In another thread a few items were discussed that FoMoCo minutes address. Instead of placing this "stuff" at the bottom of what has become a long thread, following are "snippets" from board minutes. All items are copied from The Henry Ford, Benson Library Accession 512, Box 4, Folder 1903-1911.
I call this page the "Oh s - - t" page (I guess "shoot" should have one more letter ). Evidently upon learning that A.Y. Malcomson started a new company, the Ford Board of Directors called a meeting and passed the following resolution:
My belief is, from this point forward, although A.Y. Malcomson was still one of the two largest shareholders in FMC (both he and Henry Ford owned 150 shares), he (Malcomson) had no effective voice in the company. This is three and one half months prior to the first documented Model K sale, mid April 1906.
Next, a page from the January 9th, 1906 minutes where the board agrees to purchase 10,000 Model N chassis and 1,000 Model K chassis.
(NOTE: THIS IS AN IMPORTANT DATE. THIS IS THE FIRST BOARD ACTION ORDERING MODEL K AND N CHASSIS. A.Y. MALCOMSON HAS LEFT TO FORM HIS OWN COMPANY WHEN THE BOARD, WITH HENRY FORD HOLDING THE MOST SHARES BY FAR, ORDERS THE MODEL K CHASSIS)
The cost of each respectively, N - $207 each, K - $437 each. This along with the fact K number 952 is still in existence give us a figure of somewhere between 952 and 1000 Model Ks were produced:
Interestingly the Model N chassis specifies "without cooler" (radiator) while the K chassis does not specify. Chassis in both cases includes motor.
The following page, dated May 16, 1905, details concern about sales problems with "2 cylinder" cars. The board takes action reducing the cost to dealers. This is midway through Model B production, and there doesn't appear to be any issue with "B" sales (my take):
This portion of an April 1904 board meeting page indicates the estimated cost of the Model B at $900. The board agrees to place a list price of $2000 on the car (a good example of the potential profits Ford expected from it's cars):
The board minutes have provided a wealth of information about he inner workings at Ford Motor Company. From the first sale forward, except for a few instances such as above where the two cylinder cars prices were revised downward, all models appear to have been hugely successful. Another insight (that would require another lengthy post) are the numerous 100% dividends FMC issued shareholders.
I'm sure we all wish we had shares of a company like FMC between 1904 and 1909 in our 401K.
Great information Rob.
It's yet another example of how the Model K was the end of the era where Ford outsourced construction of the Model K chassis entirely to Dodge Brothers. By outsourcing the manufacture of the Model "N" chassis to his own company it forced Malcomson to realize he was being cut out of any potential Model "N" profits, leading to the sale of Malcomson's shares to Henry Ford on July 12, 1906 to Henry.
Obviously when we discuss profits of Ford Motor Company on the Model K versus the Model N we don't take any note of the profits being made by the company supplying the chassis to Ford Motor Company. In the case of the Model N, Henry was profiting on both ends of the deal. The profits of the Ford Motor Company were not the only profits Henry received from the Model N.
In some ways, this is like "the gift that keeps on giving."
Yes, Ford Manufacturing Company was profitable. However, the Ford Motor Company audit information has no interest in what contributing companies did or did not make. Dividends paid to Ford Motor Company investors were frequent and large, indicating continued strong growth.
As for outsourcing, the radiators, bodies, wheels, frames, oilers ,tires, bearings and seats (to name a few parts) were outsourced for both Models N and K.
Finally, John Dodge was a director with Ford Motor Company, and was Vice President of Ford Manufacturing. Both John and Horrace were shareholders in both companies, so any suggestion that Ford Manufacturing was a conduit to avoid paying dividends, or way to "end around" Ford Motor Company investors just doesn't make sense.
One plausible argument I've read was that, if Ford Motor Company lost the Selden Patent suit, Ford Manufacturing Company, as a parts supplier, would have been exempt from any damages or other compensation owed.
However, I don't know these things, I'm just arriving at suppositions based on my research.
Every reference I can find to Ford Manufacturing Company suggests that it was formed solely to reduce the profits paid to Alexander Malcomson, to force him from the company. See the excellent book "My Forty Years at Ford" by Charles Sorensen, pages 77 - 78.
Click here to see it, scroll down and click on chapter "X":
You have two references, "My Forty Years" and Joe Galamb's Reminisces. I've reviewed both, and they are factored into my responses.
I own dozens of books on Ford history. Most of them cite Galamb and Sorensen as references. I see no reason to doubt the accuracy of either of these long time associates of Henry Ford.
Sorensen and Galamb were "workers" at the time decisions were being made at Ford Motor Company (or shortly after) about models and direction the company was moving (1904-1907)
I give credibility to James Couzens and original investor C. H. Bennett rather than a young pattern maker and Hungarian immigrant, as far as "front office" knowledge of intimate business details.
From James Couzens biography, "Independent Man: The Life of Senator James Couzens" Harry Barnard -
Wayne State University Press
According to James Couzens biographer, regarding Malcomson, "it is a curious thing how little he (Malcomson) figured in its affairs after the company was launched"
And C. H. Bennett, one of the original Ford Motor Company stockholders, his reminisces (courtesy The Henry Ford):
C. H. Bennett said in 1952, "I don't think that Mr. Malcomson went up to that factory on Piquette Avenue twice a year."
You may choose to base assumptions on what two young employees report decades later. I choose to base my assumptions on two men who were involved from the beginning. Who sat in on every board and shareholder meeting (Couzens) and spoke with Henry Ford as vested founders (Bennett and Couzens) of Ford Motor Company.