U.S. safety regulators have linked to about 270 deaths, many in rollover accidents involving Ford's Explorer SUV. Ford denied any wrongdoing. Source: Reuters
  • Fraud: In April 2003 the South Carolina Supreme Court said that the estate of a man whose leg was crushed in a 1990 Bronco II rollover could seek to reopen a case he lost a decade ago. In its ruling the court said that claims by the victim's lawyers that Ford paid the expert witness, David Bickerstaff, a former Ford engineer, to testify falsely on its behalf were a basis for re-opening the case. In 2001 a federal judge in a West Virginia case found that there was evidence of a "conspiracy" between Ford and Mr. Bickerstaff to mislead the court. Two days later the company settled that case, which involved a fatality. Source: New York Times
  • Health and Safety: In October 2001 Ford agreed to pay up to $2.7 billion to repair faulty ignition systems that are believed to have caused 11 deaths and 31 injuries. Through the settlement, the company admitted no wrongdoing, but agreed to reimburse owners who had the ignition systems repaired as long as the vehicles had less than 100,000 miles on them at the time of the repair. A California Superior Court judge had ruled that the company knew the ignition system failed as early as 1982 but did not notify the public and denied any problems with the system to federal regulators. Source: SFGate.com (San Francisco Chronicle)
  • Legal Disputes: In October 2003, Ford was ordered to pay a $45 million jury verdict due to a lap belt's alleged failure to protect a child from serious injury. The suit, filed on the behalf of a 5-year-old boy who was rendered paraplegic in an auto accident, took seven years to get to a jury. Lawyers for the prosecution searched Ford documents dating back to the 1960s for documentation of the company’s lap belts. At the trial, they presented internal Ford memos and crash test reports allegedly showing the company knew about the flaws in its lap belt for 20 years. Source: Center for Auto Safety
  • Legal Disputes: In March 2004, a Mississippi jury ordered Ford Motors to pay $12.5 million to the family of three people who burned to death when the fuel tank of their Ford F150 pickup truck exploded in flames after a collision. The lawsuit, filed by survivors of the deceased, alleged that Ford did not follow its own safety standards for the pickup and that the explosion was caused by the vehicle's rear axle puncturing the gas tank. Source: St. Louis Business Journal
  • Legal Disputes: Ford reached an agreement with the Justice Department on the recall of at least 50,000 Econoline vans as a result of emission-control violations. As part of the $7.8 million settlement, Ford agreed to pay $2.5 million in civil penalties and spend another $5.3 million on environmental programs. Violations occurred because of higher tailpipe emissions resulting from efforts to increase the van's fuel economy. Source: Environmental Protection Agency
  • Products: In January 2004 U-Haul announced that it would no longer rent trailers to customers driving Ford Explorers, citing excessive costs in defending liability lawsuits. The company said the decision was not based on safety concerns, and stated "U-Haul has chosen not to rent behind this tow vehicle based on our history of excessive costs in defending lawsuits involving Ford Explorer towing combinations." Source: Associated Press

thics Ford was named one of the Ten Worst Corporations of 2000 by Focus on the Corporation, which claims Ford and Firestone knew of at least 35 deaths and 130 injuries related to tread separation on Firestone tires resulting in accidents involving Ford Explorer SUVs before the government's probe in 2000. At least 5 lawsuits were filed against the companies for tread-related rollovers by 1993, with many others following. Almost all of the suits were settled with gag orders barring attorneys and families from disclosing information about cases to the public or the Department of Transportation. Source: Mother Jones

  • Executive Compensation: In 2004, Chairman and CEO William Clay Ford earned $22,185,692 in total compensation including stock option grants from Ford Motor. Ford has another $16,150,975 in unexercised stock options from previous years. Source: AFL-CIO

How Much do CEOs Earn?

  • Health and Safety: In June 2002 Ford came under scrutiny after the third Arizona policeman in four years died when his Crown Victoria police cruiser burst into flames after being struck. Highway safety groups say that the fuel tanks are positioned in a way that makes them vulnerable during high-speed rear-end collisions. The groups blame the tanks for the deaths of at least 10 officers nationwide. The company has settled three lawsuits for undisclosed sums involving the Crown Victoria's fuel tanks. According to a lawyer representing plaintiffs in these cases, the Crown Victoria's fuel tanks are similar to those found in the Ford Pinto, which the federal government recalled in 1979 because of explosions. Ford denies any problem with the car's fuel tank placement saying the number of rear-collision fires involving the Crown Victoria police cruisers is comparable to incidents for other makes and models. The company also says it is looking closely into how the vehicles are used by the Arizona police force. In September 2002 Ford announced it would install shields around the car's fuel tanks. Source: Crown Victoria Safety Alert
  • Legal Disputes: In May 2001, a California state appeals court upheld a $26 million verdict made in 2000 against Ford Motor in the case of a driver whose Bronco II sport utility vehicle flipped in 1996, leaving him a quadriplegic unable to breathe without a ventilator. Ford had argued that the rollover could have been caused by the force of the accident rather than vehicle design, but the court rejected that argument. The plaintiff, who was held by the jury partially responsible for the accident, had died several months after the original verdict from complications from the automobile accident. Source: Reuters

Human Rights

  • Human Rights: In November 2002 a lawsuit was filed againt Ford and 19 other companies for reparations because of alleged support to the apartheid regime that ruled South Africa until 1994. The case, which was filed by the Khulumani Support Group, seeks compensatory and punitive damages for more than 32,000 South Africans hurt by apartheid. As of June 2004, the case was unresolved. Source: OneWorld U.S.

Political Influence

  • Corporate Influence: Ford, along with other major automakers and the United Auto Workers (UAW), opposed a congressional bill to raise the average fuel economy standards to 35 miles per gallon by 2013. The automakers believe that this would harm the SUV, pickup, and minivan industry. Source: San Francisco Chronicle

Praise

  • Greenhouse Gas: Emissions Ford is a founding member of the Chicago Climate Exchange, a voluntary market-based effort to reduce greenhouse gases by allowing participants to swap the right to pollute in a four-year pilot project. Through the plan, each company registers their allotted emissions allowance with the Chicago Climate Exchange. Those who emit below target can sell allowances to those who are above target, putting both companies within the emissions limit. The 14 Chicago Climate Exchange members produce about 270 million tons of six different greenhouse gases. They have agreed to reduce or offset their greenhouse gas emissions by 1 percent below baseline for 2003 through 2006. By 2006 the companies are expected to be 4 percent below the baseline target. Source: Chicago Tribune
  • Diversity: Ford Motors has been Praised for its Pro-Diversity Measures:
    • Ford achieved a perfect score of 100 on the Human Rights Campaign 2004 Corporate Equality Index which rates large corporations on policies that affect their gay, lesbian, bisexual and transgender employees, consumers and investors. The 2003 HRC Corporate Equality Index rated companies on a scale of 0 percent to 100 percent on seven factors. The company achieved a score of 86 on the organization's 2003 Corporate Equality Index.
    • Ford Motor has signed the MacBride Principles, a religious non-discrimination code of conduct for companies doing business in Northern Ireland.
    • Ford Motor has a non-discrimination policy that includes sexual orientation.
    • Ford Motor has been praised for assisting in the advancement of small, minority-owned businesses. The company claims to create 3 or 4 new business relationships with minority-owned suppliers each year. Source: Human Rights Campaign
  • Environmentally-friendly Initiatives: In May 2004, The Ford Motor Company announced an overhaul of its River Rouge complex, focusing on environmental improvements. The upgrades include a “living roof” that will help heat and cool the building, as well as solar collectors that will heat water and generate electricity. Company officials also expressed enthusiasm that other plants might undergo the same changes. Source: Ethical Corporation
  • Greenhouse Gas Emissions: In July 2003 Ford announced that the average fuel economy of the company's sport utility vehicles would be worse for the 2003 model year than the previous year. The 2002 models were 8.4 percent more efficient than the ones the company made in the 2000 model year. But the 2003 models are only 5.2 percent more efficient than those made in the 2000 model year, according to the company. Earlier the company said it could not meet a pledge to raise the fuel economy of its sport utility vehicles by 25 percent from 2000 to 2005. Source: U.S. Department of Energy
  • Sustainability: Ford Motor Company has endorsed the Coalition for Environmentally Responsible Economies (CERES) Principles, a 10-point code of environmental conduct. Source: ResponsibilityInc.

What are the "CERES" Principles?

  • Sustainability: Ford Motor has committed to comply with the Sustainability Reporting Guidelines, a "framework for voluntary reporting of the economic, environmental, and social impact" of corporate practices. The Guidelines were developed by the Global Reporting Initiative (GRI), formed by the Coalition for Environmentally Responsible Economies (CERES) and the United Nations Environment Programme, in an effort to increase the level of sustainability reporting. Source: Global Reporting Initiative
  • Community Involvement: As a result of 1999 contract talks between Ford and the United Auto Workers Union, three child and family care centers were dedicated in Michigan in 2001. The Family Service and Learning Centers are opened for use by any current or former Ford workers and provide free library and computer services and fee-based child care and classes. The classes range from driver education, tax planning, parenting techniques, self-defense and home repair. The 30,000 square foot centers are the first of 17 centers planned in Michigan, Ohio, Missouri, Kentucky and Illinois. Ford, the UAW and Visteon Corp., a automotive components company that spun off from Ford in 2000, are sharing the costs for the centers. Source: Associated Press
  • Corporate Influence: Ford Motor pulled out of the Global Climate Coalition, a lobbying group that opposes the Kyoto climate treaty on the grounds that there is insufficient evidence to prove climate change exists. A Ford spokesman stated: "Over time being in the GCC has become something of an impediment to pursuing our environmental initiatives in a credible way." Source: Fox Market News
  • Diversity Ford: received a "B-" grade on the 2004 NAACP Economic Reciprocity Initiative report. The grade reflects a measurement of corporate America's commitment to the African American citizenry and other people of color. Companies were surveyed for their activity in employment, vendor development and contracting, advertising and marketing, dealerships and philanthropy. Source: NAACP
  • Environmentally-friendly Initiatives: On February 2005 the state of Florida announced an agreement with ChevronTexaco Hydrogen Co. and Ford Motor Co., to construct a hydrogen energy station to fuel Ford hydrogen internal combustion engine shuttles for use at the Orlando International Airport. Source: GreenBiz
  • Global Warming: The Ford Escape Hybrid was named as one of the twelve greenest vehicles of the year by the American Council for an Energy-Efficient Economy in February 2005, marking the first time ever a gasoline-powered SUV has achieved a spot on the ACEEE’s list. The Ford Focus and Focus Wagon also were listed amongst the top twelve. The ACEEE ranks vehicles based on tailpipe emissions, fuel consumption, and the emissions of gases that cause global warming. Source: GreenBiz

Brands

Ford Motor Company Brands include:

Aston Martin
Ford
Jaguar
Land Rover
Lincoln
Mazda
Mercury
Volvo

Subsidiaries

Ford Motor Company owns the following companies:

AB Volvofinans - Gothenburg, Sweden
American Renaissance Insurance Company - Dearborn, MI
American Road Services Co. - Dearborn, MI
APCO Automobile Protection Corporation - Norcross, GA
Aston Martin Lagonda - Newport Pagnell, United Kingdom
Aston Martin Lagonda Limited - Gaydon, United Kingdom
Aston Martin Lagonda of North America, Inc. - Irvine, CA
Aston Martin Lagonda of North America, Inc. - Mahwah, NJ
Blue Oval Holdings - Brentwood, United Kingdom
Consorcio Nacional Ford Ltda. - Guarulhos, Brazil
Cosworth Racing Inc. - Torrance, CA
Dearborn Capital Corporation - Dearborn, MI
Deslauriers Ford Lincoln, Inc. - Laval, Canada
Detroit Downtown Development Corporation - Dearborn, MI
Fairlane Credit LLC - Dearborn, MI
Fairlane Golf Inc. - Dearborn, MI
FCE Bank Plc - Brentwood, United Kingdom
FCE Bank Plc - Salzburg, Austria
FMC Automobiles SAS - Saint Germain-en-Laye, France
Ford Asia-Pacific, Inc. - Dearborn, MI
Ford Auto Club, Inc. - Dearborn, MI
Ford Automotive Holdings - Brentwood, United Kingdom
Ford Colorado Properties, Inc. - Dearborn, MI
Ford Communications, Inc. - Dearborn, MI
Ford Credit A/S - Ballerup, Denmark
Ford Credit Australia Limited - Melbourne, Australia
Ford Credit Australia Wholesale Limited - Melbourne, Australia
Ford Credit Auto Receivables Corporation - Dearborn, MI
Ford Credit B.V. - Amsterdam, Netherlands
Ford Credit Canada Ltd. - Oakville, Canada
Ford Credit de Mexico S.A. de C.V. - Mexico, Mexico
Ford Credit de Puerto Rico, Inc. - San Juan, PR
Ford Credit Europe plc - Saint Albans, United Kingdom
Ford Credit N.V. - Antwerp, Belgium
Ford Credit Portugal - Lisbon, Portugal
Ford Credit S.A. - Alcobendas, Spain
Ford Credit S.A. - Wallisellen, Switzerland
Ford Credit SpA - Rome, Italy
Ford Espana S.A. - Alcobendas, Spain
Ford Essex Engine Plant - Windsor, Canada
Ford Finance Company of Japan, Limited - Tokyo, Japan
Ford France Automobiles S.A.S. - Saint Germain-en-Laye, France
Ford Glass & Metal, Inc. - Dearborn, MI
Ford Global Technologies Inc. - Dearborn, MI
Ford Industria e Comercio Ltda. - Guarulhos, Brazil
Ford International Capital Corporation - Dearborn, MI
Ford International Export Sales - Dearborn, MI
Ford International Services, Inc. - Dearborn, MI
Ford Investment Partnership - Dearborn, MI
Ford Italia S.p.A. - Rome, Italy
Ford Land - Dearborn, MI
Ford Leasing SpA - Rome, Italy
Ford Lio Ho Motor Co - Taoyuan, Taiwan
Ford Lusitana - Lisbon, Portugal
Ford Motor Austria - Salzburg, Austria
Ford Motor Belgium N.V. - Antwerp, Belgium
Ford Motor Company A/S - Ballerup, Denmark
Ford Motor Company AB - Goteborg, Sweden
Ford Motor Company Limited - Brentwood, United Kingdom
Ford Motor Company of Australia Limited - Campbellfield, Australia
Ford Motor Company of Canada, Limited - Oakville, Canada
Ford Motor Company of New Zealand Ltd. - Auckland, New Zealand
Ford Motor Company of Southern Africa (Pty) Limited - Pretoria, South Africa
Ford Motor Company Switzerland S.A. - Wallisellen, Switzerland
Ford Motor Credit Company - Dearborn, MI
Ford Motor Credit Company - Dublin, Ireland
Ford Motor Credit Company International - Dearborn, MI
Ford Motor de Venezuela, S.A. - Valencia, Venezuela
Ford Motor Dealership Facilities Co. - Dearborn, MI
Ford Motor Japan Ltd. - Tokyo, Japan
Ford Motor Land Development Corporation - Dearborn, MI
Ford Motor Land Services Corp. - Dearborn, MI
Ford Motor Norge A/S - Kolbotn, Norway
Ford Netherlands - Amsterdam, Netherlands
Ford of Europe, Inc. - Dearborn, MI
Ford Plastic & Trim Products International, Inc. - Dearborn, MI
Ford Tauro Auto Center - Curacao, Netherlands Antilles
Ford VHC AB - Goteborg, Sweden
Ford Vietnam Limited - Hanoi, Vietnam
Ford Werke AG - Genk Branch - Genk, Belgium
Ford-Werke GmbH - Cologne, Germany
Granite Management Corp. - Newport Beach, CA
Greenleaf LLC - Tampa, FL
Henry Ford & Sons Ltd - Cork, Ireland
Hertz Equipment Rental Corporation - Park Ridge, NJ
Jaguar Canada Inc. - Brampton, Canada
Jaguar Cars - Irvine, CA
Jaguar Cars Limited - Coventry, United Kingdom
Land Rover (Subsidiary) - Gaydon, United Kingdom
Land Rover North America - Irvine, CA
Lincoln-Mercury World Headquarters - Irvine, CA
Manhattan Automobile Company - New York, NY
Oy Ford Ab - Helsinki, Finland
Pacific Bay Homes, LLC - Newport Beach, CA
PAG Import, Inc. - Tokyo, Japan
Parkway Ford Sales 1996 Ltd. - Waterloo, Canada
Percepta LLC - Dearborn, MI
Premier Automotive Group - London, United Kingdom
Primus Automotive Financial Services, Inc. - Franklin, TN
Renaissance Center Venture - Dearborn, MI
Sanford Ford Lincoln-Mercury - Sanford, NC
The Aegis Group, Inc. - Norcross, GA
The American Road Insurance Company - Dearborn, MI
The Egyptian Trading & Industrial Co. (RAGAB) - Cairo, Egypt
The Hertz Corporation (Subsidiary) - Park Ridge, NJ
Triad Financial Corp. - Huntington Beach, CA
Volvo Car Corporation - Gothenburg, Sweden
Volvo Car Germany GmbH - Cologne, Germany
Volvo Car UK Limited - Marlow, United Kingdom
Volvo Cars NV - Gent, Belgium
Volvo Cars of North America LLC - Irvine, CA
Volvo Cars of North America LLC - Rockleigh, NJ
Volvo Personvagnar AB - Goteborg, Sweden
Volvo Personvagnar Holding AB - Goteborg, Sweden

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