History of General Motors and Ford

History Of Automakers

Ford Motor Company is the fourth largest automaker in the world and has been operating under varied brand names including Lincoln, Mercury and Volvo. Started by Henry Ford in 1902, Ford continues to be a family owned business for more than 100 years. Twelve persons had invested around $31,000 to form this company which was one of the very few firms to survive the Great Depression. Ford began its journey with Model A, moved on to Model K. And also created Model S. Model K. was considered a luxury car owned by gentlemen and was priced higher than most other cars at the time. By 1908, Model T. came into the market and this started the beginning of the company on large scale. Earlier few cars a day were produced in a rented factory but with Model T, expansion was required and the factory moved to Highland Park Plant. In its first year of production at this new plant, close to 70,000 cars were produced. By 1911, the company began expanding overseas as it opened assembly plants England, France, Germany, Denmark and Austria. By 1920, Ford was making 50% of all the cars in the United States and around 40% of British cars. During Great Depression, company reduced its produced and laid off workers but survived any major setbacks. In 1940s, Henry Ford died leaving behind a huge legacy. In the next few decades, the company continued expanding and established itself in Asia-Pacific as well. Many new models were introduced and some of them were immensely successful such as the Taurus which replaced Honda Accord in 1992. However Ford like other automakers in the U.S. faced serious trouble in 2000s and with recent recession, its prospects do not look very bright.

General Motors started its operations in 1908 in Detroit area as the holding company of Buick. The company is now considered the second largest automaker in the world. Within one year after its inception, the company brought well-known brands under its name such as Cadillac, Cartercar and Pontiac. The company was originally owned by William Durant but excessive debt cost him the ownership in 1910 when the bank took it over. Durant then started the Chevrolet Motor company. In 1920s, the company sales surpassed those of Ford Motor Company due to brilliant leadership of Alfred Sloan. In the next decade, the company expanded and started Greyhound bus service. During the Second World War, the company faced threat of nationalization from Nazi government. But due to personal and business contacts, the company abandoned its German operations in return for a complete tax write-off. Its post war growth was impressive as General Motors became the first ever U.S. company to pay $1 billion in taxes. It was also the largest automaker at the time in terms of revenues. The problems started in 1960s with one model after another receiving poor reviews due to major quality issues. By 1980s, company was losing money due to poor product quality, labor issues and lawsuits. Over the next few years, GM continued to perform poorly. With the launch of Saturn Corporation, it hoped to regain its lost glory but while these units were moderately successful, GM's overall share price continued falling and its market share consistently shrunk. By late 1990s the company had managed to regain its market share and its share price went up to $80. But this new situation was short lived and in 2001 after the September attacks, the company went down again and has been in ruins ever since.