Ford Motor Company is Formed
Henry Ford incorporated his Ford Motor Company in June 1903. The new company took over the assets of a limited partnership Ford had formed the previous year with Alexander Y. Malcomson. Ford provided the mechanical skills and Malcomson the initial capital for a partnership that would produce passenger vehicles powered by internal-combustion engines. Because he had already tried twice to develop a successful automobile business. Ford had a design for a car and a plan for how to assemble it at the shop he and Malcomson had rented. He intended to rely on others to make most of the components. Ford & Malcomson contracted with the Dodge Brothers (John and Horace, founders of the auto company that would eventually become part of Chrysler) to manufacture 650 chassis, consisting of engine, transmission, and axles; they contracted with the C.R. Wilson Carriage Company for wooden bodies; and they secured additional components from other suppliers. As the partnership moved into production, they incorporated the Ford Motor Company so that they could enlist other investors as stockholders and thereby raise the capital necessary to actually assemble the planned 650 automobiles. Barely staying ahead of creditors thanks to James Couzens, an assistant who worked for Malcomson, Ford was able to produce the autos and sell them, setting the stage for placing a new set of orders to suppliers for a modified 1904 model and, more significantly, the Ford Motor Company's development into one of the important innovators of the early automobile industry.
In the process of building his first few models of medium-priced cars, and in the context of an automobile industry that had yet to prove where it was heading. Ford become convinced that there was a huge market in the U.S. for an inexpensive car that was light-weight but of high quality, and that was powerful but did not require great mechanical skill to operate. As he continued building the other models, he devoted a portion of his Detroit factory to developing a new kind of car that he believed would satisfy the market he perceived. He introduced that car, the Model T, in 1908. Meanwhile, he had moved his factory from a rented space to a building built by the Ford Motor Company on Piquette Avenue in Detroit to assemble autos. The assembly process involved teams of men working at a variety of stations, each dedicated to assembling a particular sub-assembly and surrounded by piles of parts supplied by others. In 1905, Ford and Couzens formed the Ford Manufacturing Company, both as a means of wresting control of the Ford Motor Company from the other investors and of producing parts for Ford cars. For the latter purpose, the Ford Manufacturing Company rented a separate factory and hired new employees, among whom was a group of mechanics who had the skill and acumen to work with Ford in moving the enterprise toward the principles of mass production. Those principles initially involved an emphasis on interchangeable parts and arranging machine tools according to the sequence by which parts were produced (rather than by arranging all the machine tools of a particular part in a given room).