The Ford Motor Company (colloquially referred to as Ford) is an American multinational automaker headquartered in Dearborn, Michigan, a suburb of Detroit. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand and most luxury cars under the Lincoln brand. Ford also owns Brazilian SUV manufacturer, Troller, and Australian performance car manufacturer FPV. In the past it has also produced tractors and automotive components. Ford owns a 2.1% stake in Mazda of Japan, an 8% stake in Aston Martin of the United Kingdom, and a 49% stake in Jiangling of China. It also has a number of joint-ventures, two in China (Changan Ford Mazda and Ford Lio Ho), one in Thailand (AutoAlliance Thailand), one in Turkey (Ford Otosan), and one in Russia (Ford Sollers). It is listed on the New York Stock Exchange and is controlled by the Ford family, although they have minority ownership. It is described by Forbes as "the most important industrial company in the history of the United States."
Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines; by 1914 these methods were known around the world as Fordism. Ford's former UK subsidiaries Jaguar and Land Rover, acquired in 1989 and 2000 respectively, were sold to Tata Motors in March 2008. Ford owned the Swedish automaker Volvo from 1999 to 2010. In 2011, Ford discontinued the Mercury brand, under which it had marketed entry-level luxury cars in the United States, Canada, Mexico, and the Middle East since 1938.
Ford is the second-largest U.S.-based automaker (preceded by General Motors) and the fifth-largest in the world based on 2010 vehicle sales. At the end of 2010, Ford was the fifth largest automaker in Europe. Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide.The company went public in 1956 but the Ford family, through special Class B shares, still retain 40 percent voting rights
Henry Ford's first attempt at a car company under his own name was the Henry Ford Company on November 3, 1901, which became the Cadillac Motor Company on August 22, 1902, after Ford left with the rights to his name. The Ford Motor Company was launched in a converted factory in 1903 with $28,000 in cash from twelve investors, most notably John and Horace Dodge (who would later found their own car company). During its early years, the company produced just a few cars a day at its factory on Mack Avenue in Detroit, Michigan. Groups of two or three men worked on each car, assembling it from parts made mostly by supplier companies contracting for Ford. Within a decade the company would lead the world in the expansion and refinement of the assembly line concept; and Ford soon brought much of the part production in-house in a vertical integration that seemed a better path for the era.
Henry Ford was 39 years old when he founded the Ford Motor Company, which would go on to become one of the world's largest and most profitable companies, as well as being one to survive the Great Depression. As one of the largest family-controlled companies in the world, the Ford Motor Company has been in continuous family control for over 100 years.
After the first modern automobile was already created in the year 1886 by German inventor Carl Benz (Benz Patent-Motorwagen), more efficient production methods were needed to make the automobile affordable for the middle-class; which Ford contributed to, for instance by introducing the first moving assembly line in 1913.
In 1908 Ford introduced the first engine with a removable cylinder head, in the Model T. In 1930, Ford introduced the Model A, the first car with safety glass in the windshield. Ford launched the first low priced V8 engine powered car in 1932.
Ford offered the Lifeguard safety package from 1956, which included such innovations as a standard deep-dish steering wheel, optional front, and, for the first time in a car, rear seatbelts, and an optional padded dash. Ford introduced child-proof door locks into its products in 1957, and in the same year offered the first retractable hardtop on a mass-produced six-seater car. The Ford Mustang was introduced in 1964. In 1965 Ford introduced the seat belt reminder light.
With the 1980s, Ford introduced several highly successful vehicles around the world. During the 1980s, Ford began using the advertising slogan, "Have you driven a Ford, lately?" to introduce new customers to their brand and make their vehicles appear more modern. In 1990 and 1994 respectively, Ford also acquired Jaguar Cars and Aston Martin. During the mid- to late 1990s, Ford continued to sell large numbers of vehicles, in a booming American economy with a soaring stock market and low fuel prices.
With the dawn of the new century, legacy healthcare costs, higher fuel prices, and a faltering economy led to falling market shares, declining sales, and diminished profit margins. Most of the corporate profits came from financing consumer automobile loans through Ford Motor Credit Company.
By 2005, both Ford and GM's corporate bonds had been downgraded to junk status, as a result of high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding market share, and an over dependence on declining SUV sales. Profit margins decreased on large vehicles due to increased "incentives" (in the form of rebates or low interest financing) to offset declining demand. In the latter half of 2005, Chairman Bill Ford asked newly appointed Ford Americas Division President Mark Fields to develop a plan to return the company to profitability. Fields previewed the Plan, named The Way Forward, at the December 7, 2005 board meeting of the company and it was unveiled to the public on January 23, 2006. "The Way Forward" included resizing the company to match market realities, dropping some unprofitable and inefficient models, consolidating production lines, closing 14 factories and cutting 30,000 jobs.
Ford moved to introduce a range of new vehicles, including "Crossover SUVs" built on unibody car platforms, rather than more body-on-frame chassis. In developing the hybrid electric powertrain technologies for the Ford Escape Hybrid SUV, Ford licensed similar Toyota hybrid technologies to avoid patent infringements. Ford announced that it will team up with electricity supply company Southern California Edison (SCE) to examine the future of plug-in hybrids in terms of how home and vehicle energy systems will work with the electrical grid. Under the multi-million-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings", according to Ford.
William Clay Ford Jr., great-grandson of Henry Ford (and better known by his nickname "Bill"), was appointed Executive Chairman in 1998, and also became Chief Executive Officer of the company in 2001, with the departure of Jacques Nasser, becoming the first member of the Ford family to head the company since the retirement of his uncle, Henry Ford II, in 1982. Upon the retirement of President and Chief Operation Officer Jim Padilla in April 2006, Bill Ford assumed his roles as well. Five months later, in September, Ford named Alan Mulally as President and CEO, with Ford continuing as Executive Chairman. In December 2006, the company raised its borrowing capacity to about $25 billion, placing substantially all corporate assets as collateral. Chairman Bill Ford has stated that "bankruptcy is not an option". Ford and the United Auto Workers, representing approximately 46,000 hourly workers in North America, agreed to a historic contract settlement in November 2007 giving the company a substantial break in terms of its ongoing retiree health care costs and other economic issues. The agreement included the establishment of a company-funded, independently run Voluntary Employee Beneficiary Association (VEBA) trust to shift the burden of retiree health care from the company's books, thereby improving its balance sheet. This arrangement took effect on January 1, 2010. As a sign of its currently strong cash position, Ford contributed its entire current liability (estimated at approximately US$5.5 billion as of December 31, 2009) to the VEBA in cash, and also pre-paid US$500 million of its future liabilities to the fund. The agreement also gives hourly workers the job security they were seeking by having the company commit to substantial investments in most of its factories.
However, Ford surprised Wall Street in the second quarter of 2007 by posting a $750 million profit. Despite the gains, the company finished the year with a $2.7 billion loss, largely attributed to finance restructuring at Volvo.
On June 2, 2008, Ford sold its Jaguar and Land Rover operations to Tata Motors for $2.3 billion.
During Congressional hearings held in November 2008 at Washington D.C., and in a show of support, Ford's Alan Mulally stated that "We at Ford are hopeful that we have enough liquidity. But we also must prepare ourselves for the prospect of further deteriorating economic conditions". Mulally went on to state that "The collapse of one of our competitors would have a severe impact on Ford" and that Ford Motor Company's supports both Chrysler and General Motors in their search for government bridge loans in the face of conditions caused by the 2008 financial crisis. Together, the three companies presented action plans for the sustainability of the industry. Mulally stated that "In addition to our plan, we are also here today to request support for the industry. In the near-term, Ford does not require access to a government bridge loan. However, we request a credit line of $9 billion as a critical backstop or safeguard against worsening conditions as we drive transformational change in our company" GM and Chrysler received government loans and financing through T.A.R.P. legislation funding provisions.
On December 19, the cost of credit default swaps to insure the debt of Ford was 68 percent the sum insured for five years in addition to annual payments of 5 percent. That meant $6.8 million paid upfront to insure $10 million in debt, in addition to payments of $500,000 per year. In January 2009, Ford reported a $14.6 billion loss in the preceding year, a record for the company. The company retained sufficient liquidity to fund its operations. Through April 2009, Ford's strategy of debt for equity exchanges erased $9.9 billion in liabilities (28% of its total) in order to leverage its cash position. These actions yielded Ford a $2.7 billion profit in fiscal year 2009, the company's first full-year profit in four years.
On November 1, 2012, Ford announced that CEO Alan Mulally will stay with the company until 2014. Ford also named Mark Fields, the president of operations in Americas, as its new chief operating officer Ford's CEO Mulally was paid a compensation of over $174 million in his previous seven years at Ford since 2006. The generous amount has been a sore point for some workers of the company.
In 2010, Ford earned a net profit of $6.6 billion and reduced its debt from $33.6 billion to $14.5 billion lowering interest payments by $1 billion following its 2009 net profit of $2.7 billion. In the U.S., the F-Series was the best-selling vehicle for 2010. Ford sold 528,349 F-Series trucks during the year, a 27.7% increase over 2009, out of a total sales of 1.9 million vehicles, or every one out of four vehicles Ford sold. Trucks sales accounts for a big slice of Ford's profits, according to USA Today. Ford's realignment also included the sale of its wholly owned subsidiary, Hertz Rent-a-Car to a private equity group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005. A 50–50 joint venture with Mahindra & Mahindra of India, called Mahindra Ford India, Limited (MIFL), ended with Ford buying out Mahindra's remaining stake in the company in 2005. Ford had previously upped its stake to 72% in 1998.