Ford as a businessman
...it Automobile Company. This venture only lasted for a year, citing failure to make profit from the beginning. He followed up with another failure, again as chief engineer, with the one year venture of the Ford Automobile Company. After two failures Ford was not deterred from his work and in 1903 it paid off. Ford partnered with Alex Y. Malcomson, a prosperous local coal dealer, and the two men created the Ford Motor Company. In June of 1903 John S. Gray, John W. Anderson, John Dodge, Ford and Malcomson became the directors of the corporation. Gray was president, James Couzens was secretary and business manager, Malcomson was treasurer, and Ford was vice-president and general manager. Once the doors were opened for business the company was worth $100,000, but only $28,000 of that was in actual cash. With the establishment of his motor company Ford knew that there needed to be other changes made. He knew that gas stations would be needed and that better roads needed to be created. He actively pushed for these two things and gas stations began to sprout up everywhere and the interstate-highway system in America started to take shape. The first product sold was a car known as the “999”. In 1904 this car broke the unofficial world’s speed record at 90 miles per hour. Even with this cars high speeds it was still reliable and pretty inexpensive. It was priced at $850. Now Ford Motor Company was one of the leaders in the American auto industry along with Olds Motor Works. Luck went Ford’s way in 1906 when two of his stockholders, Couzens and Malcomson both were on the verge of bankruptcy and sold their stocks to Ford in order to save themselves. With this Ford now was the company’s dominant share holder with a total of 58 ½ per cent. John S. Gray’s death in the same year resulted in Ford becoming president of the company, and Couzens taking his place as vice-president. Ford controlled the shop and Couzens the front office, creating an excellently run company with a product in demand Industrialization and modernization of the automotive industry was taking place in America in the early 1900’s. Production was a problem for Ford Motor Company’s after creating the Model K car and eventually the Model T. The goal was to be able to produce these cars inexpensively so that they could be sold at an inexpensive price. Ford needed to be able to put out a lot of cars in a short time, and still have the ability to repair the cars with parts straight from the factory. This challenge resulted in the construction of the Ford Motor Company plant in Highland Park, Michigan. The plant was designed in a way so that no time would be wasted moving the car from place to place during construction. This method of construction became known as the line production system, and more commonly known today as the assembly line. In every detail the factory was laid out on a large-production scale…having in mind only the greatest efficiency, and was laid out with the idea of taking advantage of every possible economy and of producing the quantity desired at the lowest possible price. At this time no other company was able to tool in the same manner of manufacture as cheaply. The plant was recognized as the greatest advance in manufacturing methods in the country at that time, and was the best automobile producing layout in the United States. Ford now had an inexpensive, easily maintained car in the Model T, but also had an edge in production over his competitors. Management of the Ford Motor Company was on its way to making their company a giant enterprise not only in the United States but in the world. In 1913 the Model T was being produced start to finish in twelve hours and twenty-eight minutes, while in 1914 it only took ninety-three minutes to complete this process. The Industrial Revolution taking place in America was now put into overdrive with the creation of this fast and efficient way of producing a certain good. Three principles for production of the Model T existed; the car had to be strong and light, economical in manufacturing it and it had to have a good appearance. These three principles are in order of importance. The production of Ford’s product was a byproduct of the second industrial revolution, it was what Ford and his motor company did business-wise that made Ford the lionized man of his time. Between 1910 and 1920 Ford was building he massive Rouge Plant that included all the elements needed for automobile production: a steel mill, glass factory, and automobile assembly line. Great Lakes steamers and the railroad brought iron ore and coal to the Great Lakes and were used to produce both iron and steel. Rolling mills, forges, and assembly shops transformed the steel into springs, axles, and car bodies. Foundries converted iron into engine blocks and cylinder heads that were assembled with other components into engines. Ford now had a plant specifically for the manufacturing from start to finish a car. He had vertically integrated his company and did not need to depend on others for materials to produce his cars. In 1914 Ford shocked the employment world by creating a higher flat wage of five dollars a day. The previous wage was a little over two dollars. This idea was known as profit-sharing. This created uproar not only in America but throughout the world. In everyone’s opinion Ford had made a huge mistake and would not only fail himself, but he would take Detroit with him. Ford on the other hand showed pure genius in his intentions. With setting his wages that high for everyone working for him even down to the floor sweepers he thought, “If the floor sweeper’s heart is in his job he can save us five dollars a day by picking up small tools instead of sweeping them out.” In this way Ford was going to keep his employees happy by paying them well enough that they would complete their jobs to the best of their ability. In the end this idea would save the company money. Ford also felt that by increasing the wages of his workers he would make more money. He believed that by paying his employees more, they would in turn become his best customers. Years after his decision to increase wages Ford later wrote: …The real progress of our company dates from 1914, when we raised the minimum wage from somewhat more than two dollars to a flat dive dollars a day, for then we increased the buying power of our own people, and the increased the buying power of other people, and so on and on. It is this thought of enlarging buying power by paying high wages and selling at low prices that is behind the prosperity of this country. Something that received mass criticism and was not looked upon as a smart idea in his time, became a staple in making money for the Ford Motor Company. Ford’s genius had grown from not only the engineering field, but also in the field of business. Ford was strongly against waste in every sense. His idea of waste can be summed up in his idea of going to jail for stealing a loaf of bread. A man used to be hung for this offense but now they went to jail, where the benefit of an amount of work is withdrawn that might have made enough for a thousand loafs. The men would then be fed many times that of which he stole. To Ford this is a flagrant waste. Ford believes that you can turn this criminal from his non producing ways before jail into a producer while in jail and that is the way to rehabilitate these men. Ford then goes about and incorporates these ideas of saving both material and labor. A study was done on how much steel was wasted a year before the techniques used to create Ford’s product. The investigation showed that about 80,000,000 pounds of steel per year we...