The History Of The Ford Motor Company Essay, Research Paper
The History of The
Ford Motor Company
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Henry Ford
It all started with a dream, a dream for all families to own a car, a dream
of one
man, Henry Ford.
Henry Ford was one of the most brilliant entrepreneurs in creating Ford
motors,
and the assembly line at the same time, it was his controversial
characteristics and unorthodox approach towards administrating the Ford Motor
Company which resulted
in the formation of one of the most successful corporations in the world. At
the turn of the century everything was booming, the growth of the economy and
stock market increased
the job opportunities as well as morals. As a result of this industrial
revolution, out of the woodwork came a humble yet driven man, Henry Ford.
Between the five dollar a day
plan, his policies on administrating the company, and his relations with his
customers,
Ford was often presented as a suspicious character. This controversial
behavior characterized the success of the company, it did not lead to his own
downfall as many suspect. The Anti-Semitic accusations, and the belief that Ford
was taking advantage of
his customers, were by far overshadowed by his brilliance and strong hand in
running
his company.
Of course, there were not always supporters of Henry Ford. If fact, there
were
many people who believed that Henry Ford was so controversial that it
prevented the potential of Fords from becoming greater than it is today. By the
mid twenties Ford was already the worlds most successful automobile company in
the world, but their great reputation would soon decline. Ford?s five dollars
a day pay plan for all employees signified the overwhelming success of the
company. Many believed this success was short-lived
with the new policies dealing with the workers which soon followed. With the
need to increase production and lower costs, in the mid 1930’s Ford cut all Ford
worker s wages in half, workers were expected to work faster, and harder,
department heads were ordered to ban all talking and whistling while work was in
progress. All of this was a plan by Ford
to make sure he knew every move of his workers, he was very possessive. Also,
Ford
began to fire older workers and hire younger ones, his ideology was that the
younger workers could work more productively and more efficiently, which in turn
would send more money flowing into his pockets. What resulted was quite humorous
in fact. Black hair
dye became a hot seller in the Detroit area . Older workers tried to disguise
their age by dying their hair black. Ford?s manipulation of his workers was
immoral and unjust.
There was no industrial democracy, workers were forced to do what they were
told or
would be out of a job.
Henry Ford s controversial behavior reflected badly on himself and on the
Ford Motor Company. The Anti-Semitic views expressed by Henry Ford could never
be denied, it was common knowledge in fact that Henry Ford was prejudice, he
even wrote an article
in the Dearborn Independent expressing his ideas that Jews were the cause of
many peoples problems. Henry Ford was sued by a man by the name Aaron Sapiro in
the early 1930’s. Sapiro had evidence that Ford threatened himself with
Anti-Semitic sentiments. Ford was recorded as saying, ?Sapiro is a shrewd
little Jew, the bible says Jews will return to
Palestine, but they want to get all the money out of America first. Sapiro
should be kicked out because he is trash.? The result of the trial was
humiliation for the Ford company
and Henry Ford himself. After a hung jury in the first trial, the case was
dropped when Ford
wrote a lengthy retraction and apologized for his statements. Ford s was
declining in
profits and production among the worlds best, all as a result of Henry Ford s
ego. Therefore, by 1931 Ford lowered in the ranks, controlling only 28% of the
market 2nd to General Motors
with 31%.
Henry Ford was the godfather of the automobile industry in the early 1900 s.
The development of his River Rouge plant was considered a industrial cathedral,
hundreds waited month after month in front of the employment building hoping to
be hired, to
foreign immigrants it meant hope and a successful future. The River Rouge
plant employed
over 50,000 employees, Pols, Lithuanians, Germans, almost every western
Europe country could be represented at the Ford Plant. Like a father Henry Ford
began educational programs, teaching his illiterate employees how to read
English, company picnics, and dinners were all part of Ford s policies that were
so unusual, yet so brilliant at that time.
Of the most controversial actions of Ford was his hiring of criminals, in
fact it was said that thousands of former criminals were taken on the Fords
payroll over the course
of the years, all at Mr. Fords Requests. Not only was this a highly
questionable decision, but it startled everyone. It was odd, especially when
there was such a demand to work
at Fords. Why would Henry Ford want to take the risk of hiring potentially
dangerous felons? Nobody would be able to answer this question better than Ford
s right hand man Harry Bennett. Bennett has said that Henry Ford was very
sympathetic towards criminals,
even that he would try and, in a sense, rehabilitate them. Not only did the
new workers please Henry Ford, but they also helped the company itself. Ford s
controversial new
policy of hiring criminals not only surprised the River Rouge workers, but it
swept across the nation. Many news articles were printed concerning Ford s
policies. In effect Ford
was receiving free advertising. Whether it was his intent or not, Ford s
ideas, sometimes eccentric helped market the company for the good. In 1914 Henry
Ford hired John R. Lee to update the companies labor policies. Five dollars a
day was to be split into half wages
and half profits. Ford employees would only receive profits when they met
specific standards of efficiency and were cleared by the sociology department.
On January 5, 1914 Henry Ford?s announcement of the incredible five dollar a
day plan swept the newspapers across the nation. The Detroit Journal announced,
The surprise of the labor leaders and
the consternation of manufacturers,, Henry Ford announced on Jan 5, 1914 that
a minimum wage of five dollars a day would be instituted immediately in the Ford
plants, along with a profit sharing plan for all male employees.
Not only did Henry Ford?s new deal shock the nation, it sent a tremendous
number
of workers to Detroit. For the next ten years people would do anything to
become a worker of one of Henry Ford?s plants. It was unheard of to be offered
five dollars a day by any automobile company. In fact the average salary for
most was a mere two fifty a day at GM and Chrysler?s. But Henry Ford?s five
dollars a day plan was truly an illusion, it allowed for greater control of his
workers. It was said that The five dollar a day plan was an important early
attempt at implementing a corporate welfare program. Ford wanted to
see his company prosper, his employees were a part of this company. The
development
of the Sociology department would allow Henry Ford to exploit his employees
private lives. Employees were advised by investigators on how to live in order
to receive his/hers share of the profits. The result of this was a tight knit
community with no corruption. This department also monitored the daily
happenings in the plant. In fact, the department had over 1000 informers who
would notify the department if any stealing or illegal plans were taking place.
Social workers conducted extensive interviews on subjects ranging from household
finances to sexual patterns. It was stated at that time that, the intrusion into
workers lives, in the minds of Ford officials, was a small price to pay for
increased wages, efficiency, production, and in the end profits for the Ford
Motor Company.
Many felt that this socialist system was infringing upon the democratic
rights of
the workers specifically the right to privacy. Observers claimed that workers
were forced to act like robots in order to keep their jobs, but this was not the
case. Henry Ford created the
stability and order that any corporation needed to succeed in the early 20th
century. Some may say that Ford was a sort of father to the workers he employed.
After all, a father is always harshest to the ones he cares for most. And that
was what Henry Ford was.
The financial success was extraordinary. By 1914 Ford s had over 600 cars
daily rolling off the assembly line. Between 1914 and 1921 earnings soared from
25 million to 78 million.
All of Ford?s effort s and expectations came to a pinnacle when, at the
close of 1923 there were 6,221 passengers cars in the city of Detroit, one for
every 6.1 persons. Of these 6,221 cars, 41% were Fords.
Henry Ford was not a greedy man, his sometimes unorthodox behavior and
policies epitomized the success of the company. Throughout the depression he
offered a sense of hope for his
employees. By offering jobs to outcasts he became very controversial, but he
had reasons. Ford wanted his workers to be moral citizens, people that could
offer The Ford Motor Company loyalty, leadership, and trust. A result of this
was the financial success of the company. Henry Ford knew what he had to do in
order to accomplish his goals. Ford knew he might not always be accepted in the
community, he also knew that this was the risk he had to take. It was all clear
when he said, ?We re going to expand this company, and you will see it grow by
leaps and bounds.?
Ford Motor Company
Ford Motor Company entered the business world without fanfare on June 17,
1903, when Henry Ford and 11 associates filed incorporation papers in the state
of Michigan. With an abundance of faith but only $28,000 in cash, the pioneering
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 America throughout the 20th century as Ford Motor Company, and
perhaps no other American firm is as well known around the globe.
At the time of its incorporation, Ford Motor Company was a tiny operation in
a converted Detroit wagon shop staffed with about 10 people. By the end of 1913,
just 10 years later, the company was producing half the cars in the United
States. Paralleling Ford Motor Company’s domestic growth was a foreign expansion
program that began just one year after the company was formed. On August 17,
1904, the first foreign branch, Ford Motor Company of Canada, Ltd., was
incorporated in Walkerville, Ontario. Production at this modest new plant began
in early 1905.
>From this small beginning grew a global network of manufacturing and
assembly plants, sales operations, parts depots and dealers, with Ford Motor
Company represented in more than 200 nations and territories spanning six
continents.
Today, Ford Motor Company is the world’s largest producer of trucks and the
second-largest producer of cars. The company has operations in more than 30
countries, and employs more than 340,000 men and women at its factories,
laboratories and offices around the world. Additionally, about 60,000 companies
worldwide supply Ford Motor Company with goods and services. The company’s
annual sales exceed the gross national products of many industrialized nations.
In 1998, Ford Motor Company sold more than 6.8 million vehicles worldwide. In
the Beginning
As with most great enterprises, Ford Motor Company’s beginnings were modest.
The company had anxious moments in its infancy, balancing precariously on the
brink of bankruptcy until cash inflows from sales began. The earliest record of
a shipment is July 20, 1903, approximately one month after incorporation, to a
Detroit physician. With the company’s first sale came hope. A worried group of
stockholders, warily eyeing a bank balance that had dwindled to $223.65,
breathed more easily, and a young Ford Motor Company had taken its first sure
steps. During the next five years, Henry Ford, as chief engineer and later as
president, directed a development and production program that started in a
converted wagon shop on Mack Avenue in Detroit and later moved to a larger
building at Piquette and Beaubien streets. In the company’s first 15 months,
1,700 Model A cars chugged out of the old wagon shop.
In 1988, Ford Motor Company made a strategic decision to develop a new global
car. Engineers in Europe, the United States, and other design and development
centers were already increasingly combining their resources on existing programs
with significant results. The similarities between the various world markets
also were growing, as legislation reached new levels of harmony and car buyers
on different continents found their product tastes and motoring needs were less
different than they had been in the past. And so, the mid-size family car
program known as CDW27 was developed for many countries. It was named Mondeo in
Europe, Taiwan, and the Middle East. Slightly modified, it went on sale in North
America as Ford Contour and Mercury Mystique. The Model T was designed for
simplicity. The Ford CDW27, on the other hand, was a highly sophisticated car
with two all-new, state-of-the-art, high-output engines; a new electronically
controlled transmission; new electronic traction control; air bags; anti-lock
brakes and other technological refinements desired by customers. CDW27 became
the prototype for a new approach to product development that is both highly
efficient and customer-driven a global "platform strategy" that uses
many common components to produce vehicles that are widely differentiated to
meet the varying needs of different regions. This program proved that true
globalization was possible, and that customer-focused teams were the way of the
competitive future.
Currently Ford Motor Company is ranked second on the Fortune 500 list of the
largest U.S. industrial corporations, based on sales. In 1998, worldwide sales
and revenues totaled $142.6 billion. Net income, excluding one-time items, was
$6.5 billion. Although Ford Motor Company is best known as a manufacturer of
cars and trucks, it produces other products, including industrial engines,
glass, plastics, and a wide range of automotive components. Ford also is
established in many other businesses-including financial services, automotive
replacement parts, and electronics. In 1997, the company created Visteon, a
wholly owned enterprise of Ford Motor Company, to explore and expand the market
for components around the world.
On November 1, 1993, Alex Trotman became chairman and chief executive officer
of Ford Motor Company. Born and raised in England and educated in Scotland,
Trotman had a world view. He spent the first half of his Ford career in product
planning in Europe, where he played a key role in establishing Ford of Europe.
Within three weeks of his appointment as Ford Motor Company chairman and CEO,
Trotman initiated a year long series of studies and development efforts to
further globalize the company. The results of this effort led to Ford 2000. Ford
2000 is an initiative that became effective on January 1, 1995, and began with
the consolidation of Ford’s North American and European operations. It continues
with a commitment to bring the entire Ford worldwide organization into a single
operation by the year 2000.
Ford 2000 created a global management team. This has allowed the company to
eliminate duplication, initiate best practices, use common components and
designs for the advantage of scale, and allocate resources wherever they are
needed to best serve market needs. Ford 2000 combines the power, resources, and
reach of a world company with the immediacy, intimacy, agility, and spirit of a
small one. In October 1999, the company announced plans to take Ford 2000 to the
next level by creating strategic business units that complement its global scale
and structure. These new units add a brand and regional influence that will
allow the company to better connect with consumers.
As Ford Motor Company approaches its second century and the new millennium, a
member of the Ford family again holds a top leadership position. William Clay
Ford, Jr., a great-grandson of Henry Ford, was elected chairman by the board of
directors, effective January 1, 1999. The board elected Ford Automotive
Operations President Jacques Nasser as president and chief executive officer,
also effective January 1, 1999. The changes coincided with the retirement of
Trotman, who had served as chairman, CEO and president during his 43 years of
service to Ford. Ford Motor Company is committed to fully utilizing the rich
diversity of its human resources. Company leadership believes that diversity
will be the engine that powers the creative energy of corporations of the 21st
century. Successful companies will be those that are able to draw on the diverse
talents of their people to stay on the innovative and competitive edges of their
fields.
Ford Motor Company started this century, with a single man envisioning
products that would meet the needs of people in a world on the verge of
high-gear industrialization. The company is ending the century with a worldwide
organization that retains and expands Henry Ford’s heritage by developing
products that serve the varying and ever-changing needs of people in the global
community.
http://www.ford.com/default.asp?pageid=95
http://www.fomoco.com/history.html
http://www.coen.com/info/casehist/ford/
http://www.gaco.com/02aps_06pfr_ch3.html
http://www.businesshistory.net/ford.html