Ford Motor Company

I

Introduction

Ford Motor Company, one of the world’s largest manufacturers of automobiles and the world’s largest producer of trucks. Under the leadership of its founder, Henry Ford, the company implemented the assembly-line method of mass production and made cars affordable for middle-class consumers. Ford is the second largest automaker in the United States based on overall sales, trailing only General Motors Corporation. Ford is based in Dearborn, Michigan.

Ford markets vehicles under the brands of Ford, Lincoln, Mazda, Mercury, and Volvo. Ford’s subsidiaries include the Hertz Corporation, the world’s largest car rental company, and Ford Credit, the world’s largest provider of automotive financing.

II

Early History

Henry Ford, an engineer with the Edison Illuminating Company in Detroit, experimented with engines in his spare time and completed his first automobile, the Quadricycle, in 1896. The vehicle consisted of a two-cylinder engine and chassis mounted on four bicycle wheels with no brakes. It had a top speed of 40 km/h (25 mph). By 1899 Ford had built two more models and gained recognition for his pioneering work. That year he founded the Detroit Automobile Company, but the company went bankrupt in 1901. Later that year Ford and other investors started the Henry Ford Company, but Ford was asked to resign after devoting too much time to building race cars. The company later became the Cadillac Automobile Company.

In 1903 the 40-year-old Ford and 11 investors raised $28,000 to form the Ford Motor Company. Among the original investors were brothers John and Horace Dodge, who would later found their own car company. In the first 15 months of operation, the Ford factory produced 1,700 Model A automobiles, which earned a reputation for reliability. Over the next five years Ford and his engineers produced other models, some purely experimental, designated with the letters B through S. The most successful of these models was the Model N, a small four-cylinder car priced at $500. The Model K, a $2,500 six-cylinder luxury model, was a financial failure.

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III

Success of Model T

The success of the Model N convinced Ford that the company’s future lay in producing inexpensive cars for a mass market. In 1908 Ford introduced the Model T, a sturdy four-cylinder car with an attractive design and a top speed of 72 km/h (45 mph). Priced at $850, the car created an immediate sensation, selling more than 10,000 in the first year. To keep up with demand, in 1913 Ford instituted an assembly-line system, in which each worker performed only one specialized task. This new technique allowed workers to assemble Model Ts in a fraction of the time required previously. By 1913 Ford had established assembly plants in Canada, Europe, Australia, South America, and Japan.

In 1914 Ford astonished the business world by more than doubling the minimum wage for his workers. He reasoned that if his employees earned more, the company would sell more cars to them and reduce employee turnover. By 1916 Ford had lowered the price of the Model T to about $350, making the cars affordable to the average worker. By the early 1920s more than half of all cars in the United States were Model Ts. In 1922 Ford purchased the Lincoln Motor Company, a maker of luxury cars.

IV

Introduction of Model A

Ford sales began to drop after competitors introduced larger and more luxurious cars. In 1927, with 15 million Model Ts sold, the company ceased production of the car and closed its plants for six months to retool for a new model, the Model A (named for the original). The Model A was a substantial improvement over the Model T, with features such as hydraulic shock absorbers, automatic windshield wipers, a gas gauge, and a speedometer. Between 1927 and 1931, Ford produced nearly 5 million Model A cars and trucks.

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