A Brief History of the Ford Motor Company

Ford Motor Company is an American auto manufacturer and the fourth-largest automaker in the world, after Volkswagen, GM, and Toyota. Ford is based in Dearborn, Michigan near Detroit. Henry Ford founded the company, which was incorporated in 1903. Ford is the third-ranked automaker in the U.S., after GM and Toyota. Ford has domestic brands that include Mercury and Lincoln, as well as international brands including Volvo of Sweden. Ford has a 33% controlling interest in Mazda, and a small controlling interest in British automaker Aston Martin. In 2007, Ford had the honor of receiving more quality awards from J.D. Power & Associates than any other auto manufacturer. In what follows, we’ll discuss Ford’s history in further detail.

The Early Years

Ford began making cars in a converted factory in 1903 with just $28,000 from a dozen investors. Two of these investors were John and Horace Dodge, who later went on to found their own car company. In its early years, the factory only produced a few cars each day. Henry Ford was 40 years old when he founded the company and revolutionized the business world by paying his workers $5 per day, more than double the going wage in the industry. His strategy paid off; it attracted the best and the brightest mechanics to his factory, reduced turnover, and success ensued.

The Model T

Ford’s first major success was the Model T, introduced in 1908. The Model T was the first car to place the steering wheel on the left, which later became the standard for American vehicles. Henry Ford created a network of local dealerships that made the Model T almost omnipresent in most American cities. Ten years later, in 1918, 50% of all cars in American were Model Ts. Sales of the Model T eventually began to decline throughout the 1920s, as competition increased and Henry Ford refused to update the vehicle’s features.

The Present

Ford remains one of the largest family-owned companies in the world. In fact, it has enjoyed uninterrupted family control for over a century. Ford was also one of the few companies that survived the Great Depression. In March of 2008, Ford sold its subsidiaries Jaguar and Land Rover to Tata Motors of India. The company endured a bout of bad press in 2007 when it slipped from the #2 automaker in the U.S. to #3 for the first time in 56 years. The popularity of Toyota of Japan has made Ford less competitive in recent years. In light of Ford’s recent struggles, the corporate leaders introduced a plan in 2005 called “The Way Forward” that seeks to return the company to profitability by 2009. The plan includes dropping unprofitable models, consolidating production lines, closing down fourteen factories, and cutting 30,000 jobs.