Ford Motor Company

• Date Founded: 1903

• Industry: Automotive
• Corporate Headquarters: Dearborn, Michigan
• Type: Public

The Ford Motor Company is a multinational automotive manufacturer headquartered in Dearborn, Michigan. Founded in 1903 by Henry Ford, the Ford Motor Company is the oldest of the big three American automakers and manufactures vehicles under two brand designations: Ford and Lincoln. Ford Motor Company is a publicly traded company, and although the descendants of Henry Ford own less than 2 percent of the outstanding shares, they have retained effective voting control and leadership positions throughout Ford’s existence. Henry Ford's great-grandson, William "Bill" Clay Ford Jr., joined the board in 1988. Since then, he has served as board member, chairman of the board, chief executive officer, and, since 2006, executive chairman. Another great-grandson, Edsel B. Ford II, was a member of the board of directors for thirty-three years until his retirement in 2021, when Henry Ford's great-great-grandchildren Alexandra Ford English and Henry Ford III were elected to the board. Another great-great-grandchild, Elena A. Ford, was a senior member within the company and became chief dealer engagement officer in 2023.

Henry Ford was the first automobile maker to introduce the moving assembly line to the production process. This method, so unique that it would become known as Fordism, dramatically increased the rate at which cars could be produced, which in turn lowered the cost of automobiles. The availability of an affordable automobile transformed the car at the turn of the twentieth century from a novel toy only the wealthy could afford into a method of transportation for the middle class. In 2023, the Ford Motor Company sold around 4.4 million vehicles worldwide.

History

Henry Ford’s father and grandparents left Ireland in 1847 to escape the great potato famine, settling in Michigan where his father, William, would farm. Always mechanical, Henry Ford, born in 1863, left home at sixteen to work—first as a machinist, then as an engineer, and finally as chief engineer for the Edison Illuminating Company. During this time, Ford began tinkering in his garage with gasoline-powered engines. In the decade between 1893 and 1903, Ford built his first gasoline-powered engine; completed his roadworthy, hand-built driving machine, the Quadricycle (1896); and found backers to start not one but two short-lived car companies. Neither of these two companies, the Detroit Automobile Company and the Henry Ford Company, survived longer than twenty-four months. Finally, in 1903, at the age of thirty-nine and with investor backing of $28,000, he launched the Ford Motor Company.

Although Ford did not invent the automobile, he was an innovator in automobile engine design and production. At a time when automobiles were made by hand and were difficult to drive and maintain, Henry Ford wanted to produce a simple, reliable, and affordable car that the average person could purchase. To achieve this goal, the Ford Motor Company pioneered new assembly practices that moved the vehicle along a production line of stationary workers. Each worker on the assembly line performed one of the eighty-four distinct steps it took to assemble a Model T in 1913. With this process, the start-to-finish assembly time per vehicle was reduced from over twelve hours to just ninety minutes. The price of the Model T dropped from over $800 in 1908 to $345 in 1914. That year, Ford Motors took a second radical step and raised employee wages to $5 a day, twice the average wage, thereby creating a new market for the Model T—namely, the very people who were building them.

In the 1930s, Ford added the Lincoln luxury line of vehicles and the mid-range Mercury brand. The Mercury, which was discontinued in 2011, appealed to a midrange buyer who wanted an automobile that fell between utilitarian Ford cars and the upscale Lincoln. During World War II, the company suspended civilian production, and the manufacturing floor was reengineered to build automobiles, planes, trucks, and aircraft engines for the war effort. When civilian production resumed, Ford introduced the F-Series trucks, one of its best-selling lines.

Among its many vehicle models released over the decades, Ford produced three vehicles that have become legendary in automotive lore. The Thunderbird, introduced in 1954 and in production until 2005, carved out the unique niche of the highly styled, image-driven, personal luxury vehicle. The Mustang, first sold in 1964, created the so-called pony-car market for compact, affordable performance-driven cars. Finally, the Edsel (in production from 1957–60), which cost Ford millions in development and marketing, failed to capture consumer attention, and the very word "Edsel" entered the popular lexicon as a synonym for failure.

The 1990 release of the Ford Explorer is credited with launching the domestic market for sport utility vehicles (SUVs) in the United States, and the introduction of the Lincoln Navigator in 1998 expanded the SUV line into the realm of luxury vehicles.

Ford Motor Company made several failed attempts to diversify its line of car brands through acquisitions. It purchased the Volvo car brand in 1999 but sold it in 2010 to a Chinese car manufacturer. Ford acquired Jaguar in 1990 and Land Rover in 2000, but it sold both of these brands to the Indian car company Tata Motors in 2008.

In January 2017, Ford announced that it was canceling prior plans to build a new manufacturing plant in Mexico and instead would invest $700 million into its home state of Michigan, creating nearly 700 new jobs in a new plant the company would build in Flat Rock, Michigan. The plant would be devoted to producing electric and self-driving cars, including a Mustang hybrid. This move, which surprised many, was announced by Ford as a "vote of confidence" for the newly sworn-in president of the United States, Donald Trump. During his presidential campaign, Trump often criticized Ford for producing cars in Mexico rather than in the United States and not supporting the US economy. In its press release announcing the new Michigan manufacturing plant, Ford Motor Company stated that the decision was purely a business one, and no deal with President Trump had been made.

The COVID-19 pandemic that began in 2020 adversely affected the supply and production chains of Ford, who later announced that sales had dropped by 15 percent in the first quarter of 2020 due to COVID-19-related issues. Sales continued to struggle into 2021 as the pandemic persisted, and in 2022 Ford leadership, in an effort to compete with other automotive manufacturers, announced that the company was restructuring into three separate divisions—Ford Pro, which consisted of the existing Ford production models; Ford Model E, dedicated to electric vehicles; and Ford Blue, focused on further developments to traditional combustion engines. Supply chain disruptions during the height of the COVID-19 pandemic, particularly regarding an ongoing shortage of computer chips, affected Ford and other automotive manufacturers until 2023. Ford has continued to research ways to innovate their current fleet of vehicles, analyzed ways to cut costs to consumers, and focused additional time and attention on alternatively powered vehicles as well.

Impact

The Ford Motor Company’s founder Henry Ford remains a vivid figure in American industrial history more than a century after he founded his automobile company. By the 1930s, there was one car for every five people in the United States, Americans accounted for over 80 percent of the car owners on the planet, and four million people owed their employment to the automobile industry. Beyond the manufacturing plant, the impact of the burgeoning auto industry was far-reaching. From the car dealerships, gas stations, and auto mechanics needed to support car owners to the massive highway construction projects necessitated by so many new drivers, the impact of Ford and its rivals Chrysler and General Motors is difficult to overstate.

The Ford Foundation, established in 1936 by Henry Ford’s son Edsel Ford with a gift of $25,000, was charged with providing grants for "scientific, educational and charitable purposes, all for the public welfare." By 2024, the Ford Foundation had an endowment of over $16 billion and made worldwide grants seeking to "advance human welfare."

The Ford Foundation was, by the time of Henry Ford’s death in 1947 (his son Edsel died in 1943), endowed with nearly 90 percent of Ford Motor Company's nonvoting stock. Despite Henry Ford’s lifelong insistence that Ford Motors remain a privately held company, it was the Ford Foundation’s decision to divest itself and diversify its portfolio that led to the 1956 initial public offering in which the foundation sold over ten million shares of stock. By 1974, it had sold all of its holdings in Ford Motors. However, through ownership of a special class of stock, descendants of Henry Ford retained effective voting control of the company.

The Ford Motor Company is active in charitable giving through its Ford Motor Company Fund, providing grants to civic organizations in the areas of education, community life, and driver safety. Since its inception in 1949, the fund has gifted $1.5 billion.

Ford adopted its first logo in 1907, a trademark consisting of the formally scripted word Ford, but the company introduced a logo much closer to the contemporary symbol in 1927 with the release of the Model A. The company logo consists of the word "Ford" inscribed in cursive script and set within a blue oval.

Bibliography

“A Legacy of Social Justice.” Ford Foundation, 2018: www.fordfoundation.org/about-us/a-legacy-of-social-justice/. Accessed 5 Nov. 2024.

Banum, Russ. The Ford Century. Artisan, 2002.

Carlier, Mathilde. “Wholesale Vehicle Sales of the Ford Motor Company 2009–2023.” Statista, 29 Feb. 2024: www.statista.com/statistics/297315/ford-vehicle-sales/. Accessed 5 Nov. 2024.

Collier, Peter, and David Horowitz. The Fords: An American Epic. Simon, 1987.

“Company Timeline.” Ford Motor Company, 2024, ccorporate.ford.com/about/history/company-timeline.html. Accessed 5 Nov. 2024.

Elliott, Stuart. “Selling Ford around the World, from Detroit.” The New York Times, 11 Nov. 2010: www.nytimes.com/2010/11/12/business/media/12adco.html. Accessed 5 Nov. 2024.

Foote, Brett. “Exec Says More Affordable Ford Vehicles Under Consideration.” Ford Authority, 28 Apr. 2023: fordauthority.com/2023/04/exec-says-more-affordable-ford-vehicles-under-consideration. Accessed 5 Nov. 2024.

Hayes, Walter. Henry: A Life of Henry Ford II. Grove Weidenfield, 1990.

“Henry Ford.” A Science Odyssey: People and Discoveries, WGBH, 1998, www.pbs.org/wgbh/aso/databank/entries/btford.html. Accessed 5 Nov. 2024.

Howard, Phoebe Wall. “Ford Reveals Radical Plan to Restructure Automaker into Three Business Units.” Detroit Free Press, 2 Mar. 2022: www.freep.com/story/money/cars/ford/2022/03/02/ford-ceo-jim-farley-unveils-plan-ev-model-e/6981544001/. Accessed 5 Nov. 2024.

Rogers, Christina. “GM, Ford Flourish Out of Limelight.” The Wall Street Journal, Dow Jones, 29 July 2015, www.wsj.com/articles/gm-ford-flourish-out-of-the-limelight-1438126715. Accessed 5 Nov. 2024.

Sherman, Natalie. “Cars out, Snacks in as Virus Impacts US Company Profits.” BBC, 28 Apr. 2020, www.bbc.com/news/business-52465337. Accessed 5 Nov. 2024.