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BRIEF HISTORY
Ford was
launched in a converted factory in 1903 with $28,000 in cash 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 Model A in 1903 to the Model S
in 1908. That 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. 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, 69762 Model Ts were produced, with 170211 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
93min), and boosted annual output to 202667 units that year (in 1914
it was 308162, 1915 was 501462; by 1920, production would exceed one
million a year).
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Henry Ford
(ca. 1919)
These innovations were hard on employees, and turnover of workers
was very high, while increased productivity actually reduced labor
demand.[6] 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 under four months'
pay),[7] and instituting hiring practices that identified the best
workers, including disabled people considered unemployable by other
firms.[8] 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 disagreed with Ford's generous labor
practices when he began paying workers enough to buy the products
they made.
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