History of Ford Motor Company, Part 4

During the 1990s, with the spread of environmentalism, and government intervention in the banking, finance and automotive industries, the market for cars became remarkably complicated and Ford, like other U.S. auto companies, struggled to compete.

In 1992, Ford bought another 50 percent stake in Japanese innovator Mazda and, in 1999, Ford bought Volvo and an electric car company. Also in the 1990s, Ford opened its first dealerships in Communist China and, in the U.S., complied with government orders to produce a Taurus that uses the government-sponsored, corn-based fuel known as ethanol, which its advocates—mostly government-subsidized Iowa corn farmers and environmentalists—claim is better for the environment.

Despite the proliferation of environmentalism, demand for SUVs continued to grow—partly powered by government banking regulations which encouraged consumer spending on credit—and, in 1996, Ford built its 250 millionth product. Selling heavy trucks like the Freightliner and mammoth SUVs such as the Lincoln Navigator, Ford also sold the first taxicabs to use natural gas to New York City.

Ford relocated its Lincoln-Mercury headquarters to business-friendly Irvine, California, in 1998, and Bill Ford Jr. became Ford chairman a year later. In 2000, Ford bought Land Rover from BMW, made a retro, two-seat Thunderbird and survived a rollover controversy surrounding the Explorer. Though government investigators concluded that tire defects caused the rollovers, Ford was castigated by the tire manufacturer, Bridgestone/Firestone, for Explorer’s deadly rollovers.

An environmentalist car sanctioned by the ecological activist group Sierra Club, the hybrid SUV Mercury Mariner, came out in the summer of 2005, costing $4,000 more than the gas-powered version. With the United Auto Workers (UAW) forcing Ford to practically cover every worker’s lifetime medical treatment—Ford’s 2005 health care costs were $3.5 billion—the company struggled to survive. While the government was dictating how to make cars which were more expensive to produce and the union was demanding more entitlements, the result of their labor, Ford’s vehicles, lost market share for the 10th year in a row. By 2006, Ford announced it would cut up to 30,000 jobs and close 14 plants by 2012.

With historic government takeover of the automotive industry, Ford’s ability to survive in a market controlled by the state is questionable. But this is a company created by a fiercely independent, tenacious innovator—America’s largest private car company to bear the name of the man who created it—and with the success of the new Ford Flex, a forthcoming, 400-horsepower Mustang and bold leadership from Ford’s intelligent executives, fighting to stave off government control, Ford Motor Company may be the U.S. auto industry’s last, best hope.

[Sources: Mike Davis, Ward’s AutoWorld (2003), National Public Radio, Ford Motor Company]

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