Ford, Ford India, Mustang: elephants can’t dance: the story of two fords
The elegant Ford emblem, known to be the signature of Henry Ford, encrusted in the oval of blue and white beams with grace. Blue is synonymous with confidence, white represents the irreproachable reputation enjoyed by the brand. The oval represents a âmark of reliabilityâ. Modernized with a silver lining on the occasion of its 100th anniversary in 2003, it is considered one of the most successful logos in the world.
The iconic Blue Oval has erased a century of ups and downs and gracefully withstood years of unprecedented performance, unwavering courage and unparalleled heritage. Ford is synonymous with reliability and endurance. For generations of B-school graduates, Ford has become synonymous with the management lexicon: assembly lines, division of labor, mass production and vertical integration. As a pioneer, Ford portrays the dawn of modern industrialization. Henry Ford has become the curator of the âdemocratizing the automobileâ vision. The Lincoln Continental, SVT-Raptor, Thunderbird, F-100 and Mustang remain badges of corporate excellence.
Ford’s Model T is said to have ushered in the automotive revolution. The car has become the subject of songs and films. Built in 1908, the Model T was designed as a convenient and affordable form of transportation for the common man. Over 15 million T models have been sold.
A first model T
The pandemic and an upheaval
When the pandemic struck, Ford found itself on a different playing field – manufacturing fans – a move that marked a historic redeployment of its resources and capabilities. What began primarily as a result of a global health crisis, and less by choice, has become Ford’s new business model. In October 2020, Ford announced leadership changes to turn around auto operations and reconfigure its organizational design.
Car manufacturing is usually a long and tedious process. The new strategy ushered in a change of pace for Ford where speed was the essence. It was Ford’s âfuture of workâ moment. The structural overhaul marked a radical departure from the monolithic hierarchical conception of the twentieth century, so characteristic of the archetype of the Fordian textbook. The teams were brought together in a hybrid environment. Ford adopted a de-densification strategy, which required replacing designated workstations with flexible collaboration spaces. It wasn’t just about reassembling the layout, it portended a behavioral and cultural change.
Ford’s hierarchy has given way to a more agile structure. Ford’s story is a lesson in âphoenix rising from the ashesâ. Wobbling for years, Ford Motor began to show signs of revival. In the first quarter of 2021, the company made $ 3.3 billion in profit, the most it made in a quarter in ten years. Its share price recovered, jumping by more than 70%. In July, Ford increased its profit forecast for 2021 after posting impressive results. Ford faces a lot of challenges, but there is a lot more confidence now. The company is “springboard for growth”.
Ford’s global success and the great Indian debacle
While Ford’s global outlook looks bright, there is another story happening 7,000 miles from Michigan, its headquarters. With nearly $ 2 billion in accumulated losses, Ford India is closing its doors, leaving employees, dealers and customers in dire straits. This is the story of two different Fords.
Ford began production in India in 1926, but the original company was wound up in 1953 due to severe import restrictions. Ford returned to the Indian market in 1995 with a joint venture with Mahindra & Mahindra. Later, Ford increased its stake to 72 percent in 1998 and renamed the company Ford India Private Limited. It has launched an impressive range of cars and models in India. Over the years, Ford had invested billions of US dollars to set up manufacturing facilities and its network of service centers across India. These facilities not only produced vehicles for the domestic market, but also for various export markets.
Ford’s announcement to stop making cars in India and only sell through importation made it clear that it would no longer be in the driver’s seat. While this created ripples, it came as no surprise to industry veterans who felt Ford lacked a connection to Indian customers. âFord could not read the Indian marketâ and that âhe was looking at the Indian market through the American prism,â say auto experts.
India is still a market for affordable cars with low operating costs. World leaders do not have models that fit into this scaffolding. Ford could never threaten the dominance of Maruti’s little feats, for example. Ford is an illustration of the elephants cannot dance syndrome, victim of its bulky size and strong local connection. Ford India’s early successes waned. Ford is an example of how things can go wrong for the big guys.
Global manufacturing giants have long viewed India as a lucrative market. They had been drawn to the country’s cheap labor and the government’s promises to make the playing field conducive to business. The New York Times cites that the government has struggled to remove barriers and provide a robust ecosystem. Industry commentators wonder why India is becoming a graveyard for the global auto giants.
The economy is shaken by the pandemic. Demand for new vehicles has weakened and automakers are grappling with supply chain issues. The Indian automotive market is not so promising anymore. Despite aggressive efforts, Ford was unable to gain a foothold in the market. A brand known for making dynamic and legendary machines suddenly ceases to exist.
At first, gasoline powered the engine, and reverse offered more power than forward gears; the Model T therefore frequently had to be driven backwards over steep terrain. Ford’s story in India, in some ways, becomes a metaphor for it.
The author is a professor at the Faculty of Management Studies and Research at Aligarh Muslim University.