History of Ford Motor Company

Topics: Ford Motor Company, Weighted average cost of capital, General Motors Pages: 14 (4903 words) Published: July 16, 2008
Ford Motor Company (NYSE: F)

Ford Motor Company – A History
Vehicle History
Ford Motor Company was founded by Henry Ford in Detroit, Michigan. Ford was a skilled craftsman, who used his skills to create an experimental car in 1896. He created a two cylinder vehicle that was capable of going up to 20 mph. Ford left his primary job in 1899 to create Detroit Automobile Company and produced the Model A in 1903. The car had an under the floor engine and sold for $850. This car sold 1,708 units in its first season.

As Ford refined the product, he became increasingly focused with vehicle speed. In 1904, he released an experimental car, called the 999, which had a max speed of 91.4 mph. Later that year, the company also introduced the Model B and Model C for $2,000. Ford improved upon the prototype to create the Model K in 1905 that sold for $2,500. The 1906 model was the Model N, which sold for $500. The Model N undercut Oldsmobile’s prices and paved the way for Fords most historical innovation in 1909: the Model T. The Model T, also known as the Tin Lizzie, was a very popular model for several reasons, including the rock-bottom price of $850, low fuel consumption, large engine size, and a top speed of 40 mph. 15 million Model T's were produced over the next 18 years and was considered the hallmark American vehicle. Ford rapidly increased production over the next several years, despite a major recall of the first million cars in 1922. During their continued production expansion, Ford began selling overseas in Great Britain, France, and Germany. The company realized continual innovation was a necessity to avoid product stagnation, notably with their only car color being black. As a result, in 1927, Ford stopped production of the Model T and worked on creating more innovative products that would move both the company and the industry forward. The Model A became the next popular model to roll off the Ford production line. As a drawback of changing models, it took three months to alter the production line from the Model T. The price of the car was $450 and 4.5 million were sold over the next four years. The model also featured a station wagon format, which was a new vehicle option on the market. Then in 1932, Ford created a car with a 3.6 liter V8 engine that cost $480 and created a huge demand for the Ford vehicles. Many other lines were introduced over the next couple years with the Model A and Model B being the most popular. These 2 models featured different specifications, including greater horsepower and larger engines. Other innovations during this time era included, hydraulic brakes, column changes, and suspensions. These innovations, along with a strong brand name, helped to increase the profits of the company. After World War II, production had slowed considerably until the introduction of the 1949 line. Power lines and automatic transmissions were introduced on the market. The next impact car on the Ford line was the sporty Thunderbird. It had a 5.1 liter engine that yielded a max speed of 113 mph. It also introduced the convertible version in 1958 that offered five seats and a strengthened structure. In the late 1950’s many other models were restyled, including the compact car called the Falcon. During the 1960's, competition increased and Ford had to push its innovative efforts in order to remain one of the top manufacturers. A combination of design talent and superior management created the Ford Mustang in 1964. The semi-compact Mustang GT came with four seats and at a price of $2480. The automobile had a 4.7 liter V8 engine with speeds exceeding 110 mph. The car was a huge financial success by selling over 500,000 units in the first year and a half on the market. Nearly one out of every two sports cars sold in the United States is a Mustang. The 2008 Mustang intends to hold on to that sales leadership with new available features that will add personal appeal. The Mustang will...
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