Ford Motor Company
Fact File:
Founder: Henry Ford, Alexander Malcomson, John W. Anderson,
C.H. Bennett, James Couzens, Horace E. Dodge, John F. Dodge,
Vernon C. Fry, John S. Gray, Horace H. Rackham, Albert Strelow,
and Charles J. Woodall.
Distinction: Completely transformed the process of manufacturing.
Primary products: Cars, Trucks, auto finance.
Annual sales: $162.558 billion.
Number of employees: 364,550.
Major competitors: DaimlerChrysler, General Motors, Toyota.
Chairman and CEO: William C. Ford Jr.; President and CEO:
Jacques A. Nasser.
Headquarters: Dearborn, Mich.
Year founded: 1903.
The Ford Motor Company's primary claim to the corporate hall o f fame has
always been its invention of the assembly line, a remarkably simple yet
stunningly effective innovation that completely changed the course of
manufacturing. In ensuing years, Ford has additionally become known as a
global goliath, an amalgamator of some of the best known brands in the auto
business, and even a leader in the industrial charge toward the Internet. These
days, however, it is also developing a new and somewhat surprising reputation
for environmentalism.
In an Industry never associated with "green" activism, many consider Ford's
drive in this direction downright astonishing. It began in May 2000, when
recently installed board chairman William Clay Ford Jr.greatgrandson
of
founder Henry Fordconceded
for the first time that sport utility vehicles emit
more pollution than cars and can be dangerous to others on the road. He
pledged to make these SUVs, which accounted for 20 percent of the
company's sales and most of its profit, cleaner and safer. He followed through
by promising to boost their fuel efficiency by 25 percent over five years. And
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he challenged his competitors to do likewise.
The initiatives caught many off guard, but Ford has always been good at
assessing public taste and adjusting its output accordingly. The Model T, its
first success, dominated the embryonic automobile market by providing
inexpensive and reliable transportation for the earliest drivers. When sales
lagged, the company developed flashier and more comfortable alternatives.
And as demand continually evolved, so did Ford. It introduced new features,
became one of the first automakers to expand overseas, modernized its
facilities, opened a finance subsidiary, and even purchased complementary
companies to help expand its market share.
Todaywith
a stable of brands that includes Aston Martin, Jaguar, Lincoln,
Mercury, Mazda, Land Rover, and Volvo, as well as the Ford brand namethe
company is the world's numberone
truck manufacturer and second largest car
maker. Its Ford Motor Credit division is the top auto finance company in the
United States. It has implemented computer programs that are as innovative as
its development of the assembly line. And, according to consumer demand, it
is leading its industry toward greater environmental responsibility.
The Ford Motor Company began operation in 1903, when Henry ford and 11
associates raised $28,000 to open a tiny manufacturing plant in a Detroit
wagon factory. Initially the company's vicepresident
and chief engineer, Ford
had been looking forward to this nearly all his life. A few weeks later, he sold
his first twocylinder
Model A to a Chicago dentist. Over the next 14 months,
he sold 1,700 more.
Born in 1863 in Greenfield Township, Mich., Ford always preferred
mechanical pursuits to the farm duties he was expected to perform with his
five younger siblings. His fate was sealed at age 13, when he saw a steam
engine traveling under its own power. Ford jumped off the wagon on which he
was riding with his father to examine it, and decided right there to become an
engineer. Three years later he left for Detroit and a job as an apprentice
machinist with the Michigan Car Company. After two years, he accepted a
better position as an engineer with the Edison Illuminating Company.
During his stint with Edison, Ford began work on a gasolinepowered
vehicle.
In 1896 he produced his first: the Quadricycle, which had four bicyclelike
wheels, a tiller for steering, and two forward gears. In order to focus fulltime
on advancing his ideas, he left Edison in 1899 to open the Detroit Automobile
Company. That enterprise failed, as did a second one started two years later.
But his third attempt, which he named after himself and opened with
sufficient capital to weather initial difficulties, proved a winner.
The first few years of Ford Motor were heady ones indeed. The firm expanded
rapidly, opening Ford Motor Company of Canada just one year after its
founding. By 1907, it was exporting cars to Europe. Within a decade, it had
plants in Australia, South America, and Japan. At the same time, Ford kept
tinkering with new designs. He used one letter of the alphabet after another to
designate them, although many never made it out of his shop. One that did
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was the Model N, a spunky fourcylinder
vehicle that sold for $500. Since he
was almost solely responsible for these early products, it was not surprising
that Ford soon became the company's president and majority owner.
His big breakthrough came in 1909 when he unveiled the Model T. Also
known as the Tin Lizzie, it really captured the public's attention and Ford
quickly received an astounding 10,000 orders for them. Demand forced him to
open a larger plant in nearby Highland Park, but even that proved insufficient
because of a production process that had individual workers assembling one
entire care before moving on to another. Ford put his engineering skills to
work on the problem and in 1913 found a way to speed up production by
using and improving upon a recent manufacturing innovation called the
assembly line. At first, it had workers walking from one partially built car to
the next in order to install the same component over and over, eventually, he
improved the procedure by putting everything on conveyor belts so parts and
cars would travel directly to produce 168,000 carshelping
the Model T
account for onethird
of the entire American automobile market.
Ford was hardly finished, though. He bought out his partners and built the
world's largest industrial complex. He purchased the Lincoln Motor Company
and began producing trucks, tractors, and even airplanes. (He even ran for the
U.S. Senate, but lost.) And when Model T sales lagged due to increasing
competition shortly after the millionth one was produced, Ford developed a
faster and more comfortable version that he named after his first product. This
new Model A was announced in 1927, and 400,000 orders were placed even
before production began. Almost 2 million were sold until the stock market
crash two years later.
But even the Great Depression could not stop Ford. Ford introduced the
powerful V8
engine and mediumpriced
Mercury line which boosted
sales…that is until World War II temporarily halted civilian production.
During the war, his plants turned out B24
bombers, jeeps, tanks and related
machinery. And in 1945, passenger cars again graced his assembly lines. Ford
died two years later at age 83, however, and did not have long to savor the
resurgence.
The system he developed, nonetheless, continued functioning smoothly.
Innovative models like the Thunderbird sports car were regularly unveiled,
and shortly after the company went public in 1956 in the largest stock issue to
date it produced its 50millionth
vehicle. Grandson Henry Ford II took over,
with daytoday
responsibilities going to heavy hitters, such as Robert
McNamara (who resigned in 1961 to become Secretary of Defense) and Lee
Iacocca (who left in 1978 to assume the presidency of Chrysler). A series of
down years followedas
they did for all American automakersthanks
to
industrywide
arrogance and increasing Japanese competition. But innovative
cars, such as the Taurus and Escort, along with the Fseries
pickup truck,
helped bring Ford back. By 1986, earnings exceeded those of General Motors
for the first time in six decades and it purchased Aston Martin, Jaguar and
other companies. Just five years later, though, another period of malaise and
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stagnation led Ford to announce its largest oneyear
loss ever. Desperate for
recovery, the company finally decided that enough was enough.
Beginning in the mid1990s,
as Ford produced its 250millionth
vehicle, the
company initiated a series of changes that were more farreaching
than
anything since Henry first cranked up his assembly line. Chief among them
was Ford 2000, an ambitious plan to eliminate duplication in operations
worldwide. They also included development of several innovative new
models, an agreement with Nissan to sell Fords in Japan, and the acquisition
of Hertz, the world's largest rental car company. These moves were soon
joined by the purchase of Europe's largest auto maintenance chain, and plans
to launch a similar effort in the United States; the acquisition of Sweden's AB
Volvo, which gave Ford additional luxury lines along with increased
European presence; aggressive movement into previously under served
countries like China, India, and Vietnam; and joint ventures with Microsoft
and Priceline.com to build cars specifically for online customers and deliver
them through local dealerships.
Ford additionally began using computers to cut costs and development times
for everything from crash simulations to initial car designs. (The former,
which cost $60,000 a piece in 1985, could be run for only $10 in 2001; the
latter, which once took 12 people 12 weeks to complete, now could be
accomplished in three weeks by a single person.) To further increase computer
literacy among its employees, Ford also announced a trailblazing program that
permits all workers to purchase a home computer, color printer and Internet
access for just $5 a month.
The most striking program of all has been Ford's newly expressed effort to
"merge industrialism with environmentalism," as the chairman and family heir
told Newsweek in the spring of 2000but
that is hardly the end of its ongoing
transformation. Barely a month after that announcement the company became
one of the first major manufacturers to offer full medical benefits for samesex
partners of its employees, and one month later said it might begin building
cars in Japanese plants run by its partner Mazda Motor Corporation as soon as
2002.
Henry Ford may not have agreed with all these moves. But he probably would
be pleased that, through them, his company remains firmly atop the industry
he helped establish.
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Apple Computer
Fact File:
Founder: Steve Jobs, Steve Jobs, Steve Wozniak, and Mike
Markkula.
Distinction: Brought computing to the people.
Primary products: Personal computers, peripherals, multimedia
tools.
Annual sales: $6.134 billion.
Number of employees: 9,736.
Major competitors: Compaq, Microsoft, Sun Microsystems.
CEO: Steve Jobs.
Headquarters: Cupertino, Calif.
Year founded: 1976.
Once upon a time, in a tale that's often told, two young Steves were practicing
a kind of 20th century alchemy in a tracthouse
neighborhood in northern
California... when lightning struck. Working in a nondescript garage, the pair
was twisting wires and chanting incantations in an obscure language called
Programming when they came up with a device that would change the world.
On April Fools Day of 1976, the borrowed the name of the recording label
used by their favorite musicians and brought their first Apple Computer into
the sunshine.
Throughout the land, those awaiting a sign instantly recognized that this
device would indeed change their lives. It put an astounding powerpreviously
available only to a select fewdirectly
into the fingertips of the masses. It did
have some limitations and cost almost its weight in gold, but it sparked a
revolution nonetheless in which the two young Steves were revered as gods.
From the start, an eager flock willingly offered financial and creative
assistance and the Apple flourished. Many of those who served it realized
riches far beyond their wildest dreams. Many others clamored to join the
crusade. Disciples built even newer devices that captivated even more
fanatical followers. The two young Steves were on top of the world.
Then, everything collapsed. Another messiah offered a compelling alternative.
Supporters split into opposing camps. Visionary leadership disappeared. Both
nolongeryoung
Steves left their positions of influence, replaced by a series
of pretenders who tired in vain to recapture the lightning. Reluctantly and
otherwise, followers turned away from the device they once worshipped.
But just when all seemed lost, those still struggling with the oncemighty
empire had a revelation. They met with one of the two nowmiddleaged
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Steves and pleaded with him to return. To most everyone's surprise, he didalbeit
cautiously at first. And, in virtually no time at all, he showed that he still
had the touch.
When Steven Paul Jobs initially moved back to his native northern California
in 1975, the 20yearold
college dropout was casting about for something
interesting to do following his recent pilgrimages to India and a communal
farm in Oregon. Working as a videogame
programmer for Atari, he got wind
of a hobbyist group in Menlo Park called the Homebrew Computer Club. He
began attending evening gatherings, and was there when a member showeed
up with his spanking new Altair personal computer. The primitive contraption
had been built from a kit ordered through an Albuquerque mailorder
company, and to folks like the Homebrewers it was a very big deal. Most in
attendance saw potential. Jobsw envisioned a business plan.
Lacking the technical skills needed to make his vision a reality, Jobs teamed
up with another longhaired
Homebrewer named Steve Wozniak. "Woz," as
this 25yearold
son of a Lockheed missile engineer was known, had already
written programming language and designed a circuit board. He had also
parlayed his passion for electronics into a job at Silicon Valley pioneer
HewlettPackard,
but he recognized the possibilities n what Jobs envisioned.
To raise the funds necessary to proceed, he sold off his programmable
calculator while Jobs parted with his Volkswagen van. The pair then got down
to business in the garage of Jobs' parents' home in Los Altos.
The first product of their collaboration was the Apple I, a basic circuit board
they sold through a local retailer for $500. Ready to move their business to the
next level but recognizing their limitations, they convinced 34yearold
Mike
Markkula. Markkula was a recently retired electrical engineer from Intel who
became a multimillionaire on its initial public offering. With Wozniak focused
on technical matters, Jobs and Markkula gathered cash and loan commitments,
leased a building in Cupertino, and formally incorporated on the third day of
1977.
Their first honesttogoodness
computer, the Apple II, was introduced some
15 months later. Built almost singlehandedly by the resourceful Woz, it
debuted in 1978 at the inaugural West Coast Computer Faire. Observers were
instantly smitten with this powerful new selfcontained
gadget that attractively
incorporated screen, keyboard,
power source, and graphic capabilities.
Annual sales quickly reached $300 million, landing the company on the
Fortune 500 and attracting the attention of the media (along with wouldbe
competitors such as Tandy and Commodore). Hordes of early adopters made a
beeline for the technology. By 1980, sales of personal computers topped $1
billion.
The scruffy gang at Apple had captured more than 15 percent of the rapidly
expanding action when IBM belatedly realized it could no longer ignore these
upstarts. And when the king of the mainframes did jump into the desktop
marketplace, its traditional suitandtie
image (not to mention its long
electronic heritage) proved compelling to major businesses. Apple's once
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insatiable appealwhich
always relied heavily on hobbyists, educators, and
artistic typesnever
really crossed into the world of big businesssuddenly
stopped growing. In fact, its market share began a precipitous decline that
would increasingly prove difficult to stem.
Jobs and Apple were convinced that they would prevail. They stubbornly
cultivated an anticorporated image that further accentuated their differences
with the new sales leader, which had the ultimate and unintended effect of
driving the critical corporate market even further from their door. AT the
same time, they consistently widened their technological lead.
The company's next groundbreaking
innovation began forming shortly after
Jobs toured Xerox's Palo Alto Research Center (or PARC) in 1979. Xerox
produced a very early computer called the Alto, which was the first to use
both a mouse and graphical interface.
He eventually incorporated the revolutionary graphical developed (but never
used) by the legendary PARC lab into Apple's third big introductionthe
Lisa
computer (named after his own young daughter). The Lisa was the first
commercial computer to put both ideas together. With it, he was drawing the
definitive line in the sand between his nonconformist Apple corps and its
buttoneddown
rival. But while Lisa was a technological marvel and a brilliant
esthetic accomplishment, its $10,000 price tag proved too steep for
consumers. IBM's newest PCs, on the other hand, flew off shelves.
Apple pressed on. A band of its top engineers had been working on a totally
different computer called Macintosh while Jobs was engrossed with the Lisa.
It was based on a remarkable clickanddrag
technology that even a small
child could learn and use. In a move that forever split Apple into bitter
factions, Jobs unilaterally appropriated the project as his own after he was
removed from the failing Lisa endeavor. He drove out those uncomfortable
with his lead, relocated the development team into its own building, raised a
skullandcrossbones
flag, and took over "the computer for the rest of us."
Its introductory commercial, one of his most famous advertisements ever
made, was designed to definitively drive the computerbuying
public into
either Apple or IBM camps. And its message remains as obvious today as it
did on that 1984 Super bowl Sunday, when the gritty vision of a monotheistic
futurea
blatant warning against a big Bluedominated
computer worldwas
bashed by a freedomloving
young woman with a sledge hammer. The intense
ode to George Orwell, directed by Ridley "Blade Runner" Scott, cost #1
million to make, and aired one time. It left more than a few company
executives nervous and football fans puzzled, it's as seen in almost half of all
American homes. By the next morning when Jobs officially unveiled his new
20pound
baby, the public was primed and ready. Apple says 72,000 Macs
were sold in 100 days. Within a year, company sales hit $2 billion. This
changed everything in computer operating systems, shifting operation from
hardtoremember
DOS commands to the direct manipulation of windows and
icons.
The decades since the advent of the Mac have been up and down for Apple, to
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say the least. The Macintosh rollout
would be its last high point for more than
a decade. Woz had moved on practically from the moment his offspring took
off. He snagged an engineering degree, staged rock concerts, and taught kids
about computers. Jobs was unceremoniously ousted in 1985 by John Sculley,
a former Pepsi executive brought into Apple specifically to tighten up the
company's image on Wall street. Just 30 and quite wealthy, Jobs didn't wait
long before starting another iconoclastic computer company called NeXT. He
also bought Pixar Animation Studios, which would go on to produce the
acclaimed A Bug's Life and Toy Story movies.
Apple continued to falter. IBM couldn't hold its advantage in the desktop
business as lowerpriced
"clones" flooded the marketplace. However, the
technological conventions it establishedalthough
decidedly inferior to
Apple'sbecame
the undisputed industry standard. More than 95 of every 100
customers began choosing an "IBMcompatible"
computer, leaving Apple in
the dust. Sculley was eventually replaced by Michael Spindler, who in turn
was replaced by Gil Amelio. And then, in July 1997, Amelio was ousted and
the prodigal Steve was welcomed back as "interim" CEO.
One day after his returnfor
which he was initially rewarded with just one
share of stock and $1 a year in salaryJobs
began work on a device that would
once again change the world: the iMac. Introduction of this striking
translucent computer one year later reaffirmed Apple as the leader on the
technological curve, and jumpstarted
its long languishing sales as well as its
depressed stock price. Several record quarters later, in January 2000, the board
rewarded his efforts with a Gulfstream V jet and $10 million in stock options.
In turn he dropped the "interim" from his title.
Can lightning strike twice in the corporate world…Who knows? But as Jobs
continues rebuilding his once and future empire, he demonstrates with every
move that no ending can be written just yet for this ofttold
tale.
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