In a recent article, Forbes automotive columnist Jerry Flint recounts Ford Motor’s ambitious goal in 1966 that they would produce an electric car in five to 10 years. Flint recalls after numerous inquiries during the subsequent months and years, he was eventually told that five to 10 years, was a running target and that Ford was always five to 10 years from a viable electric car. Finally, in 2009, Ford announced that an electric version of the Ford Focus will be in the showrooms in 2011.
Unfortunately, this 43-year delay may end up dampening Ford’s success in the electric car market.
Within a few months of Ford’s announcement, Detroit Electric Holdings Ltd., an automotive start-up based in Amsterdam, publicly stated it would start selling electric vehicles in the first quarter of 2010;
initially in China, Europe, and the United Kingdom with sales opening up in the United States shortly afterward. The base vehicle will have a single-charge range of over 100 miles with models costing between $23,000 and $26,000. By 2012, sales are expected to exceed 270,000 vehicles. Could a different business model and organizational structure explain the much faster launch of Detroit Electric’s car in comparison to the much slower pace displayed by Ford?
Detroit Electric While electric cars were produced under the Detroit Electric brand between 1907 and 1939, the current iteration of Detroit Electric was established in 2007.
The firm’s Netherlands-based engineering team has already patented an electric drive system and “Flux Motor” technology. Detroit Electric also developed an expertise in lithium polymer batteries. The company claims its technology is a significant improvement over its competitors, and allows for its vehicles to operate more efficiently and have increased ranges. In a period where the major auto manufacturers are losing billions of dollars, Detroit Electric has developed this technology and is projecting to sell hundreds of thousands of electric cars within the next five years. How much investment did Detroit Electric need to bring its car to its current stage? A relatively modest investment of $20 million. The company anticipates an additional $100 million investment will be necessary to bring the cars to market.
To put this investment in context, Ford lost an average of $67 million a day in the fourth quarter of 2008. When asked how the company can do what has eluded the traditional automakers, Detroit Electric points out that it follows a different business model and organizational structure.

Questions 1. What organizational structure do you believe is being used to produce Detroit Electric vehicles?
2. Detroit Electric is on pace to introduce its electric vehicles to market just three years after its inception.
Ford will have taken over 40 years to produce a viable electric car by 2011. How has differing organizational structure influenced the pace of development within these two companies?
3. The creation and manufacture of Detroit Electric’s car involves organizations from countries around the world. What issues may arise from this cooperative arrangement of international companies?
4. How would you promote ethical behavior in the organization producing the Detroit Electric car?