Reaction 2.docx

Latiza, Mark Jasper J. BSCE IV-GA REACTION PAPER “FORD EXPANDS PARTNERSHIP TALKS WITH VW AND MAHINDRA TO CUT COSTS”

As much as it depend its size from revenue amounts, profits will never occur in breaking-even production cost levels. Unsurprisingly, there are actually numerous ways to defray operational business costs. Ford, in its goal to attain lower cost of production, did this through establishing partnerships. As stated in the article, Ford sought to rent out its available production facilities to other auto-manufacturing firms in able to earn additional income. It also practiced price benchmarking to monitor its operating expense parity with others in the industry, whether they have been incurring higher cost levels compared with its peers or not. For me, this is a good practice of company self-assessment. First, Ford is trying to maintain the goal of firms of satisfying its shareholders’ interest through “low costs, high profits” business performance. Second, Ford is maximizing its efficiency through putting into work otherwise idle company assets. This move is an all-win scenario, limiting the company asset wastage and earning otherwise absent income. Lastly, it is establishing healthy partnerships with its peers within the industry. The saying “no man is an island” is being put into practice by Ford through seeking help and opinion with same-industry players which in turn assesses, improves and alleviates its current performance level. This in turn inures to the benefit of its shareholders and possibly to stakeholders of the firm.