Henry Ford, An American LegendAsk the question, "who invented the automobile?" and a high percentage of the answers will be, "Henry Ford." This popular misconception is a tribute to the man who made
the automobile possible for the millions.
Although it is generally conceded that the automobile was actually conceived and born in Europe, a number of American and European experimenters worked on the idea at approximately the same time in the late 1800's. Full credit can be given to Henry Ford, however, for building the automobile millions could afford. His guiding philosophy was: "I will build a motor car for the great multitude…it will be so low in price that no man…will be unable to own one."
Thanks to Henry Ford's vision and zeal, the Ford Motor Company was born.
Three giants—steel, oil and transportation—set the stage for Henry Ford and the beginning of Ford Motor Company. In 1864, a year after Ford's birth, the open-hearth process was developed and the modern age of steel began.
The following year, the oil industry laid in the valley of the Allegheny River the first short stretch of the vast network of pipelines that would eventually fuel a parade of 75 million automobiles. In 1869, the American continent was spanned with iron rails.
The Ford Motor Company was launched in a small converted wagon factory in Detroit on June 16, 1903. Its assets consisted of tools, appliances, machinery, plans, specifications, blueprints, patents, a few models and $28,000 in cash supplied by 12 investors.
Along with Henry Ford, the first stockholders of the infant corporation were a coal dealer, the coal dealer's bookkeeper, a banker who trusted the coal dealer, two brothers who owned the machine shop that made the engines, a carpenter, two lawyers, a clerk, the owner of a notions store and a man who made windmills and air rifles.
The first car offered for sale was described as "the most perfect machine on the market" and "so simple that a boy of 15 can run it." The first sale was made to Dr. E. Pfennig, of Chicago, who bought the car a month after the company's incorporation, much to the delight of the worried stockholders who were nervously eyeing a bank balance that had dwindled to $223.
For the next five years, young Henry Ford, first as chief engineer and later as president, directed an all-out development and production program which shifted in 1905 from the rented quarters on Detroit's Mack Avenue to a much larger building at Piquette and Beaubien streets. A total of 1,700 cars—the early Model A's—came sputtering out of the old wagon factory during the first 15 months of operation.
Between 1903 and 1908, Henry Ford and his engineers feverishly went through 19 letters of the alphabet—from Model A to Model S. Some of these cars were experimental models which never reached the public. Some had two cylinders, some had four, and one had six; some had a chain drive and some a shaft drive; and in two the engine was placed beneath the driver's seat. Perhaps the most successful of the production cars was the Model N—a small, light, four-cylinder machine which went on the market at $500. A $2,500 six-cylinder limousine, the Model K, sold poorly.
The Model K's failure, along with Mr. Ford's insistence that the company's future lay in the production of inexpensive cars for a broad market, caused increasing friction between Mr. Ford and Alexander Malcomson, the Detroit coal dealer who had been instrumental in rising the original $28,000. As a result, Malcomson left the company and Mr. Ford acquired enough of his stock to increase his holdings to 58-1/2 percent. He became president in 1906, succeeding John S. Gray, a Detroit banker, on his death.
But disagreements among stockholders did not threaten the young company's future nearly as seriously as did a man named George Selden. Selden had a patent on "road locomotives" powered by internal combustion engines. To protect his patent he formed a powerful syndicate to license selected manufacturers and to extract royalties for every "horseless carriage" built or sold in America.
Hardly had the doors been opened at the Mack Avenue factory when Selden's syndicate filed suit against the Ford Motor Company, which bravely had gone into business without a Selden license.
Other, stronger, automobile companies had paid royalties rather than risk battle with the Selden syndicate. But Henry Ford was convinced that George B. Selden's patent on all road vehicles powered by internal combustion engines was invalid and should be resisted. So he and his partners fought the suit.
Eight years later, in 1911, after costly and incredibly complicated court proceedings, Ford Motor Company won the battle which freed it, as well as the entire booming automobile industry, from this threat to further development.
Meanwhile, despite harassment from Selden's syndicate, the little company flourished. Up to this time, the automobile had been a rich man's toy. But it was Henry Ford's dream to build a rugged, simple car at a price low enough for anyone to afford. That dream car was the Model T, the most famous automobile ever built. Although it ultimately sold for as low as $260, without extras, nearly everybody liked the extras and the average price was about $400.
The Model T chugged into history on October 1, 1908. Henry Ford called it the "universal car." It became the symbol of low-cost, reliable transportation that could get through when other cars stuck in the muddy roads. The Model T won the approval of millions of Americans, who affectionately dubbed it "Lizzie." The first year's production of Model T's reached 10,660, breaking all records for the industry.
By the end of 1913, Ford Motor Company was producing half of all the automobiles in the United States. In order to keep ahead of the demand, Ford initiated mass production in the factory. Mr. Ford reasoned that with each worker remaining in one assigned place, with one specific task to do, the automobile would take shape more quickly as it moved from section to section and countless man-hours would be saved.
To test this theory, a chassis was dragged by rope and windlass along the floor of the Highland Park, Michigan, plant in the summer of 1913. Modern mass production was born! Eventually, Model T's were rolling off the assembly lines at the rate of one every 10 seconds of each working day.
Henry Ford startled the world on January 5, 1914, by announcing that Ford Motor Company's minimum wage would be $5 a day—more than double the existing minimum rate. Mr. Ford felt that since it was now possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. Ford considered the payment of $5 for an eight-hour day the finest cost-cutting move he ever made. "I can find methods of manufacturing that will make high wages," he said. "If you cut wages, you just cut the number of your customers."
The Model T started a rural revolution. The $5 day and the philosophy behind it started a social revolution. The moving assembly line started an industrial revolution.
In the 19 years the Model T was in production, 15,007,033 cars were manufactured and sold in the United States alone. Ford Motor Company became firmly established as a giant industrial complex that spanned the globe. During these years of feverish expansion, the company: · Moved to a larger plant in Highland Park, Michigan (1910) · Established the industry's first branch assembly plant, in Kansas City, Missouri (1911) · Established new plants in Philadelphia, Minneapolis, Long Island City and Buffalo to keep up with demand for cars (1913) · Began producing trucks and tractors (1917) · Began construction of the giant Rouge complex in Dearborn, Michigan (1917) · Mass-produced the "Eagle" boats, famous World War I submarine chasers (1918) · Became wholly owned by Henry Ford and his son, Edsel, who succeeded his father as president (1919) · Bought the Lincoln Motor Company (1922) · Built the first of 196 Ford Tri-Motor airplanes used by America's first commercial airlines (1925).
By 1927, time had run out on the Model T. Improved but basically unchanged for so many years, it was losing ground to the more stylish, more powerful machines being offered by Ford's competitors. On May 31, Ford plants across the country closed for six months to retool for the new Model A.
The Model A was a vastly improved car in every respect. More than 4,500,000 of them, in several body styles and a wide variety of colors, rolled onto the nation's highways between late 1927 and 1931.
But the Model A was finally pushed aside by a consumer demand for even more luxury and power. Ford Motor Company was ready with plenty of both in its next entry—its first V-8—which was introduced to the public on April 1, 1932. Ford was the first company in history to cast a V-8 block in one piece successfully. Experts told Mr. Ford it couldn't be done. It was many years before Ford's competitors learned how to mass-produce a reliable V-8. In the meantime, the Ford car and its powerful engine became a favorite of performance-minded Americans.
Civilian car production came to a sudden halt in 1942 when it became necessary for the company to throw all of its resources into the war effort. Initiated by Edsel Ford, the giant wartime program produced 8,600 four-engined B-24 "Liberator" bombers, 57,000 aircraft engines and more than a quarter of a million tanks, tank destroyers and other pieces of war machinery in less than three years.
Edsel Ford died in 1943, just as his program was reaching its maximum efficiency. A saddened, older Henry Ford resumed the presidency until the end of World War II when he resigned for the second time. His oldest grandson, Henry Ford II, became president on September 24, 1945. He would serve as chairman of the board from July 13, 1960 until March 13, 1980. His retirement marked the first time in company history that a Ford was not at the helm. He remained chairman of the Finance Committee until his death in 1987.
Even as Henry Ford II drove the industry's first postwar car off the assembly line, he was making plans to reorganize and decentralize the company. Losing money at the rate of several million dollars a month, the Ford Motor Company was in critically poor condition to resume its prewar position as a major force in the fiercely competitive auto industry. Much the same as his grandfather faced the problems of the company's beginning, young Henry Ford II tackled the job of building an automobile company all over again.
Having finally relinquished the company's operation to his grandson, Mr. Ford lived quietly with his wife, Clara, at their estate, "Fair Lane," in Dearborn until his death on April 7, 1947, at the age of 83.
Soon after his death, his two younger grandsons, Benson and William Clay, assumed greater responsibilities with the company.
In 1948 all the major automotive companies presented the public with dramatic changes in their latest offerings. After three years of restyled '42 vehicles, a prosperous postwar America was ready for a design revolution in the car industry. On June 8, 1948 the 1949 Ford was introduced with much fanfare at the New York Waldorf Astoria. The sleek, smooth-sided '49 Ford featured independent front suspension, and new rear quarter windows that opened. The integration of body and fenders was an innovation which set the standard for the future of automotive design. The '49 Ford gave Ford Motor Company the momentum to regain second place in the competitive U.S. auto-making arena. In 1949, Ford sold approximately 807,000 cars bringing profits up to $177 million from $94 million in the previous year. This marked the highest volume of vehicles sold since 1929.
Henry Ford II's postwar reorganization program rapidly restored the company's health and launched it on an expansion program which resulted in 44 manufacturing plants, 18 assembly plants, 32 parts depots, two huge proving grounds and 13 engineering and research facilities in the United States. Besides substantially increasing Ford's vehicle production facilities, this program established company diversification. The new businesses included car financial (Ford Motor Credit Company), insurance (The American Road Insurance Company), automotive replacement parts (Ford Parts and Service Division), electronics, computers, space technology and more.
Ford Financial Services was formed in October 1987 to provide a stable source of earnings to counterbalance the company's automotive business. A wholly owned subsidiary of Ford Motor Company, Ford Credit is the largest company in the world dedicated to automotive finance. With more than 8 million customers in 36 countries, it has a diverse workforce of more than 16,000 employees. It also serves the financing needs of more than 11,000 dealers with wholesale, capital and mortgage loans. Ford Credit is a leader in customer satisfaction and loyalty, having earned more customer and dealer satisfaction awards from J. D. Power and Associates than any other auto finance provider.
Ford Motor Company was only a year old when it inaugurated its foreign expansion program in 1904 with the opening of a modest plant in Walkerville, Ontario, named Ford Motor Company of Canada, Ltd.
Today, Ford has manufacturing, assembly or sales facilities in 30 countries worldwide. Ford produces millions of cars and trucks annually; it is a leader in automobile sales outside North America.
Ford Motor Company became a publicly owned corporation in January, 1956. Currently, the company has approximately 700,000 stockholders.
The focus of the 1960's was on youth. A young president Kennedy led an economically healthy, upbeat America. Ford Motor Company recognized a strong market demand for an inexpensive sporty new vehicle targeted to the young buyer. Lee Iacocca, then the General Manager of the Ford Division, personally sold the startling new concept to Henry Ford II and a skeptical finance department. Start-up costs were a mere $75 million due to the incorporation of the existing Falcon engine, transmission and axle, but the return investment would prove phenomenal. The Mustang exploded onto the scene in a 1964 introduction that drew throngs to showrooms across the country. Such intense interest hadn't been witnessed since the introduction of the Model A. The sharp, 4-seat 1965 Mustang became the "darling" of America. The "love affair" brought about the sale of 100,000 Mustangs in the first 100 days. Total sales for the year reached 418,812, far exceeding the 100,000 projected by market research. After the failure of the Edsel, Ford's design innovation of the late 1950's, the Mustang's record-setting first year sales and $1 billion in profits was a much needed success story.
Another Ford Motor Company success story followed on the heels of the recession of the early 1980's. Skyrocketing gas prices and declining car sales prompted Ford to create a vehicle both fuel-efficient and radically different from a design standpoint. The goal was to produce a world-class leader in the middle to upper middle market segment. The result was the Ford Taurus and Mercury Sable. These automobiles set the stage for future design trends in the auto industry, and embodied a new commitment to quality throughout the ranks at Ford. At a time when Ford's losses were staggering, the $3.5 billion gamble on the Taurus' success represented dramatic decision-making. No one was certain how the public would respond to a daring new aerodynamic look. Ford took the risk. Team Taurus was established with the objective of achieving perfection in every detail. With support from top management, the team members were uncompromising in their commitment. Everyone became involved in the development of Taurus, from the company's top executives to assembly line workers. Feedback was solicited and suggestions implemented. A feeling of dedication prevailed. Ford Motor Company worked together on all levels to make the Taurus a winner.
The effort paid off in a big way. Taurus' introduction had been postponed once — to Dec. 26, 1985 — when the team discovered that quality was not up to its rigorous standards. As it turned out, even the busy holiday season and cold weather didn't hamper the late arrival. The Taurus was named 1986 Car of the Year and in 1987 was the No. 1 selling car in America.
Ford's product innovation continued into the next decade, with 1993's debut of the Ford Mondeo, European "Car of the Year" and the first of Ford's family-size world cars, and the redesigned Mustang. Introduced as a 1994 model, the Mustang quickly became another hit with consumers. Also new for 1994 were the Ford Aspire and Ford Windstar minivan. The Ford Contour and Mercury Mystique, North American versions of the world car, outsold their nearest Japanese competitor by 88,000 units in the 1995 calendar year. North America then saw Ford take the wraps off the redesigned Ford Taurus and Mercury Sable, America's favorite cars, revealing the first major changes to the vehicles since they stormed the market in the late 80s. It was an important unveiling for Ford, and many of the country's automotive writers gave the restyled versions enthusiastic reviews. A redesigned F-Series pickup and the new Fiesta and Galaxy minivans in Europe also were introduced. Ford was prepared — by the end of the decade — to increase its new products by 50 percent, cut development time by one-third, and reduce costs by billions of dollars.
The world cars were the result of a massive globalization program that amounted to the most dramatic corporate overhaul in Ford's history. The driving force behind this complex realignment was the company's simple goal: continuously produce better products at a lower cost.
To an earlier generation of Americans, Ford Motor Company was Henry Ford, the Model T and the tri-motor "Tin Goose."
Ford is the world's largest producer of trucks, and the second largest producer of cars and trucks combined. We sell more than 70 different types of vehicles worldwide, marketed under the Ford, Lincoln, Mercury, Jaguar and Aston Martin brands. Ford also has equity interests in Mazda Motor Corporation (33.4 percent) and Kia Motors Corporation (9.4 percent).
Today, Ford's plans for continued expansion domestically and overseas and the company's wide diversification mean ongoing employment opportunities around the globe.
As Ford approaches its own centennial in 2003 and the automotive industry begins its second century, Henry Ford's remarkable achievement is underscored. Through years of prosperity and hardship, through war and peace, Ford Motor Company grew from one man, a small garage and a quadricycle, to a mighty American force contributing to international economic stability. Meanwhile, the nation became an industrial giant of unmatched strength and vitality.
The Ford story, in a sense, is the story of the American Century.
Yes, as Henry Ford's life demonstrated, the future is the challenge.
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Revised: Thursday, 26-Jan-2012 8:19 PM EDT