Ford facing a giant fjord
27 Apr 2018
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Just four years after Henry Ford set up the first automobile company in the US in 1903, the top carmaker began selling vehicles in India, with the launch of Model A.
Almost 20 years later, the American manufacturer was keen on producing vehicles – after importing all the components – in the country. But after sustaining hefty losses, Ford had to shut down its plant in the 1950s in the post-Independent era.
And it took another four decades for the US auto giant to venture into India again. It set up a joint venture with Mahindra & Mahindra and three years later took a controlling stake in what became Ford India.
Of course, in the frenzied rush to dominate the Indian automobile industry, Ford was nowhere in the frontline and did not rank among the top-five producers.
Ford Motor Company was founded by Henry Ford in 1903 along with nearly a dozen other associates. Later his family member, including wife and son acquired full control of the company.
For the next half century, the Fords and the Ford Foundation (set up in 1936) were the sole owners of the company. It was only in 1956 that it went for a public sale of the common stock.
One reason why Detroit emerged as the world’s automobile capital was that Henry Ford lived there and set up a workshop near his home in 1896 on an experimental basis.
Of course, Ford went on an aggressive expansion spree, setting up headquarters at Dearborn in Michigan, assembling units in other parts of the US and the first overseas production plant in Manchester in the UK (1911).
The pioneering industrialist launched the first moving assembly line for cars in 1913 and a year later introduced a $5 daily wage scheme for eight-hour shifts for his workers (as against the then prevailing rate of $2.34 for a nine-hour shift).
By the early 1920s, Ford was producing more than half of the automobiles on American roads and a few years later he had 20 overseas assembly plants across Canada, Europe, Asia, South Africa, Australia and Latin America.
Also in the 1920s, he had bought the Lincoln Motor Company, which later produced the celebrated luxury Lincolns and Continentals.
But the pioneering American auto giant’s journey in recent years has been topsy-turvy. About 30 years ago, it bought Jaguar, the British maker of luxury cars, and followed it up a few years later by acquiring Aston Martin.
Pushing ahead aggressively, it also bought car rental major Hertz in 1994, the auto division of Volvo five years later and Land Rover in 2000, besides a significant holding in Japan’s Mazda Motors.
But the turn of the millennium saw the company hurt by these purchases and Ford began selling its units. It sold Aston Martin in 2007 and a year later sold Jaguar and Land Rover to Tata Motors.
The economic crisis in Europe and the US saw the American government rush in with an emergency financial rescue plan for the Big three automakers – Ford, General Motors and Chrysler, in 2008.
But the past decade has seen the US auto industry decelerate sharply, finally forcing Ford to stop manufacturing most cars and focus only on commercial vehicles (See: Ford to focus on Mustang, trucks, SUVs to boost bottomline).
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