Research Project Part B: Cultural Environment – 50 points (1000-1400 words))
Ford Motors Company
Spain remains the eurozone fourth-largest economy since its return to democracy. There was a situation in 2018, which led to European immigration crisis with almost half of the seaborne migrants finding their way to Spain. Political tensions have been witnessed in Spain. There was a situation in which the government removed a rogue regional government that had been created after the 2017 October independence referendum. The government deemed the creation of Catalonia, a government. Political tensions have been witnessed as evidenced by the installation of a pro-independence cabinet. Essentially, Spain has a diversified economy that ranges from manufacturing, financial, pharmaceutical, as well as the textile industry. The tourism sector has immensely contributed to government growth (Carozzi & Repetto, 94-97). Despite the presence of a diversified economy, unemployment remains a significant challenge to the country as the majority of individuals remain jobless.
The economic freedom score of Spain is 65.7, which makes the country to enjoy a free economy as per the 2019 index. The current score is an increase in fiscal health offsetting. It is a country that is located on the extreme southwestern of Europe. Experts allude that the entire economy was built on bricks and mortar as evidenced by various features which have all contributed to the growth of the economy. For instance, the city of Valencia is described as the City of Arts and Sciences. Majorly the country is ranked 28th among 44 countries of countries located in the European region although the overall score is below the regional average. The government enjoys a minority status, and this has affected the implementation of pension, costly program of labor policies as well as educational reforms. The country has faced tough economic times. As a result, economic recovery has ensured that there is a reduction in Spain’s borrowing costs (Moro-Martín, 111). Despite the intervention measures inflation remains a challenge to the country as it has affected growth.
Findings indicate that there is a high percentage of cumulative exports and imports. Ideally, the aggregate value is equivalent to 65.5 percent of the GDP. Additionally, the average applied tariff rate is almost 2.0 percent. Such economic measures have arisen due to the implementation of EU-directed non-tariff trade barriers. The non-tariff trade barriers extent to the technical and product-specific regulations. The Eu directives have also extended to government quotas and subsidies. The government attributes foreign investment as a more significant contributor to the country’s growth. Investment has led to an improvement in the banking and financial sector. There have been regulatory efficiency procedures to facilitate economic growth. This has witnessed the streamlined setup business as well as the provision of licensing requirements. The measures have ensured that there is an improvement in the regulatory policies in the business environment. For instance, 2012 saw the establishment of structural reforms to allow an open labor market. The removal of price control, as well as subsidies in the energy system, were initiated by the government (Harrison, & Corkill, 78). The different control measures by the government have allowed foreign investment as there has been the removal of trade barriers.
As of 2019, the population of Spain is 46,737,847. As a sovereign state, it is situated on the Iberian Peninsula, which is in southwest Europe. The south borders the Mediterranean Sea while the north and the northeast border France, Andorra as well as the Bay of Biscay. As a democratic country, it is under a constitutional monarchy. There is a significant increase in the country population with statistical figures indicating that there has been a growth of almost 52 percent over the last half-century. Government findings suggest that the total surface area of the country is nearly 505,992 square kilometers. The population and space area translate to a population density of 91.4 people per square kilometer. Ideally, the population density is lower than in western European countries.
The largest cities in Spain are Madrid, Barcelona, Bilbao, Malaga, Seville as well as Valencia. All the cities have a population that is above one million. The official language used nationwide is Castilian Spanish. The people also utilize other languages. Majorly, large populations are concentrated in the major cities. The rural areas of the country have witnessed a steady decline in population, although there is constant growth. There is no official religion, even though 90 percent of the population consists of Catholics. Besides, there have been population projections that indicate steady growth despite an instance of slow growth within different regions of the country. The forecast predicts that the population may decline in the future (World Population Prospects, 2-3). Thus, the growth of the country can be attributed to different factors, such as unemployment
Company and Product Description
Ford Motor Company has been the face of the American automobile market for over a century. Henry Ford and eleven investors incorporated the company in 1903. The company only manufactured a few cars in its early days. Despite the small operational scale, the company was able to breakeven in its first year of incorporation. Ford had opened an international branch in 1904. The branch was located in Ontario, Canada, and had a different set of shareholders. In 1908 Ford introduced the Model T which sold over 15 million units. The model was designed to be affordable to the public. The Ford family did acquire the full ownership of the company through the Ford Foundation in 1936. The company remained in private property until 1956 when its stock started trading publicly (McMahon 17). It currently has its headquarters in Dearborn, Michigan.
Ford is mainly famous for its introduction of modern production techniques. It introduced the integrated moving assembly line in 1913. That was primarily to try and meet the high demand for its Model T’s. The integrated production method led to the lowering of production costs, which were reflected in the price of the cars. The company has over the years, acquired other motor vehicle brands like Jaguar, Mazda, and Volvo. Over time, the company has experienced financial struggles which forced it to sell most of the acquired brands. At the moment, it only sells the Ford and Lincoln brands after the harsh economic times.
Ford has had a challenge operating in the 21st century when the American manufacturing industry was on the decline. It was among the three biggest automakers that received $34 billion of aid from the Bush Administration. The company has since tried to stabilize its financials and survived the threat of bankruptcy. The company has managed to increase its sales and secure a future in the automobile industry.
Board of Directors
Ford’s board has a variety of experts that provide a unique set of pf knowledge to improve the company. William Ford is the Chairman of the board and has had years of experience in the company in various managerial roles. James Hackett has the positions of president and Chief executive officer working alongside Timothy Farley, the Chief Financial Officer. James Farley is the president of the Global Markets in the company tasked with increasing the company presence in other continents, including Europe. Joseph Hinrichs leads global operations after joining the company in 2000. Bradley Clayton is the chief administrative officer while Hau Thai-Tang is the Chief of Product Development. Other board members include John Lechleiter, Beth Mooney, William Helman, William Kennard, Stephen Butler, Kimberly Casiano, Anthony Early, and Edsel Ford.
Ford has been producing a variety of cars and has even tried its hands on the electric car line. In 2018 the company announced that it would be moving away from the production of passenger cars. It claimed that it would instead focus on pickups, SUVs as well as crossover vehicles. Ford’s automobile segment is the largest and most profitable of its many ventures. It also has the financial section which works on offering financial assistance for the Ford and Lincoln models. The financing segment is critical to aiding the automobile segment to sell its products in the US market. The Ford Smart Mobility segment works with making new technologies in the motor vehicle industry. The section is meant to provide the company with a competitive advantage through innovations. Ford’s vehicles are mainly designed for the larger vehicle audience. Their trucks are intended to assist companies and other individuals that intend to carry heavy loads.
Stock Market Indicators
Ford Motors has a market capitalization of $36.59 billion with 3.92 billion outstanding shares. Its share price is relatively stable at $9.16 per share. The price earnings ratio is as high as 16.63, which indicates that the investor has to offer $16.63 to earn a single dollar of the company’s earnings. The last dividend was as low as $0.15 per share, with a yield of 6.54%. The EPS is $0.55, which shows that the company retains the bulk of its earnings (MarketWatch).
Stock Market Performance Chart
The company’s share price has been on a decline in the past five years. In 2015 the share price was as high as $17, which has fallen since fallen to $9. The fall indicates dwindling confidence in the company over the years hence the change in strategy to eliminate the production of passenger vehicles.
Carozzi, Felipe, and Luca Repetto. “Distributive politics inside the city? The political economy of Spain’s Plan E.” Regional Science and Urban Economics 75 (2019): 85-106.
Ford Medi Center. People Our Leadership. 2019. Accessed from https://media.ford.com/content/fordmedia/fna/us/en/people.filter.members-of-the-board.0.10.html
Harrison, Joseph, and David Corkill. Spain: a modern European economy. Routledge, 2016.
MarketWatch. Ford Motor Company. September 1, 2019. Accessed from https://www.marketwatch.com/investing/stock/f
McMahon, Brian. The Ford Century in Minnesota. University of Minnesota Press, 2016.
Moro-Martín, Amaya. “Spain’s good news.” (2018): 111-111.
Nasdaq. Ford Motor Company Stock Chart. September 1, 2019. Accessed from https://www.nasdaq.com/symbol/f/stock-chart?intraday=off&timeframe=5y&charttype=line&splits=off&earnings=off&movingaverage=None&lowerstudy=volume&comparison=off&index=&drilldown=off&sDefault=true
World Population Prospects. United Nations population estimates, and projections. Total population: Estimated to be consistent with 1950, 1960, 1970, 1981, 1991, 2001 and 2011 censuses, with official population estimates through 2015, and with estimates of the subsequent trends in fertility, mortality and international migration (2019 Revision).