From Taylorism to Empowerment: Ford
Ford is one of the most well-known American automobile manufacturers, founded in 1903 by Henry Ford. Over the years, it has become synonymous with American innovation and productivity.
However, the company has had its ups and downs, including a period of poor employee performance and a loss of market share to foreign competitors. Let’s take a look at its history and see how it reached where it is right now
Early Days
Ford was founded in 1903 in Detroit, Michigan, with a capital investment of $28,000. At the time, automobiles were a luxury item, and only the wealthiest Americans could afford them. However, Henry Ford had a vision to make the automobile accessible to everyone. He believed that by mass-producing cars on an assembly line, he could lower the cost of production and make them affordable for the average person.
In 1908, Ford introduced the Model T, which was the first automobile to be mass-produced on an assembly line. The Model T was a huge success, and by 1913, Ford was producing more than 200,000 cars per year. This was a remarkable achievement and helped to make automobiles affordable for millions of Americans.
The Taylorist Era
And here begins the dark side of Ford….
Ford’s success was not without its drawbacks. The company’s production methods were based on the principles of scientific management, or Taylorism, which aimed to maximize efficiency and productivity. This led to a highly regimented work environment in which employees had little autonomy or control over their work.
Workers were expected to perform the same repetitive tasks over and over again, which led to a high rate of employee turnover and poor morale. This, in turn, led to a decline in the quality of Ford’s products and a loss of market share to foreign competitors.
Impact of Toyota’s Advent into the US Market
To remain competitive, Ford realized that it needed to change its approach to employee management. In the 1980s, Toyota entered the US market and introduced a new approach to manufacturing that focused on empowering employees and giving them more control over their work. This made Toyota extremely supreme in Employee efficiency as compared to the likes of Ford, GM, and Chrysler.
Ford recognized that it needed to adopt a similar approach if it was to remain competitive in the global marketplace. The company began to invest in employee training and development programs, and it introduced a more inclusive management style that focused on collaboration and teamwork.
One of the most significant changes was the implementation of the Quality Operating System (QOS), which was based on the principles of Total Quality Management. QOS emphasized the importance of customer satisfaction and continuous improvement, and it encouraged employees to take ownership of their work and to identify ways to improve the quality of Ford’s products.
The QOS program was a huge success, and it helped to improve employee morale and productivity. By the mid-1990s, Ford had become one of the most profitable automobile manufacturers in the world, with a market share of around 25%.
Events That Made or Broke Ford Despite its success
I say Ford You say Unethical!
The Pinto
Ford has had its fair share of challenges over the years. One of the most significant events was the introduction of the Ford Pinto in 1971. The Pinto was a compact car that was designed to compete with foreign imports. However, the car was plagued by design flaws that made it susceptible to fires in rear-end collisions.
The company was aware of the design flaws but chose not to recall the cars, citing the high cost of doing so. As a result, numerous lawsuits were filed against the company, and it was forced to pay out millions of dollars in damages.
The 2008 Financial Crisis Revamp
Another major event was the financial crisis of 2008, which hit the automobile industry hard. Ford was particularly vulnerable, as it had been struggling with declining sales and mounting debt for several years. It reported a whopping 14.6 Billion loss in 2008!
The financial crisis of 2008 forced Ford to take drastic action to remain afloat. The company embarked on a restructuring plan that involved closing factories, laying off employees, and selling off non-core assets. The plan was a success, and by 2010, Ford had returned to profitability.
The Faulty Ignition
Another significant controversy involving Ford was the company’s use of a faulty ignition switch in its vehicles. The switch could turn off the engine and disable the airbags while the vehicle was in motion, which led to several accidents and fatalities. Ford was accused of covering up the defect and delaying the recall of affected vehicles.
The company ultimately paid out millions of dollars in damages and penalties.
Talk about Customer care, eh?
The COVID-19 Safety Deprioritization
More recently, Ford has come under fire for its handling of the COVID-19 pandemic. In March 2020, the company refused to shut down its factories despite concerns from employees about the spread of the virus. The United Auto Workers union, which represents Ford employees, criticized the company for failing to prioritize the health and safety of its workers.
Conclusion
Over the years, Ford has faced numerous challenges and controversies, but it has always managed to adapt and remain competitive in the global marketplace. From its early days of mass production to its more recent focus on employee empowerment and quality management, the company has shown a willingness to change and innovate.
However, some of the controversies that have plagued Ford highlight the importance of transparency and accountability in business. The company’s handling of the Pinto and ignition switch defects shows that the cost of covering up a problem can be far greater than the cost of addressing it upfront.
Moving forward, Ford will need to continue to adapt to changing market conditions and consumer preferences. The rise of electric and autonomous vehicles presents both opportunities and challenges for the company, and it will need to invest in new technologies and business models to remain competitive.
Overall, Ford’s history is a testament to the power of innovation and perseverance in the face of adversity. As the company continues to evolve, it will be interesting to see how it continues to shape the future of the automobile industry. Hopefully, Ford will not kill anymore of its customers to save a couple bucks but this seems like a farfetch dream given its History.