Improvement of the Financial Management System at Ford Motor Company

Ford's European business has become a 'package.' According to statistics, Ford's European business has suffered a total loss of 12 times since 1999, with a loss of up to $3 billion. Industry insiders predict that Ford Europe will have a cumulative loss of $3.6 billion between 2019 and 2021, and the number of losses will increase each year. In the future, Ford may stop the bleeding from continued losses by cutting staff and shutting down the factory. Layoffs can only solve the immediate urgency, and Ford is far from being able to recover the loss. Ford said it would seek to exit the European multi-purpose vehicle market, focusing on the development of more profitable 'cross-border' and sport utility vehicles, and will stop producing automatic transmissions in Bordeaux in August.

Through management discussion and analysis, I also noticed that a very important issue is cost management. With the steady development of the world economy, the most challenging issues facing business managers are not "how to succeed" but "how to continue to succeed," according to a survey report by the American Productivity Association and the Institute of Management Accounting. In the 20th century, the world's major companies put 'growth' first, but in the 21st century, they put 'cost' first, showing that enterprises have paid great attention to cost control and management. It is one of the key factors for continued success. The external environment of the enterprise itself is beyond control, and enterprise management only starts from the inside. Throughout the world's enterprises, management accounting is being applied to the pursuit of how to improve profits and reduce costs. On the basis of strengthening cost management and control, management accounting has advanced a lot more than pure cost management. By analyzing Ford's financial reports, I found that Ford's sales in Europe and Asia have continued to decline. I think there are certain cost management reasons for this.

For Ford to improve the company's financial performance in the future, management should be clear about Ford's future sales direction. Ford's sales performance in Europe and Asia in 2019 was not very satisfactory. At the same time, there is a need to improve quality. The best models sold by Ford in the US are pickup trucks and SUVs. So why not in Europe and Asia? The best car in Europe and Asia is a Volkswagen. I think we need to go into the market and carefully study why Asia prefers Volkswagen and Japanese models. In order to improve financial performance, sales, and after-sales service are important factors. From the market perspective to the economic system, to see the global market share, how far and how wide Ford can go depends on the future market positioning.

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