The Rise and Fall of Ford Motor Company

The rise of multinational companies and increased global diversification by even small companies has resulted in people of diverse backgrounds and cultures working together in the same office or for the same organization. Conflict in such situations is predictable, but understanding the diversity issues can help companies implement programs designed to keep conflict at a minimum and to take full advantage of the many benefits which such diversity brings to an organization.

Key to understanding how diversity is managed in multinational organizations is understanding the concept of corporate culture (which defines organizations), diversity programs and their use to minimize conflict among employees, and the unique problems that employees working overseas encounter. One of the biggest companies that have worked a lot on diversity is Ford Motor Organization. Ford Motor Company is an American multinational corporation and the world's second largest automaker, selling vehicles in 200 markets and with approximately 345,000 employees on six continents.

Ford also is a family with a heritage of strong and clear values. One of the most essential of Ford values is their commitment to diversity and inclusion. For Ford, diversity is a means to an end. It is one of the ways the company is seeking to drive a transformation to a team-based workplace. To have meaningful relationships with customers (and other stakeholders) it is essential to have an understanding of their needs. Having a diverse workforce is one of the ways of building this capacity into the company. From the start, Henry Ford and the family of Ford employees have valued diversity.

Ford's tactics worked. Employee turnover significantly dropped, and production increased significantly. Sales also increased, which meant Ford can now sell more units at lower prices. Ford also established the Ford brand name more by coming up with a system of dealers that franchised the Ford name. The Ford Motor Co. officially expanded internationally when it established Ford of Canada in 1904. Seven years later, in 1911, Ford opened several plants in Europe and in Australia. By 1920, Henry Ford's firm controlled 50% of the market share with its Model T cars.

Henry Ford himself contributed to the rising fame of his brand name by joining other pacifists in 1915 when they tried to stop the First World War in Europe. Ford Motor Company encountered severe economic losses as a result of a reduction in market share, as well as the high costs incurred by labor contracts and the development of automobiles that met the new federal standards. In 1980, the company lost $1. 54 billion, despite strong profits from the truck division and European operations. Ford lost a further $1.

06 billion in 1981 and $658 million in 1982 while trying to affect a recovery; its market share fell from 3. 6 percent in 1978 to 16. 6 percent in 1981. Company officials studied Japanese methods of industrial management, and worked more closely with Toyo Kogyo, the Japanese manufacturer of Mazda automobiles (Ford gained a 25 percent share of Toyo Kogyo in November 1979, when a Ford subsidiary merged with the company). Ford imported Mazda cars and trucks, and in many ways treated Toyo Kogyo as a small car division until the Escort, its successor to the Pinto, reached the showrooms.

This new compact was modeled after the Ford (Europe) Erika; another version of it, the Lynx, was produced by Ford's Lincoln-Mercury division. An economic recession crippled U. S. car manufacturers during the early 1990s, and Ford bore the brunt of the financial malaise that stretched around the globe. Domestically, car sales faltered abroad, particularly in Great Britain and Australia, Ford's sales plummeted. In 1991, Ford's worldwide automotive operations lost an enormous $3. 2 billion after recording a $99 million profit the year before. In the United States, automotive losses reached an equally staggering $2.

2 billion on the heels of a $17 million loss in 1990. The losses struck a serious blow to Ford, which as recently as 1989 had generated $3. 3 billion in net income; however, the financial results of 1991 would have been worse without the company's strategic diversification into financial services. For the year, Ford's financial services group registered a record $927 million in earnings, up from the previous year's total of $761 million, which left the company with a $2. 25 billion loss for the year, an inauspicious record in Ford's nearly 90-year history.

Nevins, Allan; Frank Ernest Hill (1954). Ford: The Times, The Man, The Company. New York: Charles Scribners' Sons. Brinkley, Douglas G. Wheels for the World: Henry Ford, His Company, and a Century of Progress (2003) 2. On December 3, 1984 the residents of a Bhopal, India awoke to a toxic cloud of methyl isocyanate (MIC) gas that had been discharged from the near-by Union Carbida India Limited plant. The deadly cloud infiltrated hundreds of shanties and huts as it slowly drifted in the cool night awaking sleeping residents to coughing, choking, and stinging eyes.

By dawn the cloud had cleared and many were dead or injured. Reports of the incident were slow to reach America. Union Carbide, a U. S. corporation that owns 51% of the plant, based in Danbury Connecticut, was in the dark for many days. Union Carbide made front page across the country for months and is still considered the worst industrial disaster in the history of the planet. The official Indian government panel charged with tabulating deaths and injuries updated the count to more than 3,800 dead and approximately 11,000 with disabilities (Browning, 1).

The chemical that was released, methyl isocyanate (MIC), is an ester of isocyanic acid (HNCO). It is highly volatile and inflammable and is easily produced and stored at room temperature. MIC, with phosgene as one of the substances used to manufacture it, creates immediate irritation, chest pain, breathlessness, and can trigger severe asthma. If the exposure is high, as in Bhopal, it leads to severe bacterial and oesinophihc pneumonia, tumour or laryngeal edema and massive cardiac arrest.

The real problem, however, is that it sensitizes the skin and even a mild exposure proves lethal (www. ecoindia. com). Union Carbide, reporting sales of $9. 5 billion in 1984, was clearly one of the largest industrial companies in the Unites States and the World. They produced everything from plastic wraps to automotive supplies. The Bhopal plant produced pesticides, mainly to be used in India in its pursuit to be more self-sufficient. Union Carbida India Limited (UCIL) was celebrating its 50th anniversary and had sales of about $200 million annually.

It operated 14 plants and had 9,000 employees. In 1984, the entire workforce at the plant in Bhopal was Indian and MIC had been being produced at the site since the 1970’s. Many different reports of what happened at the plant that caused the release of the gas have been offered, but none proven. Union Carbide offered in late 1986, with the absence of proven theory on how the gas was released was that the leak was a result of sabotage. This has been highly discredited by most for the convenience, lack of evidence, motive, or ability to perform such a feat.

The much more highly recognized theory, as described by Ward Morehouse and M. Arun Subramaniam in A Report for the Citizens Commission on Bhopal entitled The Bhopal Tragedy: What Really Happened and What It Means for American Workers and Communities at Risk. They describe a thorough and technical series of safety violations, and safety devices that were not operational that caused the leak summarized in ten decisions and actions: 1. Manufacturing Sevin with extremely toxic methyl isocyanate when less hazardous alternatives are known. 2.

Storage of highly unstable MIC in large quantities. 3. Plant design that allowed MIC to reach the atmosphere untreated through the vent gas scrubber. 4. Woefully undersized safety systems to handle runaway reaction. 5. Use of substandard materials in the MIC plant piping system known to be a source of contamination on MIC. 6. Modification of original plant design with installation of the jumper line between the process vent header and the relief valve vent header. 7. Endorsement of unsafe practices in the 1984 revision of the MIC plant operational manual. 8.

Neglect of some of the key findings of Union Carbide’s own safety audits of the Bhopal plant. 9. Preoccupation with cost cutting over safety as manifested in the reduction of maintenance manning levels and shutdown of the refrigeration unit. 10. Failure to develop and communicate to competent local authorities and the surrounding community an emergency response plan, notwithstanding internal company recommendations to do so. Obviously a high number of factors are involved but all stem around the fact the water entered the tank and Union Carbide is at fault. This was proven is civil suit versus the company.

India, as a country representing those harmed, filed suit against Union Carbide for an unprecedented $3 billion. After a lengthy and deliberated settlement, $470 million was paid to India, all of which was covered by insurance. According to Union Carbide, little money has ever been paid to those injured by the disaster. Chairmen Warren M. Anderson, who faced charges of culpable homicide, the only executive facing criminal charges, fled the India and has never returned. The story has been used as an example of the dangers of multinational corporations, the dangers of capitalism, an example of white-collar crime.

It is an example of what could happen right in your own back door if corporations do not follow safety regulations and are allowed to practice unsafe business practices. 5,000 to 30,000 dead. 200,000 injured. 30,000 to 50,000 who are too ill to ever return to their jobs. Can this happen in America? Nine months after the Bhopal massacre a Union Carbide plant in Institute, West Virginia, had a potentially catastrophic release of the pesticide aldicarb oxime. No lives were lost but suddenly many chemical towns felt vulnerable and deceived.

On March 12, 1991 an explosion and fire at Union Carbide’s Seadrift, Texas plant killed one worker, injured 32 others and come within minutes of killing hundreds. A leaked OSHA document revealed that Union Carbide’s EHS staff had conducted 7 audits over a period of twenty years, at least three of which had warned explicitly of dangers which contributed to the disaster. Union Carbide sold the plant in Institute, West Virginia two years after the Bhopal incident to Rhone-Poulenc’s. This plant poses a serious threat to the residents of the Kanawah Valley.

It continues to store large quantities of MIC despite the apparent problems, and alternatives to doing so. It is possibly the world’s last plant to do so. It continues to routinely store over 125,000 pounds of MIC, and has a rated capacity to store up to 240,000 pounds of the chemical. Approximately 80,000 ponds were released in Bhopal (PANUPS, 1). According to Edward A. Munoz, former Managing Director of Union Carbida India limited, there is eminent danger posed to the residents of this area. He believes that it is “crazy. I think that if you have an accident like in Bhopal they are going to kill a lot of people.

That’s going to make Bhopal Pale… Here in a more populated area and there is only one thruway to escape. And the thruway will be full, piled up cars with dead drivers pretty soon. You won’t be able to go anywhere… I think Bhopal to me would have proven that storing MIC could be a lethal proposition for a lot of people. If that happens in Charleston it would be a real disaster. We thought that we could control the conditions in Bhopal, or we wouldn’t have built a tank; and to assume that we can control the storage conditions in Charleston is very optimistic.

They say, well, the tank is similar or the safety features are the same as in Bhopal the back-up exploded—well—I’d be extremely concerned. ” Many articles were published marking the tenth anniversary of the Bhopal Massacre. Most discussed the outrage they felt over Union Carbide suffering no ramifications for its actions and the lack of justice the residents of Bhopal received. To say that Union Carbide suffered no ramifications is incorrect. The company’s workforce was slashed from 98,400 in ’84 to 12,000 today. Sales dropped from $9.

9 billion in ’80 to $4. 8 billion in ’92. Carbide’s stock plummeted in the wake of the tragedy, as it became apparent that the Indian government would seek millions in reparations, and in December 1985 the company became the target of a hostile takeover by GAF Corporation, a New Jersey chemical company. To fend off that bid, Carbide sold its consumer products group, including Glad garbage bags, Eveready batteries and Prestone antifreeze, bought back 56% of its stock and in doing so incurred $3. 3 billion in debt.

-PR Central On the other hand, Gary Cohen of Corporate Watch: the Watchdog of the WEB, states that the people of Bhopal are still dying from illnesses related to their exposure twelve years ago- as many as 15,000 people in total, according to unofficial estimates. Older people can’t get out of bed each morning due to bone-crushing pain they feel in all their joints. Thousands of people still suffer from respiratory diseases that prevent them from doing any physical labor. Children play “house” with each other and end their fantasy game by dropping dead from the poison gases they imagine.

For the survivors of the world’s worst industrial accident, the last twelve years have been an unending nightmare of injustice. First, they were victimized as they slept, by a company whose offices were 12,000 miles away. Then they were undermined by their own government, which struck a private, out-of-court settlement with Union Carbide for a fraction of the damage costs and which limited the company’s future liability. What the survivors have bitterly discovered is that their compensation settlements barely cover the cost of medicines and health care, for their families.

Despite all this, survivors in Bhopal have continued to protest for adequate health care and compensation. Everyday, companies in the U. S. report some 100 chemical fires, spills, or explosions. At least one thousand of these incidents each year involve deaths, injuries, or evacuations. At least 17 reported releases might have exceeded in volume and toxicity to that of Bhopal. To keep awful disasters from taking lives in the United States like it did in Bhopal many organizations and individuals have pushed for more stringent regulations.

Congress met this call in 1985 with the passage of a law called the Emergency Planning and Community Right-to-Know Act. Pushed through by groups like the Sierra Club, Clean Water Action, and Ralph Nader’s U. S. Public Interest Research Group, it gave communities the ability to peek inside the plant gates. It allowed access to information about the chemicals being used, and gave the right to sue companies that broke the law A powerful provision in the law, called Toxins Release Inventory (TRI), forced companies to report an annual release of some 300 toxic chemicals.

A chemical company fought tooth and nail to keep this provision from becoming law for obvious reasons and is still hailed by environmentalists and community activists as one of the most effective tools of grassroots democracy. The TRI has managed to make communities cleaner ad safer at little cost; alerted industry to inefficient processes and thus saved them hundreds of millions of dollars; and developed a framework for more honest communication between citizens and companies. The bill has been attacked by numerous Republican but has lasted the test of time.

This TRI is printed by the EPA every spring and immediately studied by journalists, environmentalists, and corporate executives. It is the first U. S. law to require the data to be stored electronically so in less then 24 hours in many cases the nation’s biggest polluters are being scrutinized. The threat of immediate nationwide exposure has forced companies to reduce pollution and more comprehensively then decades of EPA regulations and its petty fines. "Bhopal Gas Tragedy: Fact Sheet". Hindustan Times. Dec 3, 2004. Browning, Jackson. “Union Carbide: Disaster at Bhopal,“ http://www. bhopal. com/Jbrowning.