The Demands of the Fuel Efficient Cars - Assignment Example

Building a Sustainable Ford Motor Company Table of Contents Section 3 Brief Summary of the Article 3 Section 2 5 Identify Four Key Questions 5 Section 3 6 Answer to the Four Questions 6 References 10 Bibliography 12 Section 1 Brief Summary of the Article The article is all about the interview that took place among Bill Ford and McKinsey’s Sheila Bonini, who is the consultant working in Silicon Valley office and Hans-Werner Kaas, who is the director in Detroit. The article has been focused upon sustainability, innovation, new technologies for the fuel economy and overcoming resistance for change. According to Ford, in the past the demand for the fuel efficient cars was less. The reason behind this was that the price of the gas was cheap. However, in the recent days the price of the fuel has increased. Moreover, the technology has developed keeping in mind the demands of the fuel efficient cars. At one point of time, it was the Europeans who switched to smaller cars and more efficient fuel. However, the main drawback has been the convening entity which could have made the European model work. There were changes brought by Bill Ford like the introduction of the Rouge plant. The world’s largest brown field site was chosen and it was transformed into the world’s greenest assembly plant. As claimed by Bill Ford, at Rouge, the paint fumes are being turned into energy. Certain Ford Motor plants consist of the grass roofs. There are permeable parking lots where the storm water is not flushed out but sunk into the ground. The company has been applying several technologies among which few are high tech and low tech technologies. Low tech technologies involved activities such as absorption of the dirty waters by the plants. According to Ford, the company had faced several problems over the years. However, Bill Ford took these issues as a challenge and tried to overcome them. When the company faced certain difficulties during the year 2006 to 2008, Bill Ford insisted the company to spend on the R&D in all the areas. With these the company has been able to maintain leadership position. In Ford, the term sustainability has been rarely used as it lacks clarity. However, the company focuses more on gaining the leadership position on fuel economy segment. It further talks about cleaning up of the plant and the application of the technologies that would help to drive out the carbon dioxide emissions. According to Bill Ford, the term sustainability in the broadest sense is all about the economic sustainability. In order to manage the uncertainty, the company may have a mix of the propulsion in the medium term. There has been a rapid change in the technology. The company needs to stay abreast of the developing technologies and needs to be lively enough with the aim that if certain changes occur then it will be able to roll with that. In order to respond to the changes in the environment, the company has scientists who pays due attention towards the innovation. There is close collaboration between the basic product development group and the advanced research group which help them to stimulate innovation. The company has also been engaged in other forms of collaboration with the universities and the suppliers across the world in order to gain good ideas. Bill Ford stated that, the US based company has a competitive strength in manufacturing. It has a well trained workforce. Moreover, the workforce takes pride in working with the company. It believes that the employees need to be retrained in order to become technologically proficient. At the same time, the government and the business need to form partnership in order to tackle the societal issues like global warming and fuel independence, which won’t be solved unless there are collaborations. Lastly, the article throws light upon the future strategy direction for the Ford Motors. Bill Ford said that after five years from now, he would like to have certain things for the company. He would like the company to be recognized by the customers for being the leader in the application of the technology which would help to improve the lives of the customers. He would like Ford to be seen nationally as a company that would contribute towards the success and improvement of the nation. Section 2 Identify Four Key Questions From the overall analysis of the article, four key questions have been identified devised upon the entire article. The four significant questions identified are as follows: 1. You have been an advocate for sustainability for many years. Can you explain how you came to these views? 2. With so many different Paths out there – improved internal combustion engines, electric cars, bio-fuels, hydrogen- what is the right way to manage the uncertainty? 3. How is this influencing the way you innovate at Ford? 4. If you look ahead five years what else do you want for the Ford? Section 3 Answer to the Four Questions 1. You have been an advocate for sustainability for many years. Can you explain how you came to these views? It has been found from the experience of the last 10 years that the environmental issues have paved the way into the business capacity in order to create values for the customers, the shareholders and the other stakeholders who have been involved. The external factors such as the carbon emission and the water use are becoming an issue for the investors who consider them that these can have a negative impact upon the performance of the firm. Moreover, the stakeholders want the companies to share the information regarding them. The customers are seeking for the sustainable products and services and are leaning towards the companies to improve the sustainability of the traditional ones (Lubin & Esty, 2010). From the article it was found that Bill Ford has been supporting the sustainability since many years. He has been an advocacy for sustainability since his college days. As opined by him, no one can be the users of the natural resources until and unless there is penalty for it. However, Bill did not have any supporter in his thinking. He wanted Ford to be a place where his employees felt enthusiastic and took pride in their work. According to him the business completely depends upon getting the best and the brightest employees. But if the place was not accepted socially to work at, then it would have become difficult for the company to get the best and the brightest employees. 2. With so many different Paths out there – improved internal combustion engines, electric cars, bio-fuels, hydrogen- what is the right way to manage the uncertainty? The different paths that are being introduced like the improved internal combustion engines, electric cars, bio fuels and the hydrogen have transformed the world culturally, environmentally and economically (MIT Sloan School of Management, n.d.). Petroleum is the most used fuel that is powering the US economy. Other alternatives that the cars use are the natural gas, electricity, bio-fuels and the hydrogen. When compared to petroleum both the biodiesel and the ethanol have lower emissions, they are biodegradable and are also safer for handling. The electric vehicles have been successful in converting the 75% of the battery energy into functional power which is more efficient than the internal combustion engine that converts around 20%. The main advantage of the electric vehicle has been that they help to reduce the greenhouse gas emission by discarding the combustion engine and its dependence upon the fossil fuels. Hybrid electric vehicle has helped to bridge the gap that lie between the electric vehicles and the liquid fuels. It is evident that there has been major transformation in the technology, which makes the future uncertain. It may become difficult for the companies to cope up with such changes. The distribution and the production of the economically efficient hydrogen cars will stimulate the sustainable and the renewable energy that will power the US transportation sector. On the other hand, as externalities are present it indicates the failure of the market which will require the government intervention. In order to reduce the reliance upon the oil and to mitigate the environmental impacts, it is very important for the companies to shift towards the renewable and the sustainable energy sources (Industrial College of the Armed Force, 2010). According to the article, Bill Ford in his interview said that the company needs to enter into certain real technological revolutions. Deciding on whether in the near future there will be one form of propulsion or a mix of all of them, have been vague. As opined by him, the company may have the mix of the propulsion in the medium term. The company has not given up hydrogen or any other types of new technology with the introduction of the new one. It not only has a fuel cell but also has hydrogen internal-combustion engines. In order to welcome each of the new systems the major obstacle that comes on the way is the infrastructure. The companies need to have proper infrastructure. For instance, for the hydrogen system the companies should tear-up every gas station and there will be storage issue on both the sites as well as the vehicle itself. Moreover, the bio-fuels may have the similar problem as they are not shipped via the pipelines. Therefore, as opined by Bill Ford, the company requires a big tear-up towards their infrastructure. 3. How is this influencing the way you innovate at Ford? It is possible that changes are likely to occur with the varying demands of the customers and the development in the technologies. However, the major challenges for the companies lie in the fact that how they cope up with such changes. More significantly, the companies need to be prepared and prepare its strategies accordingly. This becomes evident from the article that in response to the changes in the systems, the company has scientists who work at Ford. Not only they have been focusing upon the sustainability, but they are also based upon the safety issues, real time parking information, traffic and plethora of other things. There is stronger coordination between the companies advanced research group and the product development group. The company is having close collaboration with the universities and the suppliers in order to gain new ideas on innovation and on development of the strategies. Moreover, the company focuses more on the training of the employees with the aim that they get accustomed to the new changes and become technologically proficient. 4. If you look ahead five years what else do you want for the Ford? This had also been one of the significant questions asked during the interview to Bill Ford. This question focuses upon the strategic future direction of the Ford Motors Company. The company desires to be recognized by its customers as the leader in the application of the technology that will help to enhance the lives of the customers. It would also like to contribute to the nation’s improvement and therefore serve the nation. The company will try to address the significant social justice issues. The team will be led by the experienced directors who will help in the strategy development and will assist in the process of learning and evaluation (Ford Foundation, 2009). In the next five years the company would like to increase its production units. It would like to exceed the needs and demands of the customers and provide its customers a fun-to-drive experience. It would further focus upon being a leader in all the new products that it introduces for fuel economy and in providing safety, value and quality. The company will try to have a dedicated team member who would help in the progress of the company and work together as a global enterprise that would focus on delivering great products. The company would like to create a viable and exciting company with profitable growth for all (Ford Annual Report, 2009). References Ford Annual Report, (2009). Annual Report. Looking Forward. Retrieved Online on December 21, 2010 from http://www.annualreports.com/partners/Report/21416 Ford Foundation, (2009). Our Next Generation of Strategies. From The President. Retrieved Online on December 21, 2010 from http://www.fordfoundation.org/about-us/from-the-president/our-next-generation-strategies Lubin, D. A. & Esty, D. C., (2010). The Sustainability Imperative. Harvard Business Review. Retrieved Online on December 21, 2010 from http://www.fredforum.org/pdf/The%20Sustainability%20Imperative.pdf MIT Sloan School of Management, (No Date). Transition Challenges for Alternative Fuel Vehicles and Transportation Systems. Abstract. Retrieved Online on December 21, 2010 from http://web.mit.edu/~jsterman/www/StrubenSterman%20EPB%2007.pdf The Industrial College of the Armed Force, (2010). Energy 2010. Introduction. Retrieved Online on December 21, 2010 from http://www.ndu.edu/icaf/programs/academic/industry/reports/2010/pdf/icaf-is-report-energy-2010.pdf Bibliography Lewis, H. & Et. Al., (2009). Frontier Battery Development for Hybrid Vehicles. Introduction. Retrieved Online on December 21, 2010 from http://humanities.uchicago.edu/orgs/institute/bigproblems/Team4-1209.pdf McKinsey & Company, (2010). Building a Sustainable Ford Motor Company: An Interview with Bill Ford. Sustainability & Resource Productivity Initiative. Retrieved Online on December 21, 2010 from http://www.mckinseyquarterly.com/Building_a_sustainable_Ford_Motor_Company_An_interview_with_Bill_Ford_2496 Read More