Continuing from the GM saga, if
there is any other name that epitomizes the American supremacy in the global
automobile industry it is the Ford Motor Company- a brainchild of Henry Ford.
An engineer by education but entrepreneur by passion, Ford established a
colossus of a company and revolutionized the automobile industry. His
excellence in management can be gauged from the fact that when the entire
American economy was going through a gloom and every corporation endorsed wage
cuts, retrenchment and long working hours, Ford took the opposite view. His
greatest contribution was his consistent endeavor for product differentiation
by means of product and process innovation. Having worked for numerous
companies as an automotive design engineer, he ventured into business with the
founding of the Detroit Automobile Company which failed on account of poor
product quality and an inefficient pricing strategy due to high production
costs.
After a spate of board room battles with his top management colleagues
he left the company which later was renamed as the Cadillac Automobile Company.
This company was later acquired by GM, but the brand Cadillac held on to strong
sales and market share and thus found a place of pride in the brand
architecture of GM as well. Ford designed the Ford Model T which went for commercial
production from 1908. The car was cost competitive, easy to drive and repair.
Ford built a wide network of after sales service outlets and introduced the
concept of franchising into the automobile distribution network. An innovative
low cost product backed by a strong distributor network meant that the Model T
became a household name. All the heavyweights of the print media in Detroit
were presented with gift editions of the car in order to ensure its low cost
advertising through newspapers. The engineering skill was combined with the
assembly line system of production , a 5$ per day wage and reduced working
hours meaning that the best mechanical engineering brains volunteered to work
with Ford Motor Company. A higher wage and less fatigue led to decline in
employee turnover ratio. All models were first produced in parts and then
assembled by machines and given a black paint which dried quickly. Ford’s
concept of sales leadership was a huge success with the Model T remaining the
highest selling car for a period of 45 years. The legacy of the Ford Motor
Company is still alive.
