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Indicators of Decline
In 2006 there were clear indications that all was not well with the company,
they were having five straight years of declining sales, as already pointed
their stock prices were crashing, their losses were mounting, their new
product launches had failed due to over interference of Finance department
in product development, communication had broken down as senior
managers were hiding information and abstained from delivering bad news,
there was a sustained exodus of talent from the company at all levels and
they also had been losing market share constantly (from 30% in 1996 to 16%
in 2006).
Source of Decline
The main source of decline for the company is their own internal dynamics,
their communication had completely which is substantiated by the fact that
senior managers didnt inform employees of any bad news and held back
information, also their departments were not coordinating as evidenced by
finance department interfering with product development, such culmination
of factors lead to eventual decline, they were basically being crushed under
their own weight.
Company Actions
To bring themselves out of crises the company went for broke, they
announced restructuring, they also mortgaged all assets to raise $23.4 billion
cash in secured credit lines, in order to finance product development during
restructuring through 2009 and to bring a new viewpoint they brought in
outsider to company as well as to Automobile Industry Alan Mullay as the
CEO, who was responsible for pulling out Boeing from crises post 9/11.
References
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(2010). Ford Annual Report.
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