Facility The Ford Motor Company example essay topic

Ford Motor Company Address: The American Road Dearborn, Michigan 48121, USA Public Company Incorporated: July, 1918 Employees: 383,300 Sales: $62.17 billion Stock Index: New York, Boston, Pacific Midwest, Toronto, Montreal, London Until recently, the Ford Motor Company has been one of the most dynastic of American enterprises, a factor which has both benefited the company and has brought it to the brink of disaster. Today Ford is the second largest manufacturer of automobiles and trucks in the world, and it's operations are well diversified, both operationally and geographically. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel. It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over 100 countries. Henry Ford I, the founder of Ford Motor Company, was born on a farm near Dearborn, Mi in 1869. From boyhood, he had a talent for engineering, but it was not until 1890 that he commenced his engineering career as an employee of the Detroit Edison Company.

Ford's superiors at the electric company felt his hobby distracted him from his regular occupation, and despite his promotion to chief engineer, he was forced to quit in 1899. Shortly afterwards, with financial backing from private investors, Ford established the Detroit Automobile Company. He later withdrew from the venture after a disagreement with business associates over numbers and prices of cars to be produced. Working independently in a small shed in Detroit, Henry Ford developed two four cylinder, 80-horsepower race cars called the "999" and the "Arrow", with $28,000 of capital raised from friends and neighbors.

Henry Ford established a new shop on June 16, 1903. In this facility the Ford Motor Company began production of a two cylinder, eight-horsepower design called the Model A. The company produced 1,708 of these models in the first year of operation. Henry Ford and his engineers designed several automobiles, each one designated by a letter of the alphabet: these included the small, four cylinder Model N (which sold for $500), and the more luxurious six-cylinder Model K (which sold poorly for $2500). In October 1908, Ford introduced the durable and practical Model T. Demand for this car was so great that Ford was forced to enlarge it's production facilities. Over 10,000 Model T's were produced in 1909. In developing the assembly line, Ford noted that the average worker performed several tasks in the production of each component, and used a variety of tools in the process.

He improved efficiency by having each worker specialize in one task, with one tool. The component on which the employee worked was conveyed to him on a moving belt, and after allowing a set time for the task to be performed, the component was moved on to the next operation. Slower workers thus needed to increase their work rate in order to maintain production at the rate determined by the speed of the belts. When the US became involved in World War I (April 1917), the Ford Motor Company placed it's vast resources at the disposal of the government. For the duration of the war, Ford Motor produced large quantities of automobiles, trucks, and ambulances, as well as Liberty airplane motors, whippet tanks, Eagle "submarine chasers" and munitions. In 1918, Henry Ford officially retired from the company, naming his son, Edsel, president.

At the end of the war Henry and Edsel disagreed with fellow stockholders over the planned expenditure of several million dollars for a large new manufacturing complex at River Rouge. The Fords eventually resolved the conflict by buying out all the other shareholders. Between January 1 and April 19, 1921, the Ford Motor Company had $58 million in financial obligations due, and only $29 million available to meet them. With little time available, Henry Ford transferred as many automobiles as possible to the dealerships.

This generated $25 million. $28 million more was produced by purchasing the Detroit, Toledo & Ironton railroad. This, and funds from other sources not only saved the company from bankruptcy, but enabled Ford to acquire the financially troubled Lincoln Motor Company in 1922. After 18 years producing the Model T, the Ford Motor Company faced it's first serious threat from a competitor.

In 1926, the General Motors Corporation introduced it's Chevrolet automobile, a more stylish and powerful car. Since sales of the Model T dropped sharply, Ford decided to discontinue it in favor of the new Model A. The economic crisis of October 1929, which lead to the Great Depression, forced many companies to close. Ford Motor Company managed to remain in business, despite losses as much as $69 million per year. If it wasn't for the sales of the Model A, which sold 4.5 million units between 1927 & 1931, Ford's situation would have been much worse. Unionization activities climaxed in April 1941 when Ford employees went on strike. The NLRB called an employee election, and when the ballots were tabulated in June, the United Automobile Workers union drew 70% of votes.

Henry Ford, an avowed opponent of labor unions, suddenly altered his stand. He agreed to contract with union representatives which met all worker demands. The Willow Run Aircraft plant was completed in May, 1942, 5 months after the bombing of Pearl Harbor. Willow Run was the largest manufacturing facility in the world occupying 2.5 million square feet of floor space, with an assembly line 3 miles long. Adjacent to the plant were hangars covering 1.2 million square feet and a large air field. The airplanes produced in this facility were four-engine B-24 E liberator bombers.

During the war, other Ford Motor plants produced a variety of engines, as well as trucks, jeeps, M-4 tanks, M-10 tank destroyers and transport gliders. By the end of the war, when Willow Run was turned over to the government, Ford had produced 8,600 B-24 E bombers and over 57,000 aircraft engines. Due to the sudden death of Edsel ford, Henry Ford II, age 28, was named president of the Ford Motor Company in September, 1945. No longer supported by government contracts, the company began to lose money at a rate of $10 million per month. In 1946, Henry Ford II hired a group of ten most talented financial experts to spend several years reconstructing the company's system of financial management. Over the previous two decades, the Ford Motor Company had been a notable pioneer and achiever in the automotive industry.

Ford had produced its 25 millionth automobile in 1937 and the following year, its Lincoln Division introduced the Mercury line, which proved highly successful in the growing market for medium priced automobiles. Ford's good image had been further enhanced by its contributions to the Allied effort in W.W. II; even Joseph Stalin had kind words for the enterprising American company. Before he died, Henry Ford I had created two classes of Ford stock. The B class was reserved for family members and constituted the controlling 40% voting interest.

The ordinary common shares were to be retained by the company until January 1956, when they were to be offered to the public for the first time. The Ford Motor Company purchased the Philco Corporation in 1961 and established a tractor division in 1962. The following year Ford introduced it's highly successful Mustang; more than 500,000 of these cars were sold in the first 18 months. Ford Motor Company subsidiaries in Europe entered a period of strong growth and high profitability in the early 1970's, and these subsidiaries produced components for the Pinto, a sub-compact introduced in the US in 1971. Pinto models from 1971 to 1976 drew a great deal of attention after numerous incidents involving explosions of the gas tank in a rear-end collision. The unfavorable publicity from news reports greatly damaged Ford's public image.

The Ford Company encountered severe economic loses as a result of a reduction in market share, high costs incurred by labor contracts and the development of cars that met the new federal standards. In 1980, the company lost $1.54 billion despite strong profits from the truck division and European operations. Ford lost a further $1.06 billion in 1981 and $658 million in 1982 while trying to effect a recovery; its market share fell from 23.6% in 1978 to 16.6% in 1981. Company officials studied Japanese methods of industrial management, and worked more closely with Toyo Kogyo, the Japanese manufacturer of Mazda automobiles (Ford gained a 25% share of Toyo Kogyo in November 1979, when a Ford subsidiary merged with the company).

Ford imported Mazda cars and trucks, and in many ways treated Toyo Kogyo as a small car division. In 1984, with costs reduced, Ford started to repurchase 30 million shares (about 10% of the company's stock). It's production of cars in Mexico increased and output was stepped up in South Korea. The following year Ford introduced the Taurus, a modern full-size automobile which had taken 5 years to develop at a cost of $3 billion. The Taurus proved highly successful and won several design awards. Sales and profits reached record levels in 1984, and in 1986 Ford surpassed General Motors in income for the first time since 1924.

In addition, Ford's market share increased to just under 20%. Ford Motor purchased several companies in the mid 1980's, including the First Nationwide Financial Corporation, the New Holland tractor division of Sperry and 30% of Oto san, the automotive subsidiary of the Turkish Koc Group. The Ford Motors Company was, is, and will continue to be one of the greatest American enterprises.

Bibliography

Working for Ford. Author: Huw Bey non. Published: London, by Penguin, 1984.
International Directory of Company Histories. Copyright by Reference Publishers International, Ltd. 1988.
Published: St. James Press, Chicago, 1988.