Ford Motor Co. Board of Dir. (BOD) excerpts of minutes; food for thought

[Rob]

Attached are excerpts from the Ford Motor Co. (FMC) Board of Directors (BOD) minutes between April 2, 1904 and May 16, 1905. We see in April 1904, while less than one year since incorporation (June 1903), FMC is taking bids for wheels on their next model (Model B was addressed in earlier meetings).

At the August 22, 1904 meeting, actual production numbers are addressed. Initially, A.Y. Malcomson puts forward a motion for 2,500 “small cars” (C & F). This is an interesting moment, in my opinion, in FMC history. Malcomson’s motion not only fails, it receives no second. For me, this indicates a lack of support by other board members, (as opposed to historical views that Malcomson held sway over a majority or significant number on the BOD). It also indicates Malcomson’s desire, and/or recognition that the “small cars” were important to the success of FMC (keeping in mind, Model B has already been initially addressed). Bottom line, Malcomson wanted the company to produce more less expensive cars, at this point, than the other directors thought prudent.

Fast forward to May 16, 1905. We see the BOD is compelled, by agent request, to reduce the cost of the 2 cyl. cars by about 20%. No issue is raised regarding the larger Model B cost to agents.

[KeithG]

Rob, At the August 22, 1904 BOD meeting when Malcomson moved that an order be placed with Dodge Brothers for 2,500 small cars and that motion didn't even receive a second, even though "there were historical views that Malcomson was considered to have sway over a majority or significant number of BOD members". Do you suppose that Malcomson was pushing for more small Ford cars because he was already thinking about his own car company in the future even though it would not get started until the Fall of 1905? Could Malcomson be thinking that small car sales would begin to fall and larger cars would be more successful, like the ones he would build in the near future?

Your thoughts?

Keith

[Rob]

Keith,
Good points. It’s difficult to speculate. Up to this time (mid 1905) there didn’t appear to be any daylight between the Ford-Malcomson partnership. Things were going well, no, spectacularly. Tomorrow I’m starting a “120 years ago today” thread that will demonstrate how successful Ford Motor Co. had become.

The car Malcomson would produce was neither a “big car” nor well engineered. Ford cars, C, F and B, all were less expensive in their class, and well engineered. My guess is that Malcomson was a speculator, and believed he could do it better than anyone else. His coal and real estate dealings were “feast or famine” endeavors, and it looks like most of his business life he was heavily leveraged. Henry Ford, and James Couzens, on the other hand, were fiscally conservative, sticking to well grounded rules concerning production and marketing. Still, it’s a bit of a mystery. Malcomson wanted to make more small cars. The rest of the board didn’t. The Dodge brothers were both present, and my belief is they knew they would be stretched to capacity. They were now going to be responsible for producing two different motors and chassis. They didn’t add facilities, and we know from Michigan Department of Labor their workforce didn’t grow much between 1904 and 1905. As it turns out, they hurried through Model C chassis production, and by February or March switched over to the F. Model B components were almost all outsourced to other manufacturers. Interesting times.

Thank you for posting.
Cheers,
Rob

[KeithG]

Hi Rob, Thanks for the reply. I guess we'll never know for sure. I like the idea that Malcomson was a speculator, and as such goes for feast or famine. In my opinion, should have known better than to compete with Ford.

Cheers, Keith

[Rob]

Keith,
If you see my next post, as of June and July 1905, one would think the shareholders would have thought “whatever you’re doing, keep it going,” regarding the leadership choices at FMC. However, Malcomson was already preparing to start a competing company, as he sat in a leadership position within FMC.
Hard to understand. Hubris? Wounded ego? Hard to know. Certainly not a good business choice. And over the next year, through July 1906, will see the “Tale of Two Cities,” regarding Henry Ford and A.Y. Malcomson. One will go down in history as one of the greatest industrialists of all time. The other a sad footnote.