A leading automotive maker for almost a century.
Eight years after the motorcar was first offered for sale in 1895, Henry Ford and eleven other investors founded the Ford Motor Company with less than $30,000 in capital. Within years, employing mass-production techniques such as gravity slides and chain conveyors, Ford had revolutionized the industry. Today, Ford ranks as one of the largest automotive companies in the world, with 2001 sales surpassing $131.5 billion.
Henry Ford, founder of the Ford Motor Company, whose workers are shown here assembling cars in the late 1940s, pioneered the mass production of automobiles. Mass production lowered the cost of cars, making them affordable to ordinary people and turning them into the world’s most valuable internationally traded manufactured product of the twentieth century. (Library of Congress)
From the outset, Ford sought to expand internationally, exporting its first cars to England in the year of its incorporation. In 1905, production of the company’s first foreign-made cars began at a Canadian plant, and within eleven years assembly plants operated in Europe and Latin America. Plants in Asia soon followed. It was the 1908 Model T, however, the famous “tin lizzie,” that appealed to customers worldwide. Uniformly black, the Model T was cheap and dependable, its plain design spanning different cultures. Ford sold over 15 million between 1908 and 1927, and by the end of the period the Model T made up half of all automotive sales worldwide. Faced with strong competition from the General Motors Corporation and its efforts to provide different cars for specialized markets, however, Ford unveiled his Model A at the end of this period. To better manage the company’s growing business in Europe, the Ford Motor Company Ltd. was formed in 1928, a reorganization that helped keep the company at the forefront of the industry. Three years later, Ford opened the largest automotive plant in Europe, at Dagenham, England.
Strong management extended to labor relations and contributed to Ford’s success. As World War I began, Ford employed revolutionary corporate welfare techniques. Besides establishing regular medical inspections, sanitary conditions, and recreational facilities, the company allowed em ployees a shorter, eight-hour day. In 1914, it unveiled its “Five Dollar Day,” an early incentive plan.
In the years after World War II, Ford answered periods of declining profits with new models. In the 1950s, it was the Falcon; in the 1960s in Europe, the Cortina; in the 1980s, the Taurus; and, most recently, the Explorer. The company also sought to acquire smaller companies, for example, in 1987 the automaker Aston Martin and the rental company Hertz. Most notably, Ford acquired Volvo in 1999. In the 1950s, the company went public, at the time the largest initial public offering in the history. Not every endeavor proved successful, however. In the late 1960s, Ford rushed into production of the Pinto, aware that a design flaw caused the gas tank to explode easily. Rather than incur the cost to repair the tank, the company sought to hide the problem. Lawsuits, bad publicity, and the inevitable recall resulted. Battling to maintain its market share, Ford recently has undertaken a new restructuring plan, merging its European and American divisions under a unified management. To date, the company remains a force in the international economy, operating 110 factories worldwide and selling cars in 125 countries.
Brooks Flippen
See also: Automobiles; Corporations.
Banham, Russ. The Ford Century: Ford Motor Company and the Innovations that Shaped the World. New York: Artisan, 2002.
Studer-Noguez, Isabel. Ford and the Global Strategies of the Multinationals: The North American Auto Industry. New York: Routledge, 2001.