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This post addresses component-parts manufacturing.

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Why was it profitable for GM and Ford to integrate backward into component-parts manufacturing in the past, and why are both companies now trying to buy more of their parts from outside suppliers?

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The solution provides a detailed discussion examining why it was profitable for GM and Ford to integrate backward into component-parts manufacturing in the past, and why are both companies now trying to buy more of their parts from outside suppliers.

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It was more profitable for General Motors and Ford to integrate backward into component-parts manufacturing in the past because the times were different then. Ford and GM began their vertical integration strategies back in the 1920s. When they did, things were just starting to really excel in the auto industry, however the industry was far from being considered developed, even though great strides were being made in all areas of auto manufacturing. Auto manufacturers had to contend with the auto industry just starting to develop. If there were ...

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