Wednesday 9th July 1919
The Ford Motor Company was reorganised as a Delaware corporation with Edsel Ford as company president. The reorganisation was the last step in Henry Ford’s drive to gain 100% of the company’s stock for his family. He borrowed heavily in order to buy out the minority shareholders. The extent to which the Ford family has maintained control over the company makes Ford unique in the annals of business history. Edsel Ford held the title of president until his death in 1943, but Henry effectively ran the company until 1945, when Henry Ford II took control of the company. The year following the Ford stock buyout saw a postwar recession that rattled the automotive industry, forcing Henry Ford to the brink of defaulting due to his heavy borrowing to manage the buyout. Ford implemented a ruthless cost-cutting policy, pinching pennies in production and administration while laying off half of his office staff and three-quarters of his foremen. Still short of money, he used all of his remaining stock parts in the winter of 1920-21 to build tens of thousands of Model Ts, shipping them to Ford dealers who were still struggling to sell existing Model Ts. Faced with the prospect of losing money on sales or losing their dealerships, the dealers were forced to push the extra cars hard. They never forgave Henry Ford for his extortionist policy, but it worked, and Ford turned the company around. By 1923, Ford held 60% of the domestic car market. Henry Ford earned respect in Wall Street for his initiative, probably because he saved so many of their dollars. A Dow Jones release described Ford as having “displayed a degree of financial astuteness totally unexpected.” Similar authoritarian tactics would lead Ford and his company into trouble in the years after the Great Depression.