Ford Company

Kauno technologijos universitetas

Economics and Management faculty

Ford company and Henry Ford

VB 3/5 gr.
student

S. Jokubauskas

Kaunas, 2004

The Dream Becomes a Business

Ford Motor Company entered the business world on June 16, 1903, when
Henry Ford and 11 business associates signed the company’s articles of
incorporation. With $28,000 in cash, the pioneering1 industrialists gave
birth to what was to become one of the world’s largest corporations. Few
companies are as closely identified with the history and development of
industry and society throughout the 20th century as Ford Motor Company.

As with most great enterprises, Ford Motor CCompany’s beginnings were
modest. The company had anxious moments in its infancy2 The earliest record
of a shipment is July 20, 1903, approximately one month after
incorporation, to a Detroit physician3. With the company’s first sale came
hope—a young Ford Motor Company had taken its first steps.

Mass Production on the Line

Perhaps Ford Motor Company’s single greatest contribution to automotive
manufacturing was the moving assembly line. First implemented at the
Highland Park plant (in Michigan, US) in 1913, the new technique allowed
individual workers to stay in one place and perform tthe same task
repeatedly on multiple vehicles that passed by them. The line proved
tremendously4 efficient, helping the company far surpass the production
levels of their competitors and making the vehicles more affordable5.

The First Vehicles
Henry Ford insisted that the company’s future lay6 in t

the production of
affordable cars for a mass market. Beginning in 1903, the company began
using the first 19 letters of the alphabet to name new cars. In 1908, the
Model T was born. 19 years and 15 million Model T’s later, Ford Motor
Company was a giant industrial complex that spanned7 the globe. The years
between the world wars were a period of hectic expansion. In 1917, Ford
Motor Company began producing trucks and tractors. In 1919 a conflict with
stockholders over the millions to be spent building the giant Rouge
manufacturing complex in Dearborn, Michigan led to the company becoming
wholly owned by Henry Ford and his son, Edsel, who then succeeded his
father as president. In 1925, Ford Motor Company acquired8 the Lincoln
Motor Company, thus branching out into luxury cars, and in the 1930’s, the
Mercury diivision was created to establish a division centered on mid-priced
cars. Ford Motor Company was growing.

Becoming a Global Company
In the 50’s came the Thunderbird and the chance to own a part of Ford Motor
Company. The company went public and, on Feb. 24, 1956, had about 350,000
new stockholders. Henry Ford II’s keen9 perception10 of political and
economic trends in the 50’s led to the global expansion of FMC in the 60’s,
and the establishment of Ford of Europe in 1967, 20 years ahead of the
European Economic Community’s arrival. Th

he company established its North
American Automotive Operations in 1971, consolidating11 U.S., Canadian, and
Mexican operations more than two decades12 ahead of the North American Free
Trade Agreement.

Ford Motor Company started the last century with a single man
envisioning13 products that would meet the needs of people in a world on
the verge of high-gear industrialization. Today, Ford Motor Company is a
family of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda,
Jaguar, Land Rover, Aston Martin, and Volvo. The company is beginning its
second century of existence with a worldwide organization that retains and
expands Henry Ford’s heritage14 by developing products that serve the
varying and ever-changing needs of people in the global community.

Henry Ford

Industrialist, inventor. Born July 30, 1863 in Dearborn, Michigan,
into a farming family. The first child of William and Mary Ford, he was
taught largely by his mother, who instilled in him a strong sense of
responsibility, duty, and self-reliance.Ford grew up on a farm and might
easily have remained in agriculture. But something stronger pulled at
Ford’s imagination: mechanics, machinery, understanding how things worked
and what new possibilities lay in store. As a young boy, he took apart
everything he got his hands on. He quickly became known around the
neighborhood for fixing people’s watches and became an excellent self-
taught mechanic and machinist. At age 16

6 he left the farm and went to
nearby Detroit, a city that was process of becoming an industrial giant.
There he worked as an apprentice15 at a machine shop. Months later he began
to work with steam engines at the Detroit Dry Dock Co., where he first saw
the internal combustion16 engine, the kind of engine he would later use to
make his automobiles. When he was 28 Ford took a job with Thomas Edison’s
Detroit Illuminating Company, where he became chief engineer.

In his spare time he began to build his first car, the Quadricycle. It
resembled17 two bicycles positioned side by side with spindly18 bicycle-
like wheels, a bicycle seat, and a barely visible engine frame. Some said
it bore a resemblance19 to a baby carriage with a two-cylinder engine.. It
was the first “horselesscarriage” that he actually built. It’s a far cry
from today’s cars and even from what he produced a few years later, but in
a way it’s the starting point of Ford’s career as a businessman. Until the
Quadricycle, Ford’s tinkering had been experimental, theoretical—like the
gas engine he built on his kitchen table in the 1890’s, which was just an
engine with nothing to power. The Quadricycle showed enough popularity and
potential that it launched the beginning of Ford’s business ventures. I
In
June 1896, Ford took an historic ride in his first automobile that was
observed by many curious Detroit on-lookers. The Quadricycle broke down in
a humiliating20 scene. By 1899 Ford created a more proper-looking motorcar
with the help of wealthy businessman William Murphy. It had high wheels, a
padded21 double bench, brass lamps, mud guards, and a “racy” look. In the
same year Ford founded the Detroit Automobile Company. Within 3 years Ford
had built an improved, more reliable Quadricycle, using a four-cylinder, 36
horsepower-racing engine. In 1901 Ford car beat what was then the world’s
fastest automobile in a race before a crowd of eight thousand people in
Grosse Pointe, Michigan.

The publicity he received for this victory allowed Ford to finance a
practical laboratory for refining22 his auto ideas. In 1903 Ford launched
his own car company, The Ford Motor Car Company, and by January 1904 he had
sold 658 vehicles. By 1908 he built the famous Model T(about this model I
will write in the future) a car that was affordable to the middle class.
The automobile was no longer the toy of the rich. Sales of the Model T
increased to 720,000 by 1916.

Ford was able to make a reliable and inexpensive automobile primarily
because of his introduction of the innovative moving assembly line into the
process of industrial manufacturing. The assembly line is a system for
carrying an item that is being manufactured past a series of stationary
workers who each assemble a particular portion of the finished product. The
assembly line was undoubtedly23 Ford’s greatest contribution to industry.
It revolutionized manufacturing and made it possible to make uniform
products quickly and affordably.

Ford personally controlled most aspects of his company operations. He
shocked the industrial world in 1914 by paying his workers the very high
wage of $5 a day. In exchange for this high wage Ford demanded of his
employees regular attendance24 at work, as well as a serious and sober25
private life. He required all immigrant laborers learn English and become
citizens of the United States.
Ford was intrigued by the ideas of Frederick Taylor (1856-1915), author of
The Principles of Scientific Management. Scientific management was a
philosophy of standardizing the behavior of workers to increase efficiency
and production. Ford designed his factories to fit human performance, but
then demanded his workers perform according to the factory design. He was
one of the first to introduce time clocks into his business operations to
monitor the exact minute a worker arrived at his job, took his lunch, and
when he left his job. Ford began treating the worker like a living machine,
and he attracted heavy criticism for this.

Ford was criticized for more than his totalitarian26 business
practices. It was shocking for most people in the United States to read of
Henry Ford’s anti-Semitism, which he published weekly for two years in
unsigned articles in his own newspaper, The Dearborn Independent. Oddly,
many of his best friends were Jewish. An example is Albert Kahn, the great
architect who designed Ford’s factory in Highland Park, Michigan. Despite
his controversial and at times publicly unpleasant27 views, some people
thought enough of Ford to encourage him to run for president in 1922. They
quickly retracted28 their support when they discovered Adolf Hitler had a
picture of Ford on his wall and often cited29 Ford as an inspiration30.
Ford was the only U.S. citizen mentioned in Hitler’s Mein Kampf.
Driven by his childhood sense of duty31 and obligation32, Ford was also an
active philanthropist33 throughout his life. He built a hospital for his
employees in Detroit, and in 1936 established the Ford Foundation for the
purposes of “advancing human welfare.” Since its founding the Ford
Foundation has issued more than $8 billion in grants34 worldwide. Ford died
at his estate35, Fairlane, in Dearborn, Michigan in 1947 at the age of 84.

Model T

Model T – the first widely available automobile powered by a gasoline
engine; mass-produced by Henry Ford from 1908 to 1927. Before this mode
Ford had producing Model A(The Model A was the designation of two cars made
by Ford Motor Company. The original Model A, also called the Fordmobile,
was the first car produced by Ford beginning production in 1903). There
were several cars produced or prototyped by Henry Ford from the foundation
of the company in 1903 until the Model T came along. Although he started at
the Model A, there weren’t 19 production models; some were only prototypes.
The production model immediately before the Model T was the Ford Model, an
upgraded version of the company’s largest success to that point, the Model
N. For some reason, the following was the Model A and not the Model U. The
Model T was the first automobile mass produced on assembly lines with
completely interchangeable parts, marketed to the middle class it changed
America through the assembly36 line. Auto manufacturers were selling their
cars for $5000, and only the wealthy could afford them. Using a ‘push’
moving assembly line and interchangeable parts, Henry Ford was able to
mass37 produce his Model T’s and sell them for just $850. This was less
than a wagon and team of horses cost. In 1913 Henry Ford replaced his
‘push’ moving assembly line with a conveyor belt38 assembly line. This way
was eight times faster because now the model T mechanically moved through
each station instead of by hand. To speed assembly, between 1915 and 1925
it was only available in one color, black, as black paint dried39 the
fastest; Henry Ford is reputed to have made the statement “Any customer can
have a car painted any color that he wants so long as it is black.” Model
Ts in different colors were produced from 1908 to 1914, and then again from
1926to 1927 By 1914 the assembly process for the Model T had been so
streamlined40 it took only 93 minutes to assemble a car; that year, Ford
produced more cars than all other automakers combined. By 1925 the Ford
Company was able to complete a new car every ten seconds. The Model T’s low
price allowed everyone that was making a good salary to buy a car. That
same year the price had dropped to $360.00. Ford was also fair to his
factory workers by paying them five dollars a day, which was almost double
the going wage. Newspapers said Ford “had a heart” and he would rather make
20,000 “prosperous41 and contented42” than seven millionaires. He also
provided an English School so his foreign-born employees could learn how to
read, write, and speak English.

Some interesting facts

“If we can go back to 1903, prior to the model T, there were only 144 miles
of paved road in the United States“
“Most people never travelled more than 20 miles from home in their entire
lifetime.“
“An affordable vehicle brought freedom to live where you wanted, freedom to
work where you wanted and freedom to vacation and play where you wanted.”
“Ford felt that single women should be given the opportunity to work
outside the home, outside the farms on which they had largely grown up”

Sir Nick Scheele, Ford president

Henry Ford also doubled the average wage and that put spending power into
many hands, creating a middle class.
Ford created the first inexpensive mass-produced automobile the Model T
and revolutionized American industry by developing and refining assembly
line manufacturing.
Henry Ford made his first car in 1896
Ford has about 79,000 salaried employees worldwide.
Ford Motor Co. earned $1.95 billion in the first quarter, up from a net
profit of $896 million a year earlier. Revenues rose to $38.8 billion, up
13 percent from $34.2 billion in 2003.

Literature

1. http://www.freep.com Detroit Free Press

2. http://www.ford.com/en/default.htm Ford Motor Company

3. http://www.nytimes.com The New York Times

4. http://news.bbc.co.uk BBC news

5. http://encyclopedia.thefreedictionary.com Model T

1. Pioneering – novatoriškas

2. Infancy – kūdikystė ankstyva vaikystė

3. Physician – gydytojas

4. Tremendously – didžiulis

5. affordable – prieinamas, įperkamas

6. lay – padėti paguldyti

7. span – trkumė

8. acquired – įsigytas

9. keen – siekiantis

10. perception – suvokimo

11. consolidating – sutvirtinti

12. decades – dešimtmetis

13. envisage – numatyti, įžvelgti

14. heritage – paveldas, palikimas

15. apprentice – mokinys

16. combustion – deginimas

17. resembled – būti panašiam

18. spindly – ištįsęs

19. resemblance – panašumas

20. humiliating – žeminantis

21. padded – pamuštas

22. refining – taurinti, daryti

23. undoubtedly – be abejo

24. attendance – lankymasis

25. sober – rimtas

26. totalitarian – totalitarinis

27. unpleasant – nemalonus

28. retracted – atsisakyti

29. cited – rėmėsi

30. inspiration – idėjomis

31. duty – pareiga

32. obligation – įsipareigojimai

33. philanthropist – filantropas

34. grants – subsidijos

35. estate – dvare

36. assembly – surinkimas, montažas

37. mass – daugybė

38. belt – ruožas

39. dried – išdžiūsta

40. streamlined – supaprastintas

41. prosperous – klestintis

42. contented – patenkintas

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