By: Peter Wittwer
After our visit today with Federal Mogul and Ford, the two companies seemed to have very different business models. As Ellen Hughes-Cromwick and Dennis Tosh reiterated today, Ford is not trying to expand their company through the acquisition of other companies. They are focused on growth from within, specifically focusing on making great Ford cars as well as pushing Lincoln to become their single luxury car brand. Mulally consolidated the brand to shed costs of the other brands, such as Jaguar, Land Rover, and Aston Martin. He believed that getting the focus back on the Ford brand would increase quality and increase sales. It was Mulally’s, “One Ford,” that allowed the company Ford survive the financial crisis without declaring bankruptcy in the mid 2000’s. On the other hand, Ford Mogul has had a very different approach to growth. In 2002, Federal Mogul was catapulted into bankruptcy because of the purchase of Turner & Newall. They were responsible for the Armley asbestos disaster in Leeds, UK. The large number of products liability claims was the main cause of Federal-Mogul’s Chapter 11 bankruptcy. To emerge from this economic disparity, Federal-Mogul acquired many companies such as Robert G. Evans Co., Hanauer Machine Works, Inc., Metaltec, Inc., Mather Co. and Fel-Pro, Inc. They emerged from Chapter 11 in 2008, and since have solidified their position as one of the leaders in their industry as a supplier of various automobile parts. Since 2008, they have purchased the Daros Group in 2010 and the BERU spark plug business in 2012. Ford tried to maintain multiple companies they acquired and ultimately it led to spreading themselves thin. It will be interesting to see if Federal Mogul will meet a similar demise if they continue to expand and acquire different firms, or if Ford can continue to grow just focusing on producing great Fords as well as if they can turn Lincoln into a competitive luxury car brand.
A Question Concerning Expansion
Posted in Posts
By: Peter Wittwer