GM Acquiring Ford - Research Paper Example

GM Acquiring Ford GM Acquiring Ford Corporation Ford Corporation is a multinational corporation centrally located in North America district. It holds two distinctions, Ford motors corporation and Ford finance. Ford Motor Corporation manufactures cars and trucks, where the market is stretched to Central Europe, Asia Pacific, Africa, North America and South America respectively. With such large global network, Ford Corporation have a big market share in the international stock exchange where company’s mean operating profit per annum is recorded in billions in the automotive side (New York Times, 2012).

General Motors Company is a classic car manufacturing brand present in US since 1931. The brand is popular with its classic distinctions in both car and truck sections. Its network is present worldwide, covering Europe, Africa and United States. It is one of the leading competitors of Ford Corporation since 1980s, when both brands introduced new classic models into the market regions (Salamie & Stansell, 2006). Probable Risk Factors of the MergerWith such massive global network of automobile, Ford Corporation has been facing a lot of challenges in its internal divisions (New York Times, 2012).

Alan Mulally the CEO of the company has talked about several challenges the company has faced in the recent times, which if it gets merged with any company like General Motors, will add several risk factors in the organization system (New York Times, 2012).It has been seen in recent years that Ford Corporation is facing big time challenges in both American and European markets, while GM decisively focusing on the European section because of its fallback in the Central Europe since 2008, will expect Ford Corporation to support its European region (New York Times, 2012).

If Ford gets merged with General motors, probable chance is that it invites uncertainties of General Motors prevailing in the European market. (New York Times, 2012) According to New York Times, due to lack of efficiency and operation, GM has lost its entire position in the Central Europe market segment. The company has received big time debts and bankruptcy cases which has deprived company’s dominating position in the Central Europe. More investments are made on the European side as the formal CEO Rick Wagoner of the company suggested restructuring of the company in that region.

On this node if Ford gets along with such present situation of General Motors, it will have to invite challenges of European market carrying risk of sales regression, brand devaluation or deflation of the brand culture. According to New York Times (2012), Ford Corporation has been facing highest losses in present years and if it decides a merger with General Motors, will lose its operational dominance and consumer loyalty which are major parts of Ford’s recognition (New York Times, 2012). In such a scenario where both corporations are facing deep troubles, deciding a merger would be a total risk, especially in the long term.

On merger Ford Corporation will have to bring GM European models into car manufacturing consideration (New York Times, 2012), which will surprise the American buyers who are loyal to the brand since from the beginning. The merger will also risk the operations and service and a probable chance would be that Ford loses its brand recognition in European district where GM motor is already in back off position. Apart from all, the Merger will also bring compromise of quality which is the central element of Ford Corporation’s mission and vision.

GM on the classic apprehension would expect Ford Corporation to change its perception of the car models, which if happened will take away the entire charm of the brand. The perception of ford buyers will start to divert who always try to remain loyal with the brand peculiar car models (New York Times, 2012).Reference ListNew York Times. (2012, September 26). Ford Motor Company. Retrieved September 26, 2012, from www.nytimes.com: http://topics.nytimes.com/top/news/business/companies/ford_motor_company/index.

htmlNew York Times. (2012, September 26). General Motors. Retrieved September 26, 2012, from www.nytimes.com: http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.htmlSalamie, D., & Stansell, C. (2006). General Motors Corporation. Retrieved September 26, 2012, from www.enotes.com: http://www.enotes.com/general-motors-corporation-reference/general-motors-corporation