G.E., EXXON AND FORD MERGE TO CREATE AUTOS POWERED BY

COSMIC ELECTRICITY RATHER THAN FOSSIL FUELS

NEW PROCESS IS CALLED “LI-FI”

G Fex

Current Company Situation

Exxon is an oil exploration and refining companyExxon earns $397.58B per year

One of the most profitable companies in the worldFord is an automobile manufacturerFord’s revenues are $146.30B per year

The only auto company that did not participate in the bailout

G.E. is an energy and infrastructure providerG.E. earns $144.91B per year

Has had a few difficult years Stock worth half of what it was in 2000

New Strategy

In order to expand the business and diversify its holdings, Exxon plans to merge with Ford and G.E. to create G.Fex Uses Cosmic Energy, stored in satellites and delivered through

light ray to power automobiles Ford will manufacture the new automobiles that run on Li-Fi G.E. will deliver the electricity through Li-Fi Exxon will fund the project so it is not so dependent on oil

salesWhy should Exxon need a new strategy?

Oil reserves are limited People want an alternative fuel, and LiFi is both economical

and unlimited Turmoil in the Middle East, oil prices have plummeted

Rationale – Why It Would Work

Everyone wants a cheap, renewable energy sourceG.Fex would take light energy from the Sun and

transmit it through light rays to the Earth, cleanly Not like solar power, where you have to capture the power

in a cell once it reaches Earth, and requires receptor panelsWhat you could use it for

You could power your electric car constantly No need for a plug, even when it’s cloudy No need for gasoline or oil Can eventually power homes and factories Ensures that G.Fex continues to profit even if oil demand

drops

Timeline

Strengths Weaknesses

Positions G.Fex for first to market adoption for LiFi

Repositions G.Fex as a green energy leader rather than a polluter

ExpensiveLong payback periodUnprovenRequires extensive changes

SWOT Analysis

Opportunities Threats

• Third World countries are pursuing new energy methods due to poor infrastructure

• The world is running out of oil

• Sun spots/eruptions may make this energy system unreliable

• Solar competitors may offer a similar product

Ethical Unethical

G.Fex can help stave off pollution and disease by creating green energy that is renewable

G.Fex can help Third World countries modernize cheaply

G.Fex can make transportation cheap for everyone

G.Fex can put competitors out of business by using the loss leader method

G.Fex could control Third World countries through their energy dependency

G.Fex will make other companies go out of business, losing jobs

Ethical Considerations

Revenues – Expenses = ProfitShow how you will increase profit (then delete these instructions)Take the companies

and combine their Revenues: Exxon $482.295B Ford $134.252B GE $147.359B Total $688.79B

Add Savings $ 33.228B

New Revenue $722.018B

Here, you can save some money by combining departments:

Expenses: Exxon $361.585B Ford $140.890B GE $ 29.174B Total $531.649BRev – Exp = $132.912BSavings:25% $33.228B

Income Statements

Stock Performance

Tips for Presenting Financial Information

(You will delete this slide for your presentation)

Compare time periods: Identify a trend

Exxon’s revenues have dropped over the last three years They need a new strategy – since they are energy leaders, it may

as well be in the energy field Compare individual line items

The decrease is explained by the escalating cost of drilling for oilUse percentages to make comparisons

Revenue dropped 30% year over year With the new strategy, 25% of expenses will be saved through

redundancy of personnel (for all the combined companies)Write out a list of possible questions before you

present

Effect of Merger on Stock

The stock price of GFex will be stable because the underlying companies are all Blue Chips The dividend will continue to be paid and will be the

highest dividend in the market: $4.18 combinedPeople will continue to buy the stock for the

dividend, pushing up the priceDownside: if other players in the industry are

able to create this energy product more cheaply, GFex becomes a behemoth that has too many layers of employees/management and high labor costs