Jalal Pirzada: CEO Maria Legos: COO Colleen McDonald: CFO

Overview Industry: Auto & Truck Manufacturers Ford #2 maker of cars and trucks. Major competitors: DaimlerChrysler, General Motors, and Toyota. Ford makes vehicles under Aston Martin, Ford, Jaguar, Lincoln, Mercury, and Volvo brands. Owns a stake in Mazda and has purchased BMW’s Land Rover SUV operations. Hertz car rental, it has an auto finance company, Ford Motor Credit, and owns QualityCare and Kwik-Fit automotive services. The Ford family owns about 40% of the firm’s voting stock / Ford’s employees own 20%.

History

Vision To be the world’s largest consumer company for automotive products and services.

Mission We are a global family with a proud heritage, passionately committed to providing personal mobility for people around the world. We anticipate consumer needs and deliver outstanding products and services that improve people’s lives.

Strategic Objectives To build strong lasting relationships with our customers and grow our business. To improve the fuel economy of our sport utility vehicles 25% by To continue to be a positive contributor to the community. To create family service and learning centers at our facilities in the United States in partnership with the United Auto Workers Union. In 2002 will launch “Tire Pressure Monitoring System”

Strategic Objectives (cont..) To become a consumer focused team. To view our customer business from a customers perspective. To create an “early warning system” for tire information To introduce at least 45 new products in the next five years. To improve our performance in South America

Financial Objectives We plan to continue to deliver superior shareholder returns into the future. To be in the top quartile of the Standard & Poor’s 500 for share holder returns. To achieve more than 4% return on sales in North America. To achieve more than 1% return on sales in Europe.

Financial Objectives (cont..) To save $200m in the next 2 years with our Consumer Driven 6-Sigma. To reduce total costs by $1 billion. To contain capital spending at $8b or less. To improve returns and grow earnings 10% of Ford’s credit. To increase revenue $5 billion.

Strengths Ford Focus and F-Series best selling car and truck in the world #4 Fortune 500, S&P 500, #89 FT Global 500 Ford corporate umbrella strong brand names: Aston Martin, Ford, Jaguar, Lincoln, Land Rover, Mercury, 33% Mazda and Volvo US #1 auto finance company (Ford Motor Credit) & Quality Care Hertz #1 car rental firm in the world Kwik-Fit and Automobile Protection Corporation (APCO) Sold Cars & Trucks up units from 1999

Weaknesses Decrease in Automotive cash of $5b in 2000 compared to 1999 due bought back shares Visteon had a $2.3 billion loss due to carrying value was more than fair market value 6.5 million tires recalled, Bridgestone /Firestone controversy increased higher warranty costs Assets impairment and restructuring costs in Europe $1019m of Ford brand operations

Weaknesses (cont..) South America lost $240m in the automotive sector Write down of assets associated with Nemak Joint Venture $133 million Inventory related profit reduction Land Rover $106m

Opportunities Implementing a long term European Turnaround strategy To become an industry leader we will address environmental issues View our business from the customers perspective; “transaction” mentality to a “relationship” headset

Opportunities (cont..) Ford.com & FordDirect.com Wingcast will bring wireless, digital information and entertainment services directly into our cars and trucks Web portal launched with GM, DaimlerChrysler, Bell, and Howell to make distribution of service parts faster and more efficient

Threats Difficult economic conditions Tougher competition Rapidly advancing technology Stricter regulations Changing marketplace Increasing demands from a variety of stakeholder groups

Market Data: Ford 2000 HQ: Dearborn, MI Employees: NYSE: F 52-Week High: $58.40 Low: $22.75 Shares Outstanding (M): 1837 Market Value (M): $ Total Consolidated Revenue: $ Billion, Up 6% from 1999

Wall Street Consensus Ford Motor

Financial Ratios Analysis Profitability Ratios 1. Gross Profit Margin = Measures how much of each sales dollar earned use to cover operating expenses and profit Gross Profit Margin = Sales – COSG / Sales – / = 26.76% Ford = 26.76%Industry = 27.79% Ford’s every one dollar of sales, it has 27 cents left to cover operating costs and profit.

Profitability Ratios 2. Profit Margin = Measures the percentage of profits earned per dollar of sales Profit Margin = (Net Profit / Net Sales) x 100 (3467 / ) x 100 = 2.04% Ford = 2.04%Industry = 1.47% Ford makes 2 cents for every $1.00 dollar of sale.

Liquidity Ratios 1. Current Ratio = Measures how much current assets are available to meet its maturing short term obligations Current Ratio = Current Assets / Current Liabilities / = 0.91 Ford = 0.91:1Industry = 1.99:1 Ford has 91 cents of current assets to meet $1.00 of its current liability.

Liquidity Ratios 2. Quick Ratio = Measures company’s ability to pay off short-term obligations without relying on the sales of its inventories. Quick Ratio = Current Assets – Inventories / Current Liabilities – 7514 / = 0.6 Ford = 0.6:1Industry = 1.4:1 Ford has 60 cents of Quick Assets to meet $1.00 of its current liability.

Leverage Ratios 1.Interest Coverage Ratio = is the measurement of how many times interest payments could be made with a firm’s earnings before interest expenses and taxes are paid Interest Coverage Ratio = Earnings Before Interest and Taxes (EBIT) over Interest expense EBIT = = Interest Expense = = / = 1.7 Ford = 1.7Industry = 2.1 Ford compared to industry is less solvent and can only meet interest obligation little less than twice a year.

Leverage Ratios 2. Debt-To-Equity Ratio = Measures how much funds provided by Creditors versus Owners. Higher Debt to Equity ratio means that creditors have more stake and risk then shareholders. Debt-To-Equity Ratio = Total Debt / Total Stockholders’ Equity / = 8.90 Ford = 8.90Industry = 2.10 Ford has $8.90 of LT debt for every $1.00 of equity.

Activity Ratios 1. Days of Sales Outstanding = Measures how long in days it takes a company to convert its sales receivables into cash Days of Sales Outstanding = (Accounts Receivables / Sales) / x 365 = Ford = 13 DaysIndustry = 121 Days It takes 13 days for Ford to covert its receivables into cash while it takes 121 days for the industry.

Activity Ratios 2. Inventory Turnover Ratio = Measures firm’s efficiency in terms of how fast can a company move its inventory in a year Inventory Turnover = Net Sales / Inventory / 7514 = 17.9 Ford = 17.9 Industry = 8.9 Ford is able to rotate its inventory in sales 18 times in a fiscal year.

Recommendations Shift from Transactional view to Customer relationship #2 South Korea car maker DAEWOO MOTOR Acquisitions Land Rover, Kwit-Fit and spin off costs loss Viseton and High Unusual Items losses Assets Impairment & Restructuring. Further Purchases put on HOLD. Debt is expensive then equity Think cars available at Avis and other nations wide car rentals