Ford Contemplates Strategic Alliances

William Clay Ford Jr., the chairman and chief executive of Ford, the second-biggest U.S. automobile manufacturer is exploring the idea of alliances with other carmakers these days.

Ford reported a huge loss of $123 million in the first half quarter last year, and subsequently had cut down the production in third quarter by 20,000. The company is also looking at closing down 14 of it's factories, and reducing the work force by 30,000 by the year 2012. Even as Ford Motors plans to revamp its own business, it is also exploring and evaluating prospects for alliances with other automakers like Renault, Nissan and General Motors.

Despite its financial problems in North America, Ford Motor "could be a very attractive partner to many companies under the right circumstances," said John Casesa, an industry analyst with Casesa Strategic Partners.

Mr. Ford spoke with Carlos Ghosn, the chief executive of Nissan of Japan and Renault of France, who is involved in similar alliance discussions with General Motors. News has it that Mr Ford asked Mr Ghosn to consider talks with Ford Motor if discussions with GM did not bear fruit. Mr Ford is looking at every possibility, given the brutal competition in the American market.

Mr. Ford said, “There are a lot of players out there gaming these things out, and we are, too. If we find someone with common interest, and it's good for all of us, we would look at that.”

Ford is very keen on fixing its North American business. Towards this cause the automaker plans to accelerate its "Way Forward" turnaround plan with announcements expected next month. Mr. Ford also said that the company is looking at "radical changes" when it comes to its many brands, but he declined to give details. Speculations are rife that Ford would sell its Jaguar and Land Rover brands, and that it would phase out the struggling Lincoln-Mercury nameplate.

Mr. Ford has entrusted none other than himself for this job. He is taking the lead in the evaluations of alliances because of their strategic nature. He claims, “We need somebody, and I'm that somebody right now, who knows how to get our manufacturing footprint right, our employee count right, the product development right.”