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28 Mar 2023

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History of the Ford Motor Company Business

History of the Ford Motor Company Business 

Illustration of a Ford car.

Ford innovated by developing mass car production in the early 20th century. It survives in the 21st century with efficiency.

Long before Elon Musk, the automotive industry had Henry Ford. A person who is never satisfied trying new things. Throughout his career, in addition to establishing one of the largest car manufacturers in the world, he has also been involved in shipbuilding, house construction, agriculture and plantations, radio broadcasts, to airlines.The Britannica encyclopedia writes, Henry Ford first built his first experimental car in a backyard workshop located in Detroit in the United States in 1896. Then on June 16, 1903, right today 117 years ago, the Ford Motor Company was established.

The Model T was present in 1908, becoming the most successful Ford product at the time. This product was originally deliberately made by Henry Ford as a practical and affordable transportation for the community. The Model T is quickly accepted because it is affordable, versatile, has good durability, and easy maintenance.

Because of the enormous demand, Ford developed a mass production method to meet its needs. So in 1911, he founded the first assembly plant in Missouri and opened the first overseas factory in Manchester, England.

Ford’s move made the Model T the first car in the world to pass the assembly line . At the same time introducing an efficient production system to manufacturers around the world. To increase productivity, Ford also implemented a factory worker wage system of US $ 5 per day for 8 hours of work.

In 1914, about 500 thousand more Model T sold throughout the world. In order to catch up with demand, Ford also added up to more than 20 production and assembly facilities spread throughout the world. This car manufacturer also succeeded in acquiring Lincoln Motor Company in 1922, which later became the Lincoln and Continental luxury car brands owned by Ford.

Since then, Ford’s business has progressed and developed. In addition to the legendary Model T, Ford also produces a number of trucks and sedans such as the Mustang, which is the next mainstay product. Ford even had time to acquire and have a majority stake in a number of global car manufacturers such as Jaguar, Aston Martin, Volvo, Land Rover, to Mazda.

Out of Japan and Indonesia

Unfortunately the world economic recession made Ford’s business go down. Great-grandson Henry Ford, Bill Ford, who served as Executive Chairman, revitalized the company in 2005.

He began to change the size of his famous large product, stop selling inefficient and less profitable models, close 14 factories worldwide, and cut nearly 30 thousand workers. Ford also began to focus on developing compact SUVs and began experimenting with hybrid technology.

With unfavorable market conditions, Ford began to struggle to increase sales and maintain profits. In early 2016, this Detroit-based manufacturer also announced to withdraw from the Japanese and Indonesian markets.

Reported by the BBC , Ford is said to be unable to face competition with local brands. In 2015, for example, Ford only managed to sell around 5,000 units in the Land of the Rising Sun.

“Japan is the country with the most closed economy, most independently developed, with the number of imported brands less than 6 percent of Japan’s total new annual car market,” said Ford Motor Company spokesman Neal McCarthy.

While in Indonesia, Ford was only able to control about 1 percent of the country’s market share with sales of 6,100 units in 2015. All distributors in Indonesia and imports of Ford cars began to be stopped the following year. Nevertheless, service and warranty services will still be served by their dealers .

“We have announced a difficult business decision to withdraw from all our operations in Indonesia in the second half of 2016. This includes closing Ford dealerships and stopping official sales and imports of all Ford vehicles,” said Managing Director of PT Ford Motor Indonesia, Bagus Susanto, as quoted from Seconds .

In fact, Ford has been known to operate in Indonesia since 2002. A network of dealers and brand image in Indonesia has also been built with difficulty. Many people regretted the departure of Ford, including loyal customers.

Ford Today

After tightening the belt a few years ago, Ford reduced around 800 workers until August 2019. This plan was said to be included in the final-stage revitalization strategy.

Jim Hacket, CEO of Ford Motor Company, told the New York Times that the cutting of employees could save company finances by up to 600 million US dollars or around Rp8.5 trillion. For the record, in 2018 Ford has eliminated about 1,500 workers in the United States.

Hacket said, the effort to reduce employees was done to deal with slowing sales, especially in Europe, South America and Asia.

Jessica Caldwell, an economic analyst at Edmunds, said Ford had moved aggressively in cutting the number of employees. However, he could not be sure whether the company had succeeded in changing the company’s operations and culture.

“I think there is a lot of basic work, but they need to devise a strategy to become a new and more efficient company. As for the big changes, we haven’t really seen it,” he said, still from the New York Times .

Despite the revitalization in several parts, Ford’s annual financial report shows that the company has not changed for the better. The majority of sales figures in some of the largest markets actually tend to decline over time.

Ford wholesales sales in the United States in 2016-2019, for example, respectively recorded 2.588 million units, 2.566 million units, and 2.540 million units. While in North America, sales figures fell from 3.019 million units to a level of 2.967 million units, and to 2.920 million units.

The same situation also occurs in the China and Asia Pacific markets. However, Ford experienced a few positive achievements in the EU21 market which included the United Kingdom, Germany, France, Italy, Spain, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Netherlands, Norway, Poland, Portugal, Romania , Russia, Sweden and Switzerland.

In that region, the distribution of Ford cars from factories to dealers in 2016 was recorded at 1.387 million units. The number increased to 1.429 million units in 2017, and to 1.439 million units in 2018. Reported by Auto News , Ford executives said, their business in Europe is a healthy business.

Ford is even said to be the leader of the commercial vehicle market in Europe and achieved record sales in 2018 thanks to the import of the new generation of Mustang cars. Unlike the situation in his home country, Ford believes their market in Europe can still be saved with traditional cars such as sedans and hatchbacks .

Whereas in the United States, the revitalization of the company made Ford stop selling sedans and only left SUVs, trucks and some electric cars. Even so, this strategy is predicted to be still in line with the company’s future projects.

As is known, Ford has plans for an alliance with Volkswagen in the development of pickup trucks, commercial vans, and autonomous vehicles. This change in marketing strategy is needed so that their plans run well.

Now Ford is still the same as it first appeared: Always dissatisfied and trying new things. This continues to be done by the company to find a number of opportunities, such as when Ford succeeded in producing cars and presenting the Model T, a product that changed the fate of Henry Ford.


This article first appeared on June 16, 2019 under the title “116 years of ups and downs in the Ford Motor Company Business”. We re-edited and republished the Mosaic section.

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