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 220th century as Ford Motor Company.

As with most great enterprises, Ford Motor Company’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 pplant (in Michigan, US) in 1913, the new technique allowed

individual workers to stay in one place and perform the same task

repeatedly on multiple vehicles that passed by them. The line proved

tremendously4 efficient, helping the company far surpass the production

levels of ttheir competitors and making the vehicles more affordable5.

The First Vehicles

Henry Ford insisted that the company’s future lay6 in 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 division 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. The 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 wwhat 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 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. 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 uundoubtedly23 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 iintrigued 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 pperform 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, aand 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 tto $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. uunpleasant – 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