Credit Crunch :: Financial Crisis, Increased Interest Rates

Credit crunch, the sudden reduction in the availability of liquidity (loan or credit) in the monetary market that lead to high rates of borrowing, has occurred at 9 August 2007 ((National Council for Voluntary Organisations, 2010 Investopedia ULC, 2010 Anon., 2009). This mainly due to the housing bubble in between 2000 to 2007 (Xu, 2009) that dampen the confidence of financial institutions to give which thus increased the interest rate by 20%, make it nearly impossible for companies to borrow (Xu, 2009 Buzzle.com, 2010 Investopedia ULC, 2010). This has therefore impact every form of business, as well as, the multinational enterprise - that based in star country, but has operate various business activities through a network of subsidiaries in one or more foreign countries (Hodgetts, R.M & Rugman, A.M., 2003) One of the multinational enterprises that being affected is Ford get Company, an automotive manufacturer, based in Dearborn, America which founded and incorporated by Henry F ord on 16th June, 1903 (Iloveindia.com, 2010 Anon., 2010).Prior to this credit crunch issues, Ford is aggressively on investing in foreign countries and acquisition of opposite companies. It has begun its foreign investment after(prenominal) the first manufacturing plant build in the small town of Walkerville, Canada on August 17, 1904. (Novelguide.com, 2010), and has started to take over other companies, such(prenominal) as Mercury, Volvo (Sweden), Aston Martin (UK) and a 33% of Mazda (Japan), after the first acquisition of Lincoln Motor Company in 1925 (Answer.com, 2010 The Super Cars, 2010). Furthermore, in the mid-1980, Ford has diversified into financial services, namely Ford Motor Credit Company (FundingUniverse, 2004 Anon., 2010), and has soon become the countrys second largest provider of diversified financial services, ranking only behind Citicorp after take over The Associates, a Dallas-based finance company in 1989 (FundingUniverse, 2004).It has thus expanded the manufa cturing, assembly and sales facilities in 34 countries (Freeonlineresearchpaper.com, 2009) which group in four principal regions North America (parent country), South America, Europe and Asia Pacific (Ford Motor Company, 2008). In order to manage the huge organization smoothly, Ford seeks a repose between centralized leadership and decentralized implementation in its parent and host country (Bazak, et al., 1998.). Hence, the management in each region company has substantiate a corporate jurisdiction, where, each had its own manufacturing processes , product development systems, suppliers, and other duplicative structures the regions along but still under the general supervision of the main office. (Ford Motor Company, 2008).