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The Ford Motor Company

Essay by review  •  August 27, 2010  •  Case Study  •  1,594 Words (7 Pages)  •  1,956 Views

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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-24E 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

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