Ford Motor Company: The Pride of Michigan

By: Attila Jancsina

The Ford Motor Co. is a well-known international player in the automotive industry. It is noted for models such as the Lincoln and Mercury, as well as the Jaguar and Land Rover automobiles.

The company is based in Dearborn, Michigan. The company was first established in June 16, 1903 by Henry Ford. It has been controlled by Ford's descendants for over a century since its founding.

Early Years

Ford began his venture into the automotive industry with only US$28,000 as capital, which he gleaned from several investors. Interestingly, the founders of the Dodge Brothers Motor Vehicle Co. - John and Horace Dodge -contributed to Ford's capital.

Ford gave his products a designation of letters, with the first one designed Model A in 1903. Ford's first six-cylinder car was designated as Model K, which had a price of US$2800. The Ford model was the most expensive automobile at that time, as its rivals sold for prices significantly lower than that. For example, the Success automobile sold for a very low US$250.

Ford did not have his own factory when he produced his first automobiles. He soon acquired his own factory in Piquette Avenue in Michigan, from which he produced about 18,000 units of Model T automobiles in 1909. High demand for the Model T prompted Ford to move his operations to a larger plant in Highland Park, from which over 69,000 units of the Model T were made and sold to buyers.

Ford also came up with a moving assembly line in 1913, the first of its kind in the whole world. Ford had his engineers build up on the basic techniques of assembly line and mass production in a bid to increase production and make improvements to assembly processes. Because it now only took 2 hours and 40 minutes to assemble a chassis, the company was able to output more than 200,000 units of the Model T in 1913.

Workforce Problems and Rise to Fame

Ford's improvements to the assembly line caused high turnovers within his factory workforce, because it became strenuous to the employees who were used to the earlier processes to adjust to the faster-paced assembly line processes. However, Ford found a way by increasing the workers' pay to twice the original sum, and cutting down on work hours by an hour. He also limited work days up to Friday.

Ford's tactics worked. Employee turnover significantly dropped, and production increased significantly. Sales also increased, which meant Ford can now sell more units at lower prices. Ford also established the Ford brand name more by coming up with a system of dealers that franchised the Ford name.

The Ford Motor Co. officially expanded internationally when it established Ford of Canada in 1904. Seven years later, in 1911, Ford opened several plants in Europe and in Australia. By 1920, Henry Ford's firm controlled 50% of the market share with its Model T cars. Henry Ford himself contributed to the rising fame of his brand name by joining other pacifists in 1915 when they tried to stop the First World War in Europe.

Developments During and After World War I and World War II

Although he had earlier stated that he did not want to make profits from war, the Ford Motor Co. eventually handled production of the B-24 Liberator bomber for the war effort, prompting it to build the Willow Run plant in April 1941. Beginning August 1943, Ford's assembly lines worked 24 hours a day to roll off one complete and functional B-24 in just an hour, with pilots waiting for takeoff in costs while the bombers were rolled off the production line.

The stress of the situation would ultimately lead to the death of Edsel Ford, who was named as Henry Ford's successor in 1919, in the spring of 1943. Henry once again assumed control of the company during these trying times.

In 1956, Ford went public under the leadership of Henry Ford II, the son of Edsel and Eleanor Ford, who was appointed president in 1945 by Henry Ford himself. Despite being public, the Ford family acquired enough Special B preferred stocks to keep a controlling interest of 40% in the company.

Current Years

The Ford family still controls 40% of the company through the preferred stocks, and about 5% of the ordinary shares of the company.

The company is currently under restructuring. In fact, the company had announced the mortgaging of all of its assets in 2006 in order to earn about US$23.4 billion to refinance the rehabilitation until 2009.

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