AMERICAN AUTOMOBILE INDUSTRY: BEFORE AND AFTER THE INDUSTRIAL REVOLUTION
Category : American Automobile Industry, Flow Production Example, General Motors Case Studies, Industrial Revolution Examples, Management Samples
AMERICAN AUTOMOBILE INDUSTRY: BEFORE AND AFTER THE INDUSTRIAL REVOLUTION
INTRODUCTION
Many historians agreed that 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.
In the last decades of the 18th century, the First Industrial Revolution began in Great Britain. The discovery of the new sources of energy generated had made big contribution in the launching of the First Industrial Revolution. Machines for spinning thread and weaving cloth were increasingly driven by steam rather than waterpower. 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 Watt’s steam engine. Coal was used to make finished metal from iron ore. Countries with rich deposit of oil gave them better power to run machinery and better lighting. Later electricity superseded steam and oil as a source of power for industrial purposes. The mass production of goods and the use of interchangeable tools were the other important features of this revolution. The development of machine tools, and the discoveries and inventions of new system and gadgets made possible accuracy and efficiency in production. During this period suppliers produce goods in hundred of thousands compared dozens produced in the previous period.
ABSTRACT
Industrial Revolution is 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. The sensational development of transportation is one of the characteristics of Industrial Revolution. 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 Gottlieb Daimler invented the first gasoline engine. Daimler’s automobile aroused the interest of the pioneers in the automotive industry. The best-known pioneer was Henry Ford, who founded the Ford Motor Company in 1902.
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.
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 () 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 Cabot Lowell 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).
INDUSTRIAL REVOLUTION AND 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. In 1883, a German named Gottlieb Daimler invented the first gasoline engine. Four years later in 1887, he attached it to a buggy. Thus, the automobile was born. Rudolf Diesel invented in 1887 the diesel engine using crude. This engine is much cheaper compared to a machine powered by gasoline. Now this is used in automobiles, jeepneys, trucks, trains, ships, and factories. Charles Goodyear 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 Henry Ford, who founded the Ford Motor Company in 1902. Henry 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 20th 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, John D. Rockefeller in oil and Andrew Carnegie 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 20th 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 Gottlieb Daimler 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).
INDEX
Base on the (2006) the following are the U. S Automobile Production figures.
Production Figures for 1899-1900
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Production Figures for 1901 |
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Production Figures for 1910
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Production Figures for 1920 |
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Production Figures for 1930 |
Production Figures for 1940 |
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Production Figures for 1950 |
Production Figures for 1960
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Production Figures for 1970
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Production Figures for 1980 |
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Production Figures for 1990
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