This study will review and assess some of the recent financial results of the Ford Motor Company. The primary objective will be identifying some of the notable factors impacting Ford's fiscal performance - in the short run - and helping bolster its financial vitality over the long term. To accomplish this, a critical assessment of Ford's considerable operating strengths and debilitating weaknesses is essential. More specifically, requiring special scrutiny are issues related to profitability.
Throughout most of this decade, financial results for the Ford Motor Company have continuously disappointed both investors in the company and financial analysts who monitor its performance. Due to a combination of excessively high production costs, long development times, and the inefficient usage of resources, Ford has been largely unable to earn respectable profits from the sales of its automobiles. Under the leadership of CEO Alfred Trotman, however, Ford is now focusing on globalization and a more efficient use of resources to enable them to return to profitability. The Ford Motor Company expects that the new strategy - an integral component of Trotman's Ford 2000 plan - will result in huge reductions in production costs and overall development time of new products in the future.
According to the most recent financial results for the automobile manufacturer, the strategy may be paying off. First-quarter earnings for Ford reached $1.47 billion, more than double the $653 million it had made in 1996. Moreover, profits from Ford's U.S. automotive operations - which contribute about two-thirds of its total automotive revenue - reached $836 million, a dramatic improvement from the $48 million in profits it had earned during the same period last year. Ford's first-quarter profits from worldwide automotive operations also rose sharply, reaching $1 billion, from the $142 million it had earned in the prior year, largely as a result of strong sale...