Ford Motor Company, Happy 100!

Organizations are often mixture of fundamental philosophies.  For decades, the electronics industry in Silicon Valley has nicknamed the categories of Engineering as nerds, Financial as bean counters, and Marketing as glad handers. Long term survival appears to require a delicate balance of all three, and any major imbalances can be perilous. An example began with the founding of Ford Motor Company one hundred years ago.  

Ford Motor Company was initially driven by the engineering genius of Henry Ford. The simplicity of the Model T allowed Ford to dominate the early automobile market with a steady combination of technical innovations and the assembly line. The company became so efficient that a Ford factory worker could afford to buy the car he helped to build.  Nevertheless, waiting too long to shift production to newer styles and designs almost bankrupted Ford.  In fact, Henry’s comments about “the customer can have any color they want as long as it is black” is remembered as a classic example of poor marketing.  That inertia allowed a collection of manufactures like Olds, Chevrolet, and Cadillac an opportunity to get a foothold and then dominate the automobile market under a new holding company called General Motors.

The Ford culture first shifted from engineering to marketing under Edsel Ford in the 30’s, then back to engineering military equipment during World War II.  After the war under CEO Henry Ford II, the Ford Motor Company became financially driven.  Henry II thought the problem with Ford was that it had only half the divisions of GM.  When Robert McNamara, a consummate bean counter, became President of Ford in the 1950’s the decision was made that the Edsel Division would to fill that gap.  However, there was an insufficient market for what was also an average engineered new model.  The Edsel was a financial disaster for Ford Motor Company.  In 1961, President Kennedy picked McNamara for Secretary of Defense, and Ford began shifting back to a marketing driven organization.

The 1964 Ford Mustang was the marketing home run that elevated Lee Iacocca to President.  Ford then hit more marketing bulls eyes with light trucks and early SUV’s like the Bronco and later the Explorer.  For a while, Ford was even chipping market share from GM.  However, personality problems between CEO Henry II soon drove Iacocca’s marketing genius over to Chrysler just in time to save that company in the early 80’s with the first of the minivans.

Ford maintained an emphasis on marketing in the 80’s and 90’s and actually had several years of a number one seller with the Taurus automobile and a perennial number one position with the F-150 pickup.  Bringing back the Mustang in the late 90’s and resurrecting the two seat Thunderbird in 2003 indicates that Ford has had four decades with a strong marketing orientation.

Today, GM has about one third of the US domestic vehicle market, while Ford and Chrysler share another third.  During the last 40 years, through gasoline shortages, quality and safety issues, foreign manufactures have secured the other third of the American market. It appears that the future winners and losers in the American automobile market will be a result of the best combination of nerds, bean counters, and glad handers.

Mark Lindberg, a resident of Mountain View, CA has BS degree in mechanical engineering with an MBA, and works as a regional marketing manager in the commercial building industry.  A part time flight instructor and an avid history buff, he is a mixture of a nerd, glad hander and bean counter, and owns two GM vehicles.