Why did the vertical integration of East Star Group fail?
The performance of East Star Group after vertical integration is not as good as expected, so it will fail. In the early 1990s, after the problem of vertical integration became more obvious, East Star Group began to lose money. Comparatively speaking, while other multinational companies such as General Motors remain stable, people begin to doubt whether vertical integration is appropriate. Ford's sales continued to decline in 2005. It sold Hertz hertz, the world's largest car rental company, for $5.6 billion to make up for the financial crisis in the same year. Bill Ford also announced that East Star Group will lay off nearly 1 10,000 people worldwide before the end of 2005, and will continue to reduce its affiliated industries. Two years later, in 2007, East Star Group sold Aston Martin for $925 million, and Ford will use this fund to accelerate the development of new products. The trend of vertical integration and disintegration will continue. In the future, more and more automobile manufacturers may outsource other parts except the core parts such as engines.