Ford's risk management program recognizes the unpredictability of markets and seeks to reduce profit volatility. Ford monitors and manages these exposures as an integral part of its overall risk management program. This includes regular reports to a central management committee that oversees global risk management practices.
Ford
Motor (Ford) is one of the leading automobile
manufacturers in the world. Ford has two broad business
segments: Automotive and financial services. The
automotive segment includes the designing, manufacturing
and sale of a variety of cars, trucks, and Sport-Utility
Vehicles (SUVs). The company's famous brands include
Ford, Mercury, Lincoln, Jaguar, Mazda, Volvo, Land
Rover, and Aston Martin. Ford also participates in the
financial services industry through Ford Motor Credit
Company and The Hertz Corporation. The Ford Motor Credit
Company is the world's largest auto financing company.
Ford offers credit services in over 300 locations around
the world. Hertz offers rental services.
The
automotive market is highly competitive. The major
players compete on the basis of product quality,
advertising, promotion and price. Despite being a firm
in strong financial health and rich with growth
opportunities, Ford faces several risks. First,
competition in the industry, often leads to price wars.
In addition, the stagnant economic conditions facing
America could lead to a decline in sales and leases in
US and abroad as other economies begin to slow. A third
risk facing Ford stems from its relationship with the
United Auto Worker's union. In the past, striking
workers have halted production at plants across the
world. A fourth risk facing Ford results from litigation
against the company. In the recent past, deaths caused
by Ford's use of certain Firestone Tires resulted in
lost sales, as well as a tarnished reputation. A fifth
risk arises from defects and recalls of cars. Another
risk Ford faces stems from government policies. Ford may
have to undertake expensive projects in order to comply
with any new government regulations.
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