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AMERICA’S AUTOMOBILE INDUSTRY

(2958 Words)

ABSTRACT

 

The Industrial Revolution is one of the most remarkable periods in the history of mankind.  Humanity experienced major shifts in technology and science.  Inventors utilized machines to replace physical labor and wealthy investors built large factories.  The sensational development of the motorized transportation is one of the amazing products of the industrial revolution.  The transportation industry was revolutionized with the introduction of the combustion engine.  The history of the automobile begins in Europe during the late 1800’s.  , in 1886, received Patent No. 37435a for the first automobile in the world.  The vehicle also included electronic ignition, carburetor, water-cooled radiator, steering and a tube.  Later,  team up with  and produced the first four-wheeled automobile.   and  aroused the interest of many pioneers in America.  The best-known pioneer was Henry Ford, who founded the Ford Motor Company in 1903.

In the1920’s, General Motors, Chrysler and Ford dominated world production.  The United States accounted for 85 percent of the world’s output of automobiles.  Subsidiaries of Ford and General Motors were responsible for the 15 percent of the auto’s produced overseas.

 

AMERICAN AUTOMOBILE INDUSTRY: BEFORE AND AFTER

THE INDUSTRIAL REVOLUTION

 

Many historians agreed that the Industrial Revolution created some of the world’s greatest advancements in the area of manufacturing. The era brought great change in the way nations obtain wealth and social power.  The Industrial Revolution brought people into factories and move technology closer to automation.   (1977) described the term Industrial Revolution as a profound economic transformations resulting form the introduction of new technologies of production.   (1948) characterized the Industrial Revolution in the following: (a) the mechanization of agriculture and industry; (b) the use of power in industry; (c) the development of factory system; (d) a sensational development of transportation and communication; (e) an increase in big business control economy.

During the end of the 18^th century, the First Industrial Revolution began in Great Britain.  The discovery of the new sources of energy generated many new inventions and theories.  The textile industry received machines, powered by steam, for spinning thread and weaving cloth.  The steam engine derived its fuel from coal.  Most of the power to run the industries in England and in other countries in Europe was supplied by ’s steam engine.  England became a powerful economic force by advancing their production of finished metal and textiles.  Fortunate nations had large deposits of coal and fossil fuels.  The machine made it possible to mass-produce products and create interchangeable components.  The Industrial Revolution created new management techniques, created new cultures and brought a new spirit of innovation in nations.  During this period, suppliers produced goods in hundred of thousans compared to dozens

BUSINESS MANAGEMENT CONCEPTS DURING THE INDUSTRIAL REVOLUTION

The economy during the Industrial Revolution dramatically transformed from agriculture based to industrial production. Before the revolution, goods are produced and distributed in small scale. The development of machines paves way to industrialization. Industrialization applied the processes of specialization and the division of labor. This process resulted in a greater productivity, which in turn reduce costs and the selling price of products. As the job specialization rises the need for exchange also increased. The larger-scale production had brought about the creation of marketing channel that will facilitate the distribution of goods to meet effectively the demand from the larger market. This development laid the foundations of the modern industrial economy, which is still based on the fundamental concept of trade or exchange. Britain dominated the world economy during the first half of the nineteenth century. Britain’s industrial growth was because it developed international trade. Britain was the first trading nation that had secured supplies of raw materials and held a monopoly in the supply of manufactured goods to the underdeveloped countries which collectively made up the British Empire.  (1977) identified the two types of production that pertained in world manufacture until 1913.

• Job production – which is essentially ‘one off’ production where every aspect of production and manufacture is done as a separate task from the design stage to the completion stage.  Here, skilled personnel are needed in design and manufacturing processes as ‘no two jobs are alike’.  As such, it tends to be a relatively expensive process.
• Batch production – is similar in terms of its philosophy to job production, but the numbers produced are more than one.  Sometimes a batch is produced, followed by another similar batch later, and the times between batches are a reflection of when products are needed by customers.

The Problems of Management

Firms produced larger volume, not only for local market, but also for a national and international market. Because of this development during the Industrial Revolution, consumption therefore were scattered in greater distances producers find a difficulty in contacting their markets immediately. Because of this problem, many forward thinking entrepreneurs started to plan their business operations. In order for producers to be able to manufacture goods and services that would appeal and sell in widely dispersed markets, it became necessary for them to carefully analyze and interpret the needs and wants of customers and to manufacture products which would ‘fit in’ with those needs and wants. The process of matching the resources of a firm to the needs and wants of the market place is called entrepreneurship.  Men such as  (1730-95) came to epitomize the traditional entrepreneur with their ability to ‘sense’ what the market wanted in terms of design, quality and price, and then organize production and distribution to satisfy effective demand at a profit. The early entrepreneurs were practicing an early, albeit simplistic, form of marketing activity, although it was not called marketing as such. A craftsman, such as a blacksmith or potter, develops a high degree of skill in a particular activity

The Factory System

Industrialization also led to the creation of the factory. When the production became larger and geographically concentrated, people carried out in building mills or factories. The growth of the ‘factory system’ caused the migration of the population from the countryside to the new and rapidly expanding industrial towns. With the transfer of new technologies from Great Britain to United States, the nation began to build its first industrial factories. In a single building large mills were integrated with spinning and weaving machinery.  Their output surpassed that of spinning mills powered by water in Rhode Island and Southeastern Massachusetts. In United States Francis  for the Boston Manufacturing Company built the first integrated factory in 1814. The corporation employed more than three hundred workers mostly young women from nearby farms. A number of integrated mills owned by different companies were soon operating on the Merrimack, Connecticut and other smaller rivers. In the late 1820, steam-powered mills were opened in Pennsylvania. The wives and the children of workers had to work, too, in factories. It has been reported that the factory system was largely responsible for the rise of the modern city, as workers migrated into the cities in search of employment in the factories ( 2006).

THE AUTOMOTIVE INDUSTRY

The transportation system also revolutionize upon the coming of the automobile industry. The history of the automobile begins with the technological breakthroughs that occurred in Europe during the early 1800’s and continues a century later with the pioneering efforts of American manufactures to begin mass-producing cars at record levels. In 1886, a German named  applied for a patent for his gasoline-powered automobile. In 1894, , of Springfield Massachusetts, introduced the first American production vehicle called the “Buggyant.”  and  successfully built a four cycle engine with two forwards and one reverse. Duryea’s entered and won the first automobile race in the nation sponsored by The Chicago Times-Herald November 28, 1895.   (1970) explains that due to the Duryea’s exceptional quality and ability out perform competitors, prevented the Europeans from dominating the industry in its early stage of the American auto industry.  Their technology can still be seen today in most automobiles.   an American has contributed to the rise of automotive industry with his discovery of rubber vulcanization in 1839.

Daimler’s automobile aroused the interest of the pioneers in the automotive industry. The best-known pioneer was , who founded the Ford Motor Company in 1902.  applied the continuous flow production method. Henry Ford set up the first ever flow line production assembly plant in Detroit USA to manufacture the Model “T’ Ford motor car. By mass or flow production method millions of people could afford them.   (1977) described flow production – as where aspects of manufacture are broken down into their simplest components of labor.  It uses a continuous production line.  As such, unskilled (and less expensive) labor can be used.  More to the point, it is a quicker and more efficient method of production and the savings in production costs should mean that these can be passed onto customers in terms of reduced prices.

 

 

 

 

 

1908 Ford Model T ad from Oct. 1, 1908 Life Magazine

After automobiles began to be sold commercially in the United States in 1913, Ford and General Motors produced over half the annual output than passenger vehicles. The record shows 40% for Ford and 12% for General Motors. In 1920s, General Motors and Chrysler successfully succeeded Ford. The Big Three in the United States accounted 85 percent of the world’s output of automobiles. Subsidiaries of Ford and General Motors were responsible for the 15 % produced abroad.

In (2006) reported that as of 2005 there are 500 million cars worldwide (0.074 per capita), of which 220 million are located in the United States (0.75 per capita).

 

THE AMERICAN INDUSTRIAL REVOLUTION

The effect of the First Industrial Revolution in Great Britain has spread throughout the rest of the world. It has a significant impact on the economic life in America. However, the economic transformation began only a century later and marked the beginning of the Second Industrial Revolution. In  (2006), the Second Industrial Revolution began around 1850. The Second Industrial Revolution was characterized by a gradual growth in chemical industries, petroleum refining and distribution, electrical industries and in the 20^th century, the automotive industries. The United States and Germany were the center of the Second Industrial Revolution. This period marked the shift of technological leadership from Great Britain to the United States. In the year 1890s the industrialization in these areas become rapid. The United States became the major supplier of cotton for Britain. The increase in the demand for cotton in Britain had become a major factor in the establishment of slave plantation in America. New York became the marketing and shipping point of textiles and hardware that quickly made the city the nation’s commercial center.

The Second Industrial Revolution transformed the American economy into a modern industrial form. This revolution was characterized by three major developments. First was the completion of modern transportation and communication networks in the United States like the railroad, telegraph, steamship and cable. Second was the coming of electricity in 1880s. This provided a more flexible source of power for industrial machinery and for a new means of transportation for the public. Electricity also provided a brighter, cheaper, and safer illumination in factories, offices and homes. Third was the beginning of the application of science to industrial processes and for the creation of new and improved industrial products. To coordinate and monitor the flow of production and distribution of products in national and international market, the recruitment of salaried managers began.

The first entrepreneurs who made investments in manufacturing, marketing, and management dominated their industries,  in oil and  in steel. In American system of manufacturing the first entrepreneur create large enterprises in different areas. In office machinery: Remington in typewriters, Boroughs in adding machines, National Cash register in its industry and the International Business Machines in clocks and punch cards. In agricultural machinery, McCormick Harvester and International Harvester were prominent. In sewing machines, Singer dominated the American market. In packaging industries, we have Borden in canned milk and Heinz and Campbell in canned vegetables and soups and the American Tobacco Company in cigarettes. General electric and Westinghouse are the global leaders in electrical equipment. And in chemicals we have Du Pont, Dow, Monsanto, Union Carbide and Allied Chemical.

The most important technological innovations in the Second Industrial Revolution would have been the computer. Computer has brought many changes in workplace and work force. International Business Machines (IBM) made massive investments in production, distribution, and management in computer industry. Other founders followed and developed new types of computer.

 

SUMMARY

Industrial Revolution is probably one of the most remarkable happenings in the past. Others considered this a blessing to humanity. This era had brought great change in man’s life. During this time hand labor was replace by machine work. . (1977) described the term Industrial Revolution as a profound economic transformations resulting from the introduction of new technologies of production. (1948) characterized the Industrial Revolution in the following: (a) the mechanization of agriculture and industry; (b) the use of power in industry; (c) the development of factory system; (d) a sensational development of transportation and communication; (e) an increase in big business control economy. The economy during the Industrial Revolution dramatically transformed from agriculture based to industrial production. The larger-scale production had brought about the creation of marketing channel that will facilitate the distribution of goods to meet effectively the demand from the larger market. When the production became larger and geographically concentrated, people carried out in building mills or factories. The growth of the ‘factory system’ caused the migration of the population from the countryside to the new and rapidly expanding industrial towns.

The effect of the First Industrial Revolution in Great Britain has spread throughout the rest of the world. It has a significant impact on the economic life in America. However, the economic transformation began only a century later and marked the beginning of the Second Industrial Revolution.  In  (2006), the Second Industrial Revolution began around 1850. The Second Industrial Revolution was characterized by a gradual growth in chemical industries, petroleum refining and distribution, electrical industries and in the 20^th century, the automotive industries. The United States and Germany were the center of the Second Industrial Revolution.  The most important technological innovations in the Second Industrial Revolution would have been the computer. Computer has brought many changes in workplace and work force.

The transportation system also revolutionize upon the coming of the automobile industry. The history of the automobile begins with the technological breakthroughs that occurred in Europe during the early 1800’s and continues a century later with the pioneering efforts of American manufactures to begin mass-producing cars. In 1883, a German named  invented the first gasoline engine. Four years later in 1887, he attached it to a buggy. Thus, the automobile was born. The record shows 40% for Ford and 12% for General Motors. In 1920s, General Motors and Chrysler successfully succeeded Ford. The Big Three in the United States accounted 85 percent of the world’s output of automobiles. Subsidiaries of Ford and General Motors were responsible for the 15 % produced abroad.

In  (2006) reported that as of 2005 there are 500 million cars worldwide (0.074 per capita), of which 220 million are located in the United States (0.75 per capita).

 

 

 

 

REFERENCES

 

 

 

 

 

APPENDIX

 

Base on the  (2006) the following are the U. S Automobile Production figures.

Production Figures for 1899-1900	Production Figures for 1901
Columbia – 1500 Locomobile – 750 Winton – 100 Packard – 49 Stanley automobile – 30 Stearns – 20 Knox – 15 Oldsmobile – 11	Locomobile – 1500 Winton – 700 Oldsmobile – 425 White – 193 Autocar – 140 Knox – 100 Packard – 81 Stanley automobile – 80

 

 

 

 

 

Production Figures for 1910	Production Figures for 1920
Ford – 32,053 Buick – 30,525 Willys-Overland – 15,598 Studebaker/EMF – 15,020 Cadillac – 10,039 Maxwell – 10,000 Brush – 10,000 Reo – 6588	Ford – 806,040 Chevrolet – 146,243 Dodge – 141,000 Buick – 115,176 Willys-Overland – 105,025 Studebaker – 48,831 Hudson/Essex – 45,937 Chandler – 45,000

 

 

 

 

Production Figures for 1930	Production Figures for 1940
Ford – 1,140,710 Chevrolet – 640,980 Buick – 181,743 Studebaker – 123,215 Hudson/Essex – 113,898 Plymouth – 108,350 Dodge – 90,755 Chrysler – 77,881	Chevrolet – 764,616 Ford – 541,896 Plymouth – 430,208 Buick – 278,784 Dodge – 225,595 Pontiac – 217,001 Oldsmobile – 192,692 Studebaker – 107,185

 

 

 

 

 

 

 

 

Production Figures for 1950	Production Figures for 1960
Chevrolet – 1,498,590 Ford – 1,208,912 Plymouth – 610,954 Buick – 588,439 Pontiac – 446,429 Oldsmobile – 408,060 Dodge – 341,797 Studebaker – 320,884 Mercury – 293,658 Chrysler – 179,299 Nash – 171,782 DeSoto – 136,203 Hudson – 121,408 Cadillac – 103,857 Packard – 42,627 Lincoln – 28,190 Kaiser – 15,228 Crosley – 6,792 Frazer – 3,700	Chevrolet – 1,653,168 Ford – 1,439,370 Plymouth – 483,969 Rambler – 458,841 Pontiac – 396,716 Dodge – 367,804 Oldsmobile – 347,142 Mercury – 271,331 Buick – 253,807 Cadillac – 142,184 Studebaker – 120,465 Chrysler – 77,285 DeSoto – 26,081 Lincoln/Continental – 24,820 Imperial – 17,719 Metropolitan – 13,103 Edsel – 3,008 Checker – 1,050

Production Figures for 1970	Production Figures for 1980
Ford – 2,096,184 Chevrolet – 1,451,305 Plymouth – 747,508 Pontiac – 690,953 Buick – 666,501 Oldsmobile – 633,981 Dodge – 543,019 Mercury – 324,716 AMC – 242,664 Cadillac – 238,744 Chrysler – 180,777 Lincoln – 59,127 Imperial – 11,822 Checker – 397 Avanti II – 111 Excalibur – 37	Chevrolet – 2,288,745 Ford – 1,162,275 Oldsmobile – 910,306 Buick – 854,011 Pontiac – 770,100 Mercury – 347,711 Dodge – 308,638 Plymouth – 290,974 Cadillac – 230,028 AMC – 199,613 Chrysler – 164,510 Lincoln – 74,908 Avanti II – 168 Excalibur – 93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production Figures for 1990

Ford – 912,466 Chevrolet – 785,918 Pontiac – 641,820 Oldsmobile – 489,492 Buick – 426,512 Dodge – 366,330 Cadillac – 268,850 Mercury – 242,637 Lincoln – 233,730 Plymouth – 206,289 Chrysler – 1,874,267