The Ford Motor Company
June 5th 2008 02:30
In 1903, Henry Ford created a family business that would go on to last more than 100 years. The story of the Ford Motor Company is one of the ups and downs that would be associated with any family business.
Start Up
Henry Ford gathered about $28,000 to start his company, which in today’s dollars would be about $600,000. Some of his primary investors included the Dodge brothers, Horace and John Dodge.
The Dodge Brothers Company was already an established automobile parts manufacturer and supplied Henry Ford with engines and chassis for his production line. This is a great example of two family owned businesses coming together in a relationship that benefited both families.
Henry Ford's factory did not fabricate each part themselves. Instead they purchased parts already fabricated from other companies and assembled these components into the final product.
Key Note: The Ford Motor Company’s core competency was not fabrication or manufacturing. Instead, its core competency was being an efficient assembling company. This was a very new idea at the time, and a lot of what we see today from auto manufacturers we owe to Henry Ford.
Expansion
Henry Ford was quick to expand his market share, and in 1904 he started Ford Canada. This would be eclipsed later by his real international thrust. In 1911, he had his assembly line plants up and running in England and France. By 1925, he had operations in Austria, Australia, Denmark, and Germany.
Key Note: The Ford Motor Company’s diversification in production locations helped them survive WWI, WWII, and The Great Depression.
Today Ford is an American based multinational enterprise, and is the third largest automobile manufacture in the world with revenue of $173.9 Billion in US dollars in 2007.
The Family Heritage
Edsel Ford was Henry ford's only child, and became the secretary of Ford in 1915. In 1919, Edsel Ford became president of The Ford Motor Company. This was more of a "last stage of a mentorship style" succession plan between Henry and Edsel. Henry was still actively involved with the management of the company, for the good or for the bad.
In 1922, Edsel purchased the Lincoln Motor Company and added it to Ford’s growing market share. Edsel would have four children before he died of cancer in 1943. Two of those four children are still involved with the family business, William Clay Ford and Henry Ford II.
Edsel and Henry did not always agree on larger decisions. Four-wheel mechanical brakes was one of these issues. The business was suffering in the market by not having these types of improvements, and losing market share to other automobile companies. This problem was caused by Henry not listening to customer needs. Edsel, on the other hand, made sure that the company moved forward, even if it meant disagreement with his father.
Edsel also formed the Mercury division of Ford, and in so doing helped bolster their market share in Europe. This helped combat their slumping sales in the European market.
After Edsel’s death, Henry would once again take control of the company. He would later turn things over to his grandson, Henry Ford II. After WWII, Henry Ford II was thrown into the heat of things. This even included the threat of a government take over!
Ford’s European factories had sustained heavy damages in WWII, and this was Henry Ford II's responsibility to fix. Although Henry Ford II did not have much mentorship or grooming for the position, he did have Navel military experience. He hired ten people from an Army Air Force Statistical Team, and two of these ten would later be presidents of the company.
Today, Henry Ford’s Great-Grandson, William Clay Ford, Jr. continues the family legacy.
Lessons to Take With You
There are numerous things to have learned from Henry Ford and the Ford Motor Company, and here are some that you can put to use right now.
• Develop a succession plan and put it into effect. A mentorship is a good example of an effective succession plan and is easy to implement when your children work in the company.
• Hire from outside of the family when you need it. Do not limit your abilities to just your family’s internal capabilities.
• Make your core competency, and overall business, transferable to the next generation. This includes planning for a transferable legal structure.
• Listening to customer needs should determine the course of action. Sometimes this will cause conflict with what other family members feel is the correct direction.
• Create a strong family in conjunction to a strong business. Quality people make all the difference.
If Henry Ford was here today, I believe that he would have some inspirational words for the Family Business owner, “If you think you can do a thing, or think you can’t do a thing, you are right”.
Henry Ford
Start Up
Henry Ford gathered about $28,000 to start his company, which in today’s dollars would be about $600,000. Some of his primary investors included the Dodge brothers, Horace and John Dodge.
The Dodge Brothers Company was already an established automobile parts manufacturer and supplied Henry Ford with engines and chassis for his production line. This is a great example of two family owned businesses coming together in a relationship that benefited both families.
Henry Ford's factory did not fabricate each part themselves. Instead they purchased parts already fabricated from other companies and assembled these components into the final product.
Key Note: The Ford Motor Company’s core competency was not fabrication or manufacturing. Instead, its core competency was being an efficient assembling company. This was a very new idea at the time, and a lot of what we see today from auto manufacturers we owe to Henry Ford.
Expansion
Henry Ford was quick to expand his market share, and in 1904 he started Ford Canada. This would be eclipsed later by his real international thrust. In 1911, he had his assembly line plants up and running in England and France. By 1925, he had operations in Austria, Australia, Denmark, and Germany.
Key Note: The Ford Motor Company’s diversification in production locations helped them survive WWI, WWII, and The Great Depression.
Today Ford is an American based multinational enterprise, and is the third largest automobile manufacture in the world with revenue of $173.9 Billion in US dollars in 2007.
The Family Heritage
Edsel Ford was Henry ford's only child, and became the secretary of Ford in 1915. In 1919, Edsel Ford became president of The Ford Motor Company. This was more of a "last stage of a mentorship style" succession plan between Henry and Edsel. Henry was still actively involved with the management of the company, for the good or for the bad.
In 1922, Edsel purchased the Lincoln Motor Company and added it to Ford’s growing market share. Edsel would have four children before he died of cancer in 1943. Two of those four children are still involved with the family business, William Clay Ford and Henry Ford II.
Edsel and Henry did not always agree on larger decisions. Four-wheel mechanical brakes was one of these issues. The business was suffering in the market by not having these types of improvements, and losing market share to other automobile companies. This problem was caused by Henry not listening to customer needs. Edsel, on the other hand, made sure that the company moved forward, even if it meant disagreement with his father.
Edsel also formed the Mercury division of Ford, and in so doing helped bolster their market share in Europe. This helped combat their slumping sales in the European market.
After Edsel’s death, Henry would once again take control of the company. He would later turn things over to his grandson, Henry Ford II. After WWII, Henry Ford II was thrown into the heat of things. This even included the threat of a government take over!
Ford’s European factories had sustained heavy damages in WWII, and this was Henry Ford II's responsibility to fix. Although Henry Ford II did not have much mentorship or grooming for the position, he did have Navel military experience. He hired ten people from an Army Air Force Statistical Team, and two of these ten would later be presidents of the company.
Today, Henry Ford’s Great-Grandson, William Clay Ford, Jr. continues the family legacy.
Lessons to Take With You
There are numerous things to have learned from Henry Ford and the Ford Motor Company, and here are some that you can put to use right now.
• Develop a succession plan and put it into effect. A mentorship is a good example of an effective succession plan and is easy to implement when your children work in the company.
• Hire from outside of the family when you need it. Do not limit your abilities to just your family’s internal capabilities.
• Make your core competency, and overall business, transferable to the next generation. This includes planning for a transferable legal structure.
• Listening to customer needs should determine the course of action. Sometimes this will cause conflict with what other family members feel is the correct direction.
• Create a strong family in conjunction to a strong business. Quality people make all the difference.
If Henry Ford was here today, I believe that he would have some inspirational words for the Family Business owner, “If you think you can do a thing, or think you can’t do a thing, you are right”.
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