Ford Motor Company in Cadiz 1929-1923

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Manufacturing Engineering Society International Conference 2017, MESIC 2017, 28-30 June
Manufacturing Engineering Society
2017, International Conference
Vigo (Pontevedra), Spain2017, MESIC 2017, 28-30 June
2017, Vigo (Pontevedra), Spain
Ford Motor Company in Cadiz 1929-1923
Ford Motor
Manufacturing Engineering Company
Society Internationalin Cadiz 1929-1923
Conference 2017, MESIC 2017, 28-30 June
2017, Vigo (Pontevedra), Spain
S. González-Crespo , J. M. Vazquezb,*
a
S. González-Crespoa, J. M. Vazquezb,*
Costing models for capacity optimization in Industry 4.0: Trade-off
TEYP Ingeniería S.L. – SURIMEX Aeronáutica. C/ Ciudad de San Roque 208, Pol. Ind. Zona Franca, Cadiz E-11011, Spain
a
a
TEYP
b Ingeniería S.L. – SURIMEX Aeronáutica. C/ Ciudad de San Roque 208, Pol. Ind. Zona Franca, Cadiz E-11011, Spain
Mech. & Ind. Design Dept. University of Cadiz. Av. Universidad de Cadiz 10, Puerto Real (Cadiz) E-11519, Spain

between used capacity and operational efficiency


Mech. & Ind. Design Dept. University of Cadiz. Av. Universidad de Cadiz 10, Puerto Real (Cadiz) E-11519, Spain
b

Abstract
Abstract
A. Santanaa, P. Afonsoa,*, A. Zaninb, R. Wernkeb
The history of the automobile, is directly a
associated
University with the
of Minho, history
4800-058 of the first
Guimarães, mass manufacturer of vehicles, Ford Motor
Portugal
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89809-000history of the
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of of vehicles,
and the introduction Ford Motor
of technological
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of manufacturing focusedtheonrapid
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of the productionaround
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the introduction
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work, a
advances in the review
bibliographical field ofofmanufacturing has favored
the most interesting theinrapid
aspects expansion of
the installation theevolution
and companyofaround theFord
the first world. In theinpresent
factory work, a
Cadiz (Spain),
bibliographical review of the most interesting aspects in the installation and evolution of the first Ford factory
was carried out. In addition, the main car models and manufacturing procedures are described that were developed in this location. in Cadiz (Spain),
Abstract
was
© carried
2017 Theout. In addition,
Authors. the main
Published car models
by Elsevier B.V.and manufacturing procedures are described that were developed in this location.
© 2017 The Authors.
Peer-review under Published by
responsibility of Elsevier
the B.V. committee of the Manufacturing Engineering Society International Conference
scientific
© 2017 the
Under The Authors.
Peer-review concept
under Published
responsibilityby
of "IndustryofElsevier
the4.0", B.V.
production
scientific committee processes will be pushed
of the Manufacturing to beSociety
Engineering increasingly interconnected,
International Conference
2017.
Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017.
information
2017. based on a real time basis and, necessarily, much more efficient. In this context, capacity optimization
goes beyond
Keywords: Fordthe traditional
Model aim
T; Fordism; of capacity
Mobile assembly maximization, contributing also for organization’s profitability and value.
line; Expansionism.
Keywords:lean
Indeed, Ford Model T; Fordism;and
management Mobile assembly line;
continuous Expansionism. approaches suggest capacity optimization instead of
improvement
maximization. The study of capacity optimization and costing models is an important research topic that deserves
1. Introduction
contributions from both the practical and theoretical perspectives. This paper presents and discusses a mathematical
1. Introduction
model for capacity management based on different costing models (ABC and TDABC). A generic model has been
In the first
developed and itdecades
was used oftothe twentieth
analyze century, and
idle capacity a significant expansiontowards
to design strategies of the the
emerging industryofin
maximization the world is
organization’s
In the first
produced, decades of the twentiethincentury, a of
significant expansion oftothea emerging industry in the world is
value. The taking a special
trade-off capacityrelevance
maximization thevsfield automotive.
operational Thanks
efficiency growing
is highlighted and ittechnological
is shown thatrevolution,
capacity
produced, taking a
automobile manufacturing special relevance
is positioned in the field of automotive. Thanks to a growing technological
as one of the most innovative industries of the epoch. In this aspect, Ford revolution,
optimization might hide operational inefficiency.
automobile
Motor
© 2017 Companymanufacturing
The Authors. located is
is Published atbypositioned
the as oneexpansionism.
top ofB.V.
Elsevier world of the most innovative industries
In the present work, aofcompilation
the epoch. and
In this aspect,ofFord
exposure the
Motor Company
implementation
Peer-review is located
under process at
of the
responsibility the top of
automotive
of the world expansionism.
industry has
scientific committee been
of the In the present work,
carried outEngineering
Manufacturing a compilation
through Ford Motor
Society and exposure
Company
International of the
in Cadiz,
Conference
implementation
2017. process
starting point of the of the automotive
development of the brandindustry has
in Spain. In been carried
addition, out through
a literature reviewFord Motorcarried
has been Company in allows
out that Cadiz,
starting point of the development of the brand in Spain. In addition, a literature review has been carried out that allows
Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency

1. Introduction
* Corresponding author. Tel.: +0-000-000-0000 ; fax: +0-000-000-0000 .
* Corresponding
E-mail address:author. Tel.: +0-000-000-0000 ; fax: +0-000-000-0000 .
[email protected]
The cost
E-mail of idle
address: capacity is a fundamental information for companies and their management of extreme importance
[email protected]
in modern©production
2351-9789 systems.
2017 The Authors. In general,
Published it isB.V.
by Elsevier defined as unused capacity or production potential and can be measured
in several©under
2351-9789
Peer-review ways: tons of production,
2017responsibility
The Authors. Published
of available
by Elsevier
the scientific B.V.hours
committee of manufacturing,
of the Manufacturing etc.Society
Engineering The International
management of the 2017.
Conference idle capacity
Peer-review underTel.:
* Paulo Afonso. responsibility
+351 253of the761;
510 scientific committee
fax: +351 253 604of741
the Manufacturing Engineering Society International Conference 2017.
E-mail address: [email protected]

2351-9789 © 2017 The Authors. Published by Elsevier B.V.


Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017.
2351-9789 © 2017 The Authors. Published by Elsevier B.V.
Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017.
10.1016/j.promfg.2017.09.150
1398 S. González-Crespo et al. / Procedia Manufacturing 13 (2017) 1397–1404
2 S. González-Crespo / Procedia Manufacturing 00 (2017) 000–000

the exposition of the most important features of Ford's initial models (Ford Model T) and the evolution and expansion
of the main productive processes [1-6].

2. Ford Model T

One of the most representative models of the brand, Model T of Ford Motor Company [1,2], Fig.1, began its
commercialization on October 1, 1908, maintaining the manufacture of this model for approximately 19 years.

a) b)

Fig. 1. a) Pictography of the Ford T; b) Ford Model T.

This model was called "The Universal Automobile", and was developed at the Piquett Avenue factory in Detroit.
In the beginning, the first car model has a market price of $ 825, a price that would be reduced to $ 260 thanks to
technological advances during the manufacturing period. It is estimated that total production of Ford Model T vehicles
exceeded 15 million units between 1908 and 1928. These events resulted in the selection of the Ford first model as
the automobile of the century among a set of 700 cars [1,2]. The selection was carried out by a committee of experts
made up of 133 members. In this respect, Henry Ford was in turn appointed as entrepreneur of the century. Dick
Holzman as president of the committee of experts in the car of the century selection, makes the following statement:

“Retrospectively, the twentieth century can be considered the century of the automobile, a real revolution in
technology and quality of life”

It is possible to confirm that Ford Motor Company is one of the main drivers of the technological revolution, from
the point of view of manufacturer and leader of the automotive industry, contributing great advances and positioning
the automobile sector in the highest industrial development of the twentieth century.

3. Beginnings of Ford Motor Company

The establishment of Ford Motor Company took place in 1903, Henry Ford together with 11 investors, and with
an initial investment estimated at $ 28,000, begins the manufacture of competition cars with the model 999, Fig. 2.
This model, used by the racing driver Barney Oldfield, was employed as the image of the company across the United
States, thus increasing the popularity of the brand. Among the most outstanding features of the company's first vehicle,
the maximum speed registered at 130 km/h is shown, setting a new American record.
After the 999 racing competition car, the first models coming from the Ford company were model A (1903-1904),
a two-seater model from which 1750 units were manufactured. The Ford A, was replaced by model C in 1904,
maintaining a coexistence in the manufacture. These models are replaced by the Ford B model (1905) and later by the
Ford K model.
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Fig. 2. 999 Racing car model.

In this way, the experience acquired by Ford in the development of its first models, between 1903 and 1907,
provides valuable information about the preferences and demands of the market (size, prices, qualities, etc.) with the
objective of improving competitiveness against other manufacturers. In turn, this knowledge results in a decrease of
incidents in manufacturing and progressive improvements of the product. These improvements applied to the
manufacturing processes have their response in a wide range of processes, giving rise to a constant evolution towards
the optimization of aspects such as subcontracting, availability of parts and final products, assembly, time control,
increased profitability, and sales network.

4. Evolution of production system: Mobile assembly chain

Due to a significant increase in demand, driven by improvements in manufacturing processes, the first chain
assembly line was designed and put into operation in 1913, Fig. 3, resulting in a revolution in existing manufacturing
systems.

Fig. 3. Mobile assembly line. Fig. 4. Mobile assembly line with supply parts.

The chain assembly line consisted of a mounting system running along a chain carrying the chassis and the front
and rear axes as the first set, then the motor-transmission unit was assembled, with radiator, fire panel, gas tank,
mudguard, bodywork (different level), headlights, etc, Fig. 4. All this work was done by specialized operators in
elementary assembly operations and with the supply of elements of each stages of the chain, with the aim of reducing
assembly times.
This type of manufacturing reduces assembly time from 12,5 hours/man to 1,5 hours/man. The assembly time of
the vehicle is reduced in the ratio of 8,3 to 1 with respect to the traditional assembly systems. In this way, a remarkable
fact can be observed, in 1914 Ford Motor Company with 13.000 employees produced 300.000 units, while the
remaining 299 manufacturers with 66.350 employees produced 280.000 units. That is, the traditional production is
equal to the fifth part of operators. That is, traditional production is equalized using the fifth part of operators.
The benefits and advantages of production are transformed and incorporated into wage improvements, and in 1914
the 8-hour workday is implemented in a week of 5 working days. The improvement in salaries is set at $ 5 per day,
compared to $ 2,34 previously received.
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5. Technical specifications of Ford Model T

Ford Model T mounted an in-line four-cylinder engine with a displacement of 2.998 cm3, and ignition order 1-2-
4-3. These cylinders had piston diameter of 95,25 mm, with a stroke of 101,6 mm. This engine develops a power of
22 H.P. resulting in a maximum speed of 70 km/h. The estimated consumption could vary between 11,1 and 18,0
l/100 km. For the transmission, it was based on satellites and planetary gears and outer collar with 23 clutch discs.
Only rear wheel brakes were available. The wheels were 21" of walnut rim [6-8].
The steering was composed of an angular arm with satellite reduction under the steering wheel. The ignition system
consists of a 6-volt magnetic steering wheel mounting on independent coils per cylinder. For the starting system, crank
was available until 1921. Finally, chassis was built in vanadium steel, produced by Ford factories [1,2], Fig. 5.

Fig. 5. Ford Model T part scheme.

6. The Fordism and expansionism

6.1. Fordism characteristics

The application of Taylor techniques developed at the end of the nineteenth century with the scientific organization
of work, production control, rigorous allocation of time and standardization, allows Ford a significant increase in
production, obtaining a high rate of profit. This new philosophy of management aimed at production increasing is
known as "Fordism." In this aspect, the main characteristics of Fordism are:
It is based on the advantages and benefits of production; Fordism increases the living conditions of workers.
Improvement in working conditions with advantages in the working day to 8 hours daily.
Introduce improvements in weekly working time, passing to 5 days with the same salary as the week of 6 days.
Concern about the living conditions of workers. A committee is created for the improvement of housing, personal
hygiene, etc.
Creation of a sales network of technical assistance. Simplification in orders with telegraphic keys for part numbers.
Benefit to the buyer of the product with discounts in the sales prices. Evolution of $ 825 per vehicle at the beginning
of production to $ 260 at the end of production.
Boosting the growth of the supplier industry. A clear example is in England, Trafford Park, Manchester, where the
first car is manufactured in 1911 assembled with 100% pieces from the USA, and 4 years later British cars are
manufactured with 94% of parts manufactured in England.
The application of quality assurance standards has been advancing almost 50 years. Concepts such as continuous
improvement and total quality are used in production. In 1912 a market study was carried out to consult customers on
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why they had purchased their T Model and customers gave their opinion about the problems detected in their vehicles,
this helped to improve the system design and introduce improvements in manufacturing.

6.2. Global expansionism

As far as expansionism is concerned, it can be observed that since 1913, and because of the increased production
and lower costs implanted throughout the USA, Henry Ford proposes expansion to other countries. Thus in 1911 the
first Ford T is marketed in Trafford Park, Manchester, in England. From 1911 to 1927 a total production of 300.000
units was obtained. The car was sold at a price of 135 pounds in the UK.
The initial expansion of Ford occurs sequentially, and takes place in England (1911), Paris, France (1913), Buenos
Aires, Argentina (1916), Denmark (1919), Brazil, Uruguay and Spain in Cadiz (1919), Belgium and Italy (1922) and
Ireland (1923).

7. Ford Motor Company in Cadiz

For the manufacture of the first model in Spain, pieces from the USA are used, making assembly in Cádiz, in a free
warehouse of Segunda Aguada, between 1919 and 1923 [3,4]. The idea is that as in other countries the local industry
will be incorporated into the production of components [3].
In the case of the selection of the most suitable place for the installation of manufacturing industry in Spain Mr.
William Knudsen, director of exterior relations area of Ford Motor Company is sent out informing favorably that the
most advantageous areas for the installation are Barcelona and Cadiz by their disposition of Ports with convenient
communications with the US. Knudsen's forecast for the Cadiz plant is estimated at 2.000 units in the first year and
5.000 in the second year.
In "El Noticiero Gaditano", a local newspaper, a telegram of the Ministry of Finance is collected on the installation
of the Ford Motor Company in Cadiz [5], Fig.6.

Fig. 6. News published in "El Noticiero Gaditano" newspaper.

On November 11, 1919, Diario de Cádiz [4], a local newspaper, published the news of the implantation in Cadiz
of Ford Motor Company, covered by Royal Order of November 6, 1919, in a communication made by Mr. Bugallal,
General Director of Customs.
The concession of activity is established as a free warehouse in which the goods entering it as parts of vehicles will
not be affected by any customs regime. From here the parts can be shipped anywhere in the world on a transit system.
As recognized by the Customs Director, this is a very advantageous practice for the public treasury. The regulations
are authorized by Royal Decree of October 22, 1919. The warehouses originally came from a beer factory belonging
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to the industrial entrepreneur D. Emilio Freire, Fig. 7 and Fig. 8, the location was very close to the railway station of
Segunda Aguada, facilitating the shipment of assembled vehicles to concessionaires throughout Spain.

Fig. 7. Warehouse of Ford Motor Company in Segunda Aguada, Cadiz, 1919. Fig. 8. Ford Motor Company headquarter in Segunda
Aguada, Cadiz.

On June 2, 1920, the incorporation of the new company Ford Motor Company SA established on March 26, 1920,
was filed in public deed in Madrid. Mr. Arthur H. Lloyd Davies is appointed as director in Cadiz from a position of
similar responsibility in Argentina. The remodeling and adaptation of the buildings begins on December 13, 1919 and
takes place within 4 months and costs 187.400 pesetas.

8. The first cars manufactured in Cadiz

On April 5, 1920, the first Ford car manufactured in Cadiz leaves the assembly plants. In 1920, the first year of
manufacture in Cadiz, assembled 3,446 units surpassing the expectations set by Knudsen of 2,000 even more despite
the fact that a full year of production was not carried out, being restricted to the period from April to December. Parts
are sent from United States in boxes forming sets, which are assembled in Cadiz. For the assembly process, a small
mobile assembly chain is installed. At this location, Fordson tractors are being sold, although these were already
assembled from the US. It is estimated that the tractor units sold are approximately 200. However, between 1920 and
1922, several car models and other vehicle elements were manufactured in Cadiz, as shown in Table 1 [3].
With regard to workers the number of employees at the end of 1920 was 300 workers. Salary could vary between
12 to 15 pesetas per day depending on the position held in the manufacturing process. In contrast, in the field of
agriculture the working day was 12 hours and the salary of 5 pesetas.
It is noteworthy to indicate the incorporation of Spanish source material production amounting to 320.722,17
pesetas in 1920.
On the other hand, technology and advanced manufacturing processes, such as assembly lines, available from the
factory, allowed to reduce the spent time per vehicle, Fig. 9 to 11.

Table 1. Ford Motor Company models manufactured in Cadiz.


Year Manufactured Model Price (Pesetas)
Double phaeton 4/5 doors without starter 5.150
Double phaeton 4/5 doors with starter 5.600
1920
1 Ton Chassis Truck 5.250
Fordson Tractor 18/20 HP 8.350
Passenger car without starter 3.575
Passenger car with starter 3.910
Coupe 5.340
1922
Sedan 6.175
Truck with starter 3.730
Fordson tractor 4.260
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13 (2017) 1397–1404 14037

Fig. 9. Ford central warehouse in Cadiz. Mobile assembly chain is observed.

a) b)
Fig. 10. a) The beginning of the chain. Chassis with front and rear wheels; b) Assembly of bodyworks (Tourer type).

a) b)
Fig. 11. a) Upholstery assembly line; b) Vehicles for verification and quality control.

9. Production chronology

A production rate of 3446 vehicles assembled was in Cadiz in 1920, however, on December 31, 1920, the minister
of finance sent a telegram to the president of the Cadiz workers union, where denied the claim of protection of the
procedures by which Ford Motor Company had been established in Cadiz.
On February 3, 1921, workers of the Cadiz factory thanked Director Mr. Davies for the annual salary bonus for the
production, which could reach in some cases from 100 to 375 pesetas according to categories.
On January 18, 1921, an interview was published in Diario de Cádiz [6] with Deputy Gualberto Pemán about the
meeting with the President of the Council of Ministers Mr. Eduardo Dato and with the Minister of Finance. The main
objective was to support the company Ford in Cadiz and the numerous customs problems that were taking place. In
the meeting between Mr. Eduardo Dato, President of Ministers Council and the finance minister, the difficulties and
lack of maintenance in the rights granted to ford in the Cadiz free warehouses was commented, as indicated in an
article of the local newspaper, Diario de Cadiz, on 18 January 1921.
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From Ford Motor Company, the maintenance of the agreement is requested to have a 3 months term for debit with
the designated agency. In this regard, it is indicated that the company does not obtain any benefit in the vehicles
imported from the free warehouse of Cádiz, with respect to units imported directly from the US. Ford also argues that
maintaining agreements, resulting unilaterally in the generation of wealth and employment for Cadiz.
The response of Domínguez Pascual, Minister of Finance, to the committee of deputies for Cadiz (composed of,
among others, senator Miguel Primo de Rivera, Cádiz deputy Juan Lazaga, Manuel Moreno Quesada from El Puerto
de Santa Maria and Medina Sidonia deputy Serafín Romero) is based on the request to have 4 to 6 days in order to
study the problem more closely. The minister does not respond to representatives from Cadiz. Despite the support of
Eduardo Dato, no reply is received and it is the successive events that are going to precipitate the departure of Ford
Motor Company from Cadiz. In 1922, due to breaches of the administrative concession and agreed conditions of the
ministry of finance, Ford Motor Company requests the termination of conditions of free warehouse. It is also requested
that the factory be considered for customs purposes within the national territory, which is granted by Royal Order of
March 21, 1922. The consequences can be observed in the decrease in production, reducing by 30 cars daily in 1920
to an average of 15 vehicles in 1921 and thus kept lower in 1922, although there are no official data for these two
years.
In the year 1923 Ford Motor Company ceases the production in the factory of Cadiz. Once the production in Cadiz
is finished, Ford Motor Company receives offers for the installation in Casablanca (Morocco). On February 16, 1923,
a letter was published in the newspaper "Noticiero Gaditano" lamenting the lost of Ford Motor Company from Cadiz.

10. Causes of manufacturing cessation in Cadiz by Ford

The closure of the company in the location of Cadiz, after a few years of satisfactory production, can be related to
several causes. The main causes of business cessation are among others the breach of agreements by the Ministry of
Finance. Another cause may be the high customs rates, up to 25%. compensate the assembly activity against the import
of the assembled unit is impossible, this fact is due to lower production prices in the US production where the mass
production made it more profitable.
Low investment in facilities by Ford, facilitate the decision to change the location of the factories and the relocation
of production lines. An outstanding cause is found in the rare industrial field existing throughout Andalusia. This lack
does not allow the subcontracting of components, as opposed to English production (Trafford Pak, Manchester) in the
year 1911-1912 incorporating the mobile assembly line techniques. Is observed in this location that, four years later,
94% of the English Ford Model T parts were manufactured in England. In this way, the difficulty in the beginning
and development of an industry linked to the manufacture of components in Cadiz after the production closure and
relocation of Ford Motor Company can be related.
On the other hand, may be mentioned the decrease in the costs of shipping. This fact is favored by the growth of
the fleet after the first world war, where a decrease in maritime traffic is produced in 1919. The development of new
shipping lines and more efficient ships results in a reduction in the costs of assembled vehicles transporting.
Finally, pressures of Catalonia societies favoring the implantation in the free zone of Barcelona.

References

[1] B.W. McCallet, Model T Ford: The car that changed the world, Krause Publications, Iola WI, USA, 1994.
[2] Ford Motor Company, Manual Ford, Ford Motor Co. Publications, Spanish Version, Detroit, USA, 1920.
[3] M.M. Cordero, Historia de Ford en España 1919-1954. Ford Motor Company S.A.E. Cádiz, Ford España, Sevilla, Spain, 1998.
[4] Diario de Cádiz, Newspaper, Historical Archives, Date 11 november 1919, Cádiz, Spain.
[5] El Noticiero Gaditano, Newspaper, Province Library Historical Archives, Date 16 February 1923, Cádiz, Spain.
[6] Diario de Cádiz, Historical archives, Date 18 January 1921, Cádiz, Spain.
[7] Ford Motor Company, Catalogo Ilustrado de Repuestos Ford Modelo “T”, Ford Motor Co. Publications, Spanish Version, Detroit, USA, 1924.
[8] Model T Ford Club International (MTFCI). Available at: http://www.modelt.org, (2017, March).
[9] Model T Ford Club of America (MTFCA), Available at: http://www.mtfca.com, (2017, March).

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