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, whenHenry Ford and 11 business associates signed the company’s articles ofincorporation. With $28,000 in cash, the pioneering1 industrialists gavebirth to what was to become one of the world’s largest corporations. Fewcompanies are as closely identified with the history and development ofindustry and society throughout the 20th century as Ford Motor Company. As with most great enterprises, Ford Motor Company’s beginnings weremodest. The company had anxious moments in its infancy2 The earliest recordof a shipment is July 20, 1903, approximately one month afterincorporation, to a Detroit physician3. With the company’s first sale camehope—a young Ford Motor Company had taken its first steps. Mass Production on the Line Perhaps Ford Motor Company’s single greatest contribution to automotivemanufacturing was the moving assembly line. First implemented at theHighland Park plant (in Michigan, US) in 1913, the new technique allowedindividual workers to stay in one place and perform the same taskrepeatedly on multiple vehicles that passed by them. The line provedtremendously4 efficient, helping the company far surpass the productionlevels of their competitors and making the vehicles more affordable5. The First VehiclesHenry Ford insisted that the company’s future lay6 in the production ofaffordable cars for a mass market. Beginning in 1903, the company beganusing the first 19 letters of the alphabet to name new cars. In 1908, theModel T was born. 19 years and 15 million Model T’s later, Ford MotorCompany was a giant industrial complex that spanned7 the globe. The yearsbetween the world wars were a period of hectic expansion. In 1917, FordMotor Company began producing trucks and tractors. In 1919 a conflict with
stockholders over the millions to be spent building the giant Rougemanufacturing complex in Dearborn, Michigan led to the company becomingwholly owned by Henry Ford and his son, Edsel, who then succeeded hisfather as president. In 1925, Ford Motor Company acquired8 the LincolnMotor Company, thus branching out into luxury cars, and in the 1930’s, theMercury division was created to establish a division centered on mid-pricedcars. Ford Motor Company was growing.Becoming a Global CompanyIn the 50’s came the Thunderbird and the chance to own a part of Ford MotorCompany. The company went public and, on Feb. 24, 1956, had about 350,000new stockholders. Henry Ford II’s keen9 perception10 of political andeconomic 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 theEuropean Economic Community’s arrival. The company established its NorthAmerican Automotive Operations in 1971, consolidating11 U.S., Canadian, andMexican operations more than two decades12 ahead of the North American FreeTrade Agreement. Ford Motor Company started the last century with a single manenvisioning13 products that would meet the needs of people in a world onthe verge of high-gear industrialization. Today, Ford Motor Company is afamily of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda,Jaguar, Land Rover, Aston Martin, and Volvo. The company is beginning itssecond century of existence with a worldwide organization that retains andexpands Henry Ford’s heritage14 by developing products that serve thevarying 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 wastaught largely by his mother, who instilled in him a strong sense ofresponsibility, duty, and self-reliance.Ford grew up on a farm and might
easily have remained in agriculture. But something stronger pulled atFord’s imagination: mechanics, machinery, understanding how things workedand what new possibilities lay in store. As a young boy, he took aparteverything he got his hands on. He quickly became known around theneighborhood for fixing people’s watches and became an excellent self-taught mechanic and machinist. At age 16 he left the farm and went tonearby Detroit, a city that was process of becoming an industrial giant.There he worked as an apprentice15 at a machine shop. Months later he beganto work with steam engines at the Detroit Dry Dock Co., where he first sawthe internal combustion16 engine, the kind of engine he would later use tomake his automobiles. When he was 28 Ford took a job with Thomas Edison’sDetroit Illuminating Company, where he became chief engineer. In his spare time he began to build his first car, the Quadricycle. Itresembled17 two bicycles positioned side by side with spindly18 bicycle-like wheels, a bicycle seat, and a barely visible engine frame. Some saidit bore a resemblance19 to a baby carriage with a two-cylinder engine.. Itwas the first “horselesscarriage” that he actually built. It’s a far cryfrom today’s cars and even from what he produced a few years later, but ina way it’s the starting point of Ford’s career as a businessman. Until theQuadricycle, Ford’s tinkering had been experimental, theoretical—like thegas engine he built on his kitchen table in the 1890’s, which was just anengine with nothing to power. The Quadricycle showed enough popularity andpotential that it launched the beginning of Ford’s business ventures. InJune 1896, Ford took an historic ride in his first automobile that wasobserved by many curious Detroit on-lookers. The Quadricycle broke down ina humiliating20 scene. By 1899 Ford created a more proper-looking motorcarwith the help of wealthy businessman William Murphy. It had high wheels, apadded21 double bench, brass lamps, mud guards, and a “racy” look. In thesame year Ford founded the Detroit Automobile Company. Within 3 years Fordhad built an improved, more reliable Quadricycle, using a four-cylinder, 36horsepower-racing engine. In 1901 Ford car beat what was then the world’sfastest automobile in a race before a crowd of eight thousand people inGrosse Pointe, Michigan. The publicity he received for this victory allowed Ford to finance apractical laboratory for refining22 his auto ideas. In 1903 Ford launchedhis own car company, The Ford Motor Car Company, and by January 1904 he hadsold 658 vehicles. By 1908 he built the famous Model T(about this model Iwill 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 Tincreased to 720,000 by 1916. Ford was able to make a reliable and inexpensive automobile primarilybecause of his introduction of the innovative moving assembly line into theprocess of industrial manufacturing. The assembly line is a system forcarrying an item that is being manufactured past a series of stationaryworkers who each assemble a particular portion of the finished product. Theassembly line was undoubtedly23 Ford’s greatest contribution to industry.It revolutionized manufacturing and made it possible to make uniformproducts quickly and affordably. Ford personally controlled most aspects of his company operations. Heshocked the industrial world in 1914 by paying his workers the very highwage of $5 a day. In exchange for this high wage Ford demanded of hisemployees regular attendance24 at work, as well as a serious and sober25private life. He required all immigrant laborers learn English and becomecitizens of the United States.Ford was intrigued by the ideas of Frederick Taylor (1856-1915), author ofThe Principles of Scientific Management. Scientific management was aphilosophy of standardizing the behavior of workers to increase efficiencyand production. Ford designed his factories to fit human performance, butthen demanded his workers perform according to the factory design. He wasone of the first to introduce time clocks into his business operations tomonitor the exact minute a worker arrived at his job, took his lunch, andwhen 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 businesspractices. It was shocking for most people in the United States to read ofHenry Ford’s anti-Semitism, which he published weekly for two years inunsigned articles in his own newspaper, The Dearborn Independent. Oddly,many of his best friends were Jewish. An example is Albert Kahn, the greatarchitect who designed Ford’s factory in Highland Park, Michigan. Despitehis controversial and at times publicly unpleasant27 views, some peoplethought enough of Ford to encourage him to run for president in 1922. Theyquickly retracted28 their support when they discovered Adolf Hitler had apicture 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 anactive philanthropist33 throughout his life. He built a hospital for hisemployees in Detroit, and in 1936 established the Ford Foundation for thepurposes of “advancing human welfare.” Since its founding the FordFoundation has issued more than $8 billion in grants34 worldwide. Ford diedat 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 gasolineengine; mass-produced by Henry Ford from 1908 to 1927. Before this modeFord had producing Model A(The Model A was the designation of two cars madeby Ford Motor Company. The original Model A, also called the Fordmobile,was the first car produced by Ford beginning production in 1903). Therewere several cars produced or prototyped by Henry Ford from the foundationof the company in 1903 until the Model T came along. Although he started atthe Model A, there weren’t 19 production models; some were only prototypes.The production model immediately before the Model T was the Ford Model, anupgraded version of the company’s largest success to that point, the ModelN. For some reason, the following was the Model A and not the Model U. TheModel T was the first automobile mass produced on assembly lines withcompletely interchangeable parts, marketed to the middle class it changedAmerica through the assembly36 line. Auto manufacturers were selling theircars for $5000, and only the wealthy could afford them. Using a ‘push’moving assembly line and interchangeable parts, Henry Ford was able tomass37 produce his Model T’s and sell them for just $850. This was lessthan a wagon and team of horses cost. In 1913 Henry Ford replaced his‘push’ moving assembly line with a conveyor belt38 assembly line. This waywas eight times faster because now the model T mechanically moved througheach station instead of by hand. To speed assembly, between 1915 and 1925it was only available in one color, black, as black paint dried39 thefastest; Henry Ford is reputed to have made the statement “Any customer canhave a car painted any color that he wants so long as it is black.” ModelTs in different colors were produced from 1908 to 1914, and then again from1926to 1927 By 1914 the assembly process for the Model T had been sostreamlined40 it took only 93 minutes to assemble a car; that year, Fordproduced more cars than all other automakers combined. By 1925 the FordCompany was able to complete a new car every ten seconds. The Model T’s lowprice allowed everyone that was making a good salary to buy a car. Thatsame year the price had dropped to $360.00. Ford was also fair to hisfactory workers by paying them five dollars a day, which was almost doublethe going wage. Newspapers said Ford “had a heart” and he would rather make20,000 “prosperous41 and contented42” than seven millionaires. He alsoprovided an English School so his foreign-born employees could learn how toread, write, and speak English.Some interesting facts
“If we can go back to 1903, prior to the model T, there were only 144 milesof paved road in the United States““Most people never travelled more than 20 miles from home in their entirelifetime.““An affordable vehicle brought freedom to live where you wanted, freedom towork where you wanted and freedom to vacation and play where you wanted.”“Ford felt that single women should be given the opportunity to workoutside 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 intomany hands, creating a middle class.Ford created the first inexpensive mass-produced automobile the Model Tand revolutionized American industry by developing and refining assemblyline manufacturing.Henry Ford made his first car in 1896Ford has about 79,000 salaried employees worldwide.Ford Motor Co. earned $1.95 billion in the first quarter, up from a netprofit of $896 million a year earlier. Revenues rose to $38.8 billion, up13 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