HENRY FORD

BUILDING CARS AND MARKETS FOR THEM

In 20th century America's great Fortune had been built mostly on iron,
steel, railroad and oil.

Andrew Carnage was one of the renowned philanthropist businessmen

in 1888.He was indulged in various businesses lines for example Steam
Mills coal and iron. But a dozen years later in 1901 syndicate organization
by JP Morgan bought out Carnegie and consolidated his holdings in the
US steel company and Andrew Carnegie for worth Rs 240 million.

But unfortunately, the consolidated could not remain in the same way as
it was before, although the railroad created more but with less fortune.
Some of the business tycoon like Collis Huntington, Leland Stanford and
others who were profited from the completion of the transcontinental
railroad were to remain only the representatives for the group.

The reason for the downfall was that market was flooded with fraudulent
stock by some of the masters in that particular field and they are Jay
Gould and James Fisk due to this one of the businessman name Cornelius
losses 100million.

Then comes the oil industry which gives one of the most generous and
richest man of that time name John d Rockefeller.
Although there was new market for standard oil and its defined
petroleum but still Henry Ford was richer.
For mentioning about Henry ford for his work in one of the American
republic magazines called Tin Lizzie, there was a series of invention
taking place in different part of the world for example: -

- A model steam carriage by Jasoi machinery in China.

- Hundred years later prepared ship in Holland maintaining speed of 20

miles up to 28 passengers.

- In 18 century wound spring engine by compressed air was found out

- Steam power tricycle by Frenchman Nicolas was invented

- The four-stroke engine by Alphouse bean de rochas was invented

- Gasoline powered engine by Karl Benz

Henry Ford started experimenting with motors in 1896.

He created his first experimental prototype car (named quadricycle) and
after three year's established himself as premier designer of American
racing cars and formed FORD MOTOR COMPANY.
In 1905, he decided to manufacture all the parts like crankcases, axles
and other critical parts under one roof.
In 1908, Ford produced its first successful layman’s car (named Motor T)
and earned revenue of $9 million.
Ford was the first to begin with the concept of assembly for producing
its car by which they could keep the prices low.
To cope up with the mass manufacture which meant the assembly line,
it was necessary to devise plans of production. So, the principles of
assembly are-

1. Place the tools and the men in the sequence of the operation so
that each component part shall travel the least possible distance
while in the process of finishing.
2. Use work slides or some other form of carrier so that when a
workman completes his operation, he drops the part always in the
same place and that place must always be the most convenient
place to his hand.
3. Use sliding assembling lines by which the parts to be assembled are
delivered at convenient distances.
Application of all these principles lead to increased productivity and
reduction in production cost and time. Hence ford slashed the prices of
the car due to which sales quadrupled. By the end of 1914, almost half
of all the cars sold in America were Henry Ford’s Model T’s.

With the coming of mass production known as ‘Fordism’, the labor

turnover turned into a near plague and by 1913 ford had to hire nearly a
thousand people.

In 1914 Ford introduced his second great industrial innovation: a $5

wage for an 8-hour day which was about 15% more than the prevailing
rate in the auto industry.

The company now had men lined up for work and it had a work force
that was diligent and thrift.
Fords move to cut cost came to be known as 5-dollar day. According to
Ford it was the finest cost cutting movement they had ever made.

In order to spread the message that extra pay demands extra and greater
allegiance, Ford fired around 900 employees who were on Christmas
leave.

Ford started sociological department which conducted training

programs for employees which helped them develop a good moral
character. For ex – Philanthropy, No Grambling, No Addiction. They were
also guided as to how they can qualify themselves for various incentives

Ford was a globally known industrialist by 1920. He had so much wealth

and power no one had ever dreamt of. He set up businesses which were
in various sectors from rubber plantation to glass to rail road. He later
became a prophet as well.

Mass production was focused with the help of automation and

mechanization and this resulted in lower cost and greater profits.

Henry did charity work like forming of trade school and donating money to
build hospitals named after him.

In 1926, he announced a radical five-day work week for his employees.

Henry and Sloan came up with two different approaches. Henry believed in
improving and refining production methods (as in the case of Model T)
whereas Sloan believed in aggressive marketing, spending lots of money on
advertisement and availability of cars for every price range.
In 1921, Ford competed against Chevrolet by outselling them 13 to 1 margin with
Model T. But in 1920's, people were interested in buying replacement cars
rather than new cars the main reason being taste & preferences like weighing
comfort, style and mechanical innovation while Ford was offering bare bone
cars which seemed to be outdated. Using this critical advantage, Chevrolet
retooled and redesigned their models and quickly closed the gap by 1926
with margin ratio of 2:1(2 Ford's Model T for 1 Chevy).

Dec 2, 1927 Ford introduced Model A. Ford spent more in one week on
advertising than the company had spent collectively over the 19-year
lifespan of the Model T. Campaign worked for them and they recaptured the
lead from GM in total car sales. In 1932 Ford's increasingly violent
reactions to attempts at union organization began to run against the new
spirit. During March 1932, Ford Hunger March by union minded Ford workers,
Dearbon, Michigan, police fired at point-blank range on the
demonstrators, killing 3 and wounding 50, including a New York Times
photographer shot in the head.

Ford became the auto sales leader with the launch of Model A which was
highly conventional car in both its looks and machinery but in 1932 when
they launched the model 18 V-8 (single unit cast engine block) they
missed a larger message: “Even in the hard times, buyers were interested
in style, comfort and convenience “.

The Dearborn Independent magazine backed financially by ford and

edited by William Cameron always criticized Jews and blamed them with
the plotting of the destruction of Christian civilization because of which
this magazine was criticized in America after World War 1.
Leaders of Germany’s National Socialist party supported Ford and also
Hitler sent his own thanks along with the Third Reich’s Grand Cross of
the Supreme Order of the German Eagle to Henry Ford on his 75 th
birthday in July 1938.

After the death of Henry Ford the Ford Foundation had billions of dollars
and the foundation itself would save his heirs over $300 million in federal
inheritance taxes. The foundations generous support of variety of
liberals and social-welfare programs would help buff the image of the
automaker and rescue him from the consequences of many of the
actions.