It was reported that Ford Motor Company is trying to reduce its production by 10% this year at its Venezuelan assembly plant. It was due to the fact that the government did not allow it to get enough money to import parts. But Gabriel Lopez, president of Ford Affiliate Company said that it did not intend for a shutdown. However, production at some of its car plants may affect due to the nonavailability of the imported parts. Government of Venezuela has imposed a restriction on US currency inflow since the year 2003.
The companies have to get the approval of the government for buying dollars at a limited exchange rate. The situation aggravated when the price of the oil slashed down globally bringing disadvantage to the company in procuring dollars. (http: //news. moneycentral. msn. com/ticker/article. aspx? symbol=US: F & feed=AP& date=20090611& id=10005566, retrieved on 14th June, 2009). Foreign Operations: The company’ s overseas operations function under its corporate jurisdiction including the regions of the European continent. Its corporate websites are designed to serve specific locations. In Ford’ s overseas operations several economic concepts are used. In the UK and other parts of Europe, Ford applies the principle of comparative advantage to maintain modern international trade relations.
This approach benefits both the countries in the matter of their economies as well as employment opportunities. After the 1982 devaluation of the Peso to US dollar, Ford Mexico had a relative advantage in the production of aluminum, iron, electricity, labor, and transportation subject to the proximity of the US market. Likewise, the free trade agreements and policies existing in Asia and Pacific opened great opportunities for economic integration in those areas. Because of the company’ s free-trade policies, the respective governments have created a comparative advantage of localities.
This, in turn, originated global platforms for multinationals. The international branches of Ford exercise their economic policy of free market.
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