Early developments of Ford
Ford was launched in a converted factory in 1902 with $31,000 in cash (approximately US $687 thousand, adjusted for inflation) from twelve investors, most notably John and Horace Dodge, who would later found the Dodge Brothers Motor Vehicle Company. Henry Ford was 40 years old when he founded the Ford Motor Company, which would go on to become one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. The largest family–controlled company in the world, the Ford Motor Company has been in continuous family control for over 100 years.
During its early years, the company produced a range of vehicles designated, chronologically, from the Ford Model A (1903) to the Model K and Model S (Ford's last right–hand steering model) of 1907. The K, Ford's first six–cylinder model, was knows as "the gentleman's roadster" and "the silent cyclone", and sold for US$2800 (approximately US$63.8 thousand, adjusted for inflation); by contrast, around that time, the Enger 40 was priced at US$2000, the Colt Runabout US$1500, the high–volume Oldsmobile Runabout US$650, Western's Gale Model A US$500, and the Success hit the amazingly low US$250 (approximately US$5.7 thousand, adjusted for inflation).
The next year, Henry Ford introduced the Model T. Earlier models were produced at a rate of only a few a day at a rented factory on Mack Avenue in Detroit, Michigan, with groups of two or three men working on each car from components made to order by other companies (what would come to be called an "assembled car"). The first Model Ts were built at the Piquette Road Manufacturing Plant, the first company–owned factory. In its first full year of production, 1909, about 18,000 Model Ts were built. As demand for the car grew, the company moved production to the much larger Highland Park Plant, and in 1911, the first year of operation there, 69,762 Model Ts were produced, with 170,211 in 1912. By 1913, the company had developed all of the basic techniques of the assembly line and mass production. Ford introduced the world's first moving assembly line that year, which reduced chassis assembly time from 12½ hours in October to 2 hours 40 minutes (and ultimately 1 hour, 33 minutes), and boosted annual output to 202,667 units that year After a Ford ad promised profit–sharing if sales hit 300,000 between August 1914 and August 1915, sales in 1914 hit 308,162, and 501,462 in 1915; by 1920, production would exceed one million a year.
These innovations were hard on employees, and turnover of workers was very high, while increased productivity actually reduced labor demand. Turnover meant delays and extra costs of training, and use of slow workers. In January 1914, Ford solved the employee turnover problem by doubling pay to $5 a day, cutting shifts from nine hours to an eight hour day for a 5 day work week (which also increased sales; a line worker could buy a T with less than four months' pay), and instituting hiring practices that identified the best workers, including disabled people considered unemployable by other firms. Employee turnover plunged, productivity soared, and with it, the cost per vehicle plummeted. Ford cut prices again and again and invented the system of franchised dealers who were loyal to his brand name. Wall Street had criticized Ford's generous labor practices when he began paying workers enough to buy the products they made.
Ford assembly line (1913)
While Ford attained international status in 1904 with the founding of Ford of Canada, it was in 1911 the company began to rapidly expand overseas, with the opening of assembly plants in England and France, followed by Denmark (1923), Germany (1925), Austria (1925), and Argentina (1925), and also in South Africa (1924) and Australia (1925) as subsidiaries of Ford of Canada due to preferential tariff rules for Commonwealth countries. By the end of 1919, Ford was producing 50 percent of all cars in the United States, and 40% of all British ones; by 1920, half of all cars in the U.S. were Model Ts. (The low price also killed the cyclecar in the U.S.) The assembly line transformed the industry; soon, companies without it risked bankruptcy. Of 200 U.S. car makers in 1920, only 17 were left in 1940.
Ford 1916 Model T Field Ambulance. This canvas on wood frame model was used extensively by the British & French as well as the American Expeditionary Force in World War I. Its top speed was 45 mph (72 km/h), produced by a 4 cylinder water cooled engine
It also transformed technology. Henry Ford is reported to have said, "Any customer can have a car painted any color that he wants so long as it is black." Before the assembly line, Ts had been available in a variety of colors, including red, blue, and green, but not black. Now, paint had become a production bottleneck; only Japan Black dried quickly enough, and not until Duco lacquer appeared in 1926 would other colors reappear on the T.
In 1915, Henry Ford went on a peace mission to Europe aboard a ship, joining other pacifists in efforts to stop World War I. This led to an increase in his personal popularity. Ford would subsequently go on to support the war effort with the Model T becoming the underpinnings for Allied military vehicles, like the Ford 3–Ton M1918 tank, and the 1916 ambulance.
Source: Wikipedia
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