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please respond to each student and use a reference please don’t start with I agree with you

Student 1 Natalie

Jim Hackett, Ford Motor Company’s CEO between 2017 and October 2020. Hackett lead Ford Motor Company through a transformation period of modernization and restructuring (Ford, 2020). During his time leading the company, Hackett focused on increasing revenue and reducing production costs. Hackett revitalized Ford Motor Company’s manufacturing capabilities and supply chain through innovation. Investments in autonomous driving, electric vehicles, and AI drove an increase in R&D budgets (Pratap, 2018). Implementing major changes requires a strategy of driving efficiencies. Hackett focused on financial metrics such as profitability when shifting away from some of the company’s money-losing lines. The budget Fiesta, Lincoln sedan, and Ford Taurus faded way to profitable passenger vehicles and future innovations, such as the Mustang Mach-E (Tully, 2020).

Although Ford’s total assets and total revenues grew steadily between 2013 and 2017, the threats of intense competition, regulatory implications, and rising costs of materials and labor remain very real (Pratap, 2018). The overhaul of the antiquated company proved to be more challenging than anticipated. “overall, Hackett’s bold vision failed to deliver what’s essential to reviving an old-fashioned metal-bending enterprise: Consistently rising returns on investment from fresh and staple products” (Tully, 2020, pp. 6). The large investments required to modernize production cost a significant amount of cash. During Hackett’s reign as CEO, Ford’s operating cash flow fell by $2.2 billion, meaning returns on capital were inadequate (Tully, 2020). The return on this major investment has not been fully realized. The Covid-19 pandemic only exasperated the challenges and threats facing Ford Motor Company.

References

Ford. (2022).

Ford Announces Jim Hackett to Retire as President and CEO; Jim Farley to Succeed Hackett as Company Continues Transformation

. Ford Announces Jim Hackett to Retire as President and CEO; Jim Farley to Succeed Hackett as Company Continues Transformation | Ford Media Center. Retrieved July 20, 2022, from

https://media.ford.com/content/fordmedia/fna/us/en…

Pratap, A. (2018, September 12).

Ford Motors Strategic Analysis

. notesmatic. Retrieved July 20, 2022, from

https://www.notesmatic.com/ford-motors-strategic-a…

Tully, S. (2020, August 6).

Ford’s Jim Hackett had a bold vision-but couldn’t improve this all-important financial metric

. Fortune. Retrieved July 20, 2022, from

https://fortune.com/2020/08/04/ford-ceo-jim-hacket…

MBA515 Unit 7 Discussion Post.docx

Student 2 Tiffany

When Jim Hackett took over as CEO for Ford Motor Company, he wanted to make some big changes. Hackett was brought on to modernize one of the oldest car companies, he intended to do this by creating new corporate strategies that were more interconnected with financial data. (Tully, 2020) Hackett looked at Ford’s financial ratios, and worked to cut back on cost by automating more production and getting rid of some of the Ford vehicles that had the lowest Return on Investment. (Tully, 2020) Hackett’s plan was to focus on the vehicles that made Ford the most money (SUVs & trucks) and emerge as a contender in electric vehicles. Unfortunately, in the end, he was unable to successfully come through for Ford and their financial ratios got consistently worse under Hackett’s leadership, and they were not able to produce less and less cash from its investments. (Tully, 2020)

In 2020, Hackett stepped down as CEO and Jim Farley stepped into the position. While Hackett was able to cut back on many operational expenses, to get financial ratios back up, Farley will need to do even more. (Tully, 2020) If Farley wants to bring Ford back to where it was at before, he will need to focus on the changing market and creating a better return on investment on both current and new Ford products. (Tully, 2020)

There four different financial ratios that are commonly used, solvency, efficiency, liquidity, and profitability. Solvency ratios are used to show whether a company will be able to pay off long-term debt. (Hayes, 2022) Efficiency ratios usually look at a 3-5 year period and show how well a company uses its asset; for example how quickly inventory is being sold and how it is managed. (BDC, 2022) Liquidity ratio shows how much cash/ liquid assets a company has to cover its current debt. (BDC, 2022) Profitability ratios show how well a company is able to earn a profit and are best viewed in comparison with companies who sell similar products. (Hayes, 2022) For continuation strategy, or a long-term strategy, a company would be more likely to look at solvency and efficiency ratios as they tend to deal with long-term information. For a changing strategy, or short-term strategy, a company is more likely to look at liquidity and profitability ratios since they deal with current information.

References:

BDC. (2022, May 26).

Financial ratios: 4 Ways to Assess Your Business

. BDC.ca. Retrieved July 19, 2022, from

https://www.bdc.ca/en/articles-tools/money-finance…

Hayes, A. (2022, July 11).

The importance of profitability ratios

. Investopedia. Retrieved July 19, 2022, from

https://www.investopedia.com/terms/p/profitability…

Hayes, A. (2022, July 8).

What is a solvency ratio?

Investopedia. Retrieved July 19, 2022, from

https://www.investopedia.com/terms/s/solvencyratio…

Tully, S. (2020, August 6).

Ford’s Jim Hackett had a bold vision-but couldn’t improve this all-important financial metric

. Fortune. Retrieved July 19, 2022, from

https://fortune.com/2020/08/04/ford-ceo-jim-hacket…

Week 7 Discussion _Ford Ratios.docx

  
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