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

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http://www.businesshistory.net/ford.html