Early Developments
Ford was launched in a converted factory in 1903 with $28,000 in cash from twelve investors, most notably John and Horace Dodge, who would later found the Dodge Brothers Motor Vehicle Company. Henry Ford was 40 years old when he founded the Ford Motor Company, which would go on to become one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. The largest family-controlled company in the world, the Ford Motor Company has been in continuous family control for over 100 years.
During its early years, the company produced a range of vehicles designated, chronologically, from the Model A in 1903 to the Model K and Model S (Ford's last right-hand steering model)[1] of 1907.[2] The K, Ford's first six-cylinder model, was knows as "the gentleman's roadster" and "the silent cyclone", and sold for US$2800;[3] by contrast, around that time, the Enger 40 was priced at US$2000,[4] the Colt Runabout US$1500,[5] the high-volume Oldsmobile Runabout[6] US$650, Western's Gale Model A US$500,[7] and the Success hit the amazingly low US$250.[8]
The next year, Henry Ford introduced the Model T. Earlier models were produced at a rate of only a few a day at a rented factory on Mack Avenue in Detroit, Michigan, with groups of two or three men working on each car from components made to order by other companies (what would come to be called an "assembled car"). The first Model Ts were built at the Piquette Road Manufacturing Plant, the first company-owned factory. In its first full year of production, 1909, about 18,000 Model Ts were built. As demand for the car grew, the company moved production to the much larger Highland Park Plant, and in 1911, the first year of operation there, 69762[9] Model Ts were produced, with 170211 in 1912.[10] By 1913, the company had developed all of the basic techniques of the assembly line and mass production. Ford introduced the world's first moving assembly line that year, which reduced chassis assembly time from 12½ hours in October to 2 hours 40 minutes (and ultimately 93min),[11] and boosted annual output to 202667 units that year[12] After a Ford ad promised profit-sharing if sales hit 300,000 between August 1914 and August 1915,[13] sales in 1914 hit 308162, and 501462 in 1915;[14] by 1920, production would exceed one million a year.
These innovations were hard on employees, and turnover of workers was very high, while increased productivity actually reduced labor demand.[15] Turnover meant delays and extra costs of training, and use of slow workers. In January 1914, Ford solved the employee turnover problem by doubling pay to $5 a day, cutting shifts from nine hours to an eight hour day for a 5 day work week (which also increased sales; a line worker could buy a T with under four months' pay),[16] and instituting hiring practices that identified the best workers, including disabled people considered unemployable by other firms.[17] Employee turnover plunged, productivity soared, and with it, the cost per vehicle plummeted. Ford cut prices again and again and invented the system of franchised dealers who were loyal to his brand name. Wall Street had disagreed with Ford's generous labor practices when he began paying workers enough to buy the products they made.[citation needed]
While Ford attained international status in 1904 with the founding of Ford of Canada, it was in 1911 the company began to rapidly expand overseas, with the opening of assembly plants in England and France, followed by Denmark (1923), Germany (1925) and Austria (1925),[18] and also in Australia (1925) as a subsidiary of Ford of Canada. By the end of 1919, Ford was producing 50 percent of all cars in the United States, and 40% of all British ones;[19] by 1920, half of all cars in the U.S. were Model Ts. (The low price also killed the cyclecar in the U.S.)[20] The assembly line transformed the industry; soon, companies without it risked bankruptcy. Of 200 U.S. car makers in 1920, only 17 were left in 1940.[21]
It also transformed technology. Henry Ford is reported to have said, "Any customer can have a car painted any color that he wants so long as it is black." Before the assembly line, Ts had been available in a variety of colors, including red, blue, and green, but ironically, not black. Now, paint had become a production bottleneck; only Japan Black dried quickly enough, and not until Durco lacquer appeared in 1926 would other colors reappear on the T.[22]
In 1915, Henry Ford went on a peace mission to Europe aboard a ship, joining other pacifists in efforts to stop World War I. This led to an increase in his personal popularity. Ford would subsequently go on to support the war effort with the Model T becoming the underpinnings for Allied military vehicles.
[edit] History of the Blue Oval
The Ford oval trademark was first introduced in 1907. The 1928 Model A was the first vehicle to sport an early version of the Ford script in the oval badge. The dark blue background of the oval is known to designers as Pantone 294C, the same color used in Finland's flag. The Ford script is credited to Childe Harold Wills, Ford's first chief engineer and designer. He created a script in 1903 based on the one he used for his business cards. Today, the oval has evolved into a perfect oval with a width-to-height ratio of 8:3. The current Centennial Oval was introduced on June 17, 2003 as part of the 100th anniversary of Ford Motor Company.[23]
[edit] Post World War I Developments
In 1919, Edsel Ford succeeded his father as president of the company, although Henry still kept a hand in management. Although prices were kept low through highly efficient engineering, the company used an old-fashioned personalized management system, and neglected consumer demand for improved vehicles. So, while four wheel brakes were invented by Arrol-Johnson (and were used on the 1909 Argyll),[24] they did not appear on a Ford until 1927. (To be fair, Chevrolet waited until 1928.)[25] Ford steadily lost market share to GM and Chrysler, as these and other domestic and foreign competitors began offering fresher automobiles with more innovative features and luxury options. GM had a range of models from relatively cheap to luxury, tapping all price points in the spectrum, while less wealthy people purchased used Model Ts. The competitors also opened up new markets by extending credit for purchases, so consumers could buy these expensive automobiles with monthly payments. Ford initially resisted this approach, insisting such debts would ultimately hurt the consumer and the general economy. Ford eventually relented and started offering the same terms in December 1927, when Ford unveiled the redesigned Model A, and retired the Model T after producing 15 million units.
On February 4, 1922 Ford expanded its reach into the luxury auto market through its acquisition of the Lincoln Motor Company, named for Abraham Lincoln whom Henry Ford admired, and the Mercury division was established in 1938 to serve the mid-price auto market.[26] Ford Motor Company built the largest museum of American History in 1928, The Henry Ford.
Henry Ford would go on to acquire Abraham Lincoln's chair, which he was assassinated in, from the owners of the Ford Theatre. Abraham Lincoln's chair would be displayed along with John F. Kennedy's Lincoln limousine in the Henry Ford Museum & Greenfield Village in Dearborn, known today as The Henry Ford. Kennedy's limousine was leased to the White House by Ford.
President Franklin Roosevelt referred to Detroit as the "Arsenal of Democracy." The Ford Motor Company played a pivotal role in the allied victory during World War I and World War II. As a pacifist, Henry Ford had said war was a waste of time, and did not want to profit from it. He was concerned the Nazis during the 1930s might nationalize his factories in Germany. During the Great Depression Ford's wages may have seemed great to his employees but many of the rules of the factories were very harsh and strict. Those were tense times for American companies doing business in Europe. In the spring of 1939, the Nazis assumed day to day control of Ford factories in Germany.
With Europe under siege, Henry Ford's genius would be turned to mass production for the war effort. After Bantam invented the Jeep, the War Department handed production over to Ford. When Consolidated Aircraft could at most build one B-24 Liberator a day, Ford would show the world how to produce one an hour, at a peak of 600 per month in 24 hour shifts. The specially-designed Willow Run plant broke ground in April 1941. At the time, it was the largest assembly line in the world, with over 3,500,000 square feet (330,000 m²) under one roof. Edsel Ford, under severe stress, died in the Spring of 1943 of stomach cancer, prompting his grieving father to resume day-to-day control of Ford. Mass production of the B-24 began by August 1943. Many pilots slept on cots waiting for takeoff as B-24s rolled off the line.[27]
[edit] Post World War II Developments
At the behest of Edsel Ford's widow Eleanor and Henry's wife Clara, Henry Ford would make his oldest grandson, Henry Ford II, President of Ford Motor Company.
Henry Ford II served as President from 1945–1960, and as Chairman and CEO from 1960–1980. "Hank the Deuce" led Ford to become a publicly traded corporation in 1956. However, the Ford family maintains about 40 percent controlling interest in the company, through a series of Special Class B preferred stocks.
In 1947, Henry Ford passed away. According to A&E Biography, an estimated 7 million people mourned his death.
Ernest Breech was hired in 1946 and became the Executive Vice President. Then later became Board Chairman in 1955.
In 1946 Robert McNamara joined Ford Motor Company as manager of planning and financial analysis. He advanced rapidly through a series of top-level management positions to the presidency of Ford on 9 November 1960, one day after John F. Kennedy's election. The first company head selected outside the Ford family, McNamara had gained the favor of Henry Ford II, and had aided in Ford's expansion and success in the postwar period. Less than five weeks after becoming president at Ford, he accepted Kennedy's invitation to join his cabinet, as Secretary of Defense.
In the 1950s, Ford introduced the iconic Thunderbird in 1955 and the Edsel brand automobile line in 1958. Edsel was cancelled after less than 27 months in the marketplace in November 1960. The corporation bounced back from the failure of the Edsel by introducing its compact Ford Falcon in 1960 and the Mustang in 1964. By 1967, Ford of Europe was established.
Lee Iacocca was involved with the design of several successful Ford automobiles, most notably the Ford Mustang. He was also the "moving force," as one court put it, behind the notorious Ford Pinto. He promoted other ideas which did not reach the marketplace as Ford products. Eventually, he became the president of the Ford Motor Company, but he clashed with Henry Ford II and ultimately, on July 13, 1978, he was famously fired by Henry II, despite Ford posting a $2.2 billion dollar profit for the year. In 1979 Phil Caldwell became Chairman, succeeded in 1985 by Don Petersen
Harold Poling served as Chairman and CEO from 1990-1993. Alex Trotman was Chairman and CEO from 1993-1998, and Jacques Nasser served at the helm from 1999-2001. Henry Ford's great-grandson, William Clay Ford Jr., is the company's current Chairman of the Board and was CEO until September 5, 2006, when he named Alan Mulally from Boeing as his successor. As of 2006, the Ford family owns about 5 percent of Ford's shares and controls about 40 percent of the voting power through a separate class of stock.[28]
In December 2006, Ford announced that it would mortgage all assets, including factories and equipment, office property, intellectual property (patents and trademark), and its stakes in subsidiaries, to raise $23.4 billion in cash. The secured credit line is expected to finance product development during the restructuring through 2009, as the company expects to burn through $17 billion in cash before turning a profit. The action was unprecedented in the company's 103 year history.[29]
General Corporate Timeline
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