Dinah Shore sang "See the USA /In your Chevrolet?America we're asking you to buy !"
Charles Brown
>>> "Henry C.K. Liu" <hliu at mindspring.com> 03/15/99 03:02PM >>>
I don't know if Henry Ford ever said that. But as a young consultant, I
personally heard Iaccoca say so in a meeting in 1968 that was attended by
Henry Ford II who very much appreciated the sentiment.
The context was a corporate review on the question whether Ford should go
into real estate development which in the late 60s had a higher discounted
rate of return (above 16%) on investment than manufacturing (6 - 9%),
including household appliances. The only other areas that were yielding
higher returns were space and military contracts which were expected to
have a declining grow rate in the long term. Several top manufacturing
executives at Ford, including the newly arrived Knudson from GM, were
arguing for staying with making cars because of the traditional company
culture, at which point Iaccoca made the statement: "We are not in the
business of making cars; we are in the business of making money."
The issue was further affected by the fact that, without realizing it,
Ford was already one of the biggest real estate developers in the country
for its own accounts, in factories, wharehouse and dealerships. The
decision was made to make real estate a separate profit center in its own
right instead of being just a cost item in serving manufacturing needs.
Also, by spinning off real estate, it actually forced maufacturing to use
real esate more efficiently because it would no longer be a subdidized
cost item.
Company insiders said that decision marked the ascendance of Iaccoca who
had risen through sales from the profitable Truck Division to be President
of North America Division over Knudson who was President and CEO under
Chairman Ford II. Knuson left to head White Motors a short time after
that.
Within 6 months, Chrysler also followed suite and went heavily into real
estate development, which some analysts have since suggested as a policy
that contributed to its eventual bankruptcy. Later, Iaccoca took over
Chrysler.
Henry
rc-am wrote:
> >I once heard that Henry Ford said he wasn't in business to make cars,
> but
> >to make money, Does anyone know if he really said this, and if so,
> where?
>
> and he made a shitload of money making cars that he convinced people
> they needed.
>
> he also was the first money maker - as far as i know - to have
> sociology dept.
>
> angela