On this day 104 years ago, The Ford Motor Company first offered for sale its Model T motor car, at a price of $850. Henry Ford, who had started as an engineer with the Edison Illuminating Company, had started experimenting with self-propelled vehicles in the 1890s. In 1899 he had formed the unsuccessful Detroit Automobile Company, which dissolved just over a year later. After some success with a racing car which he had built, he formed the Henry Ford Company (which subsequently became the Cadillac Company) in 1901, then left it in 1902.
In 1903 the Ford Motor Company was formed, with the aim of creating inexpensive motor vehicles. The company became well known after a newly designed racing car set a world land speed record of 147 km/h. At the same time, Ford set to work on building cars that would be simple to drive and easy to repair, starting with the Model A, then the Model N, then the Model S. Finally, breakthrough success was achieved with the Model T.
Originally the Model T was hand-crafted in the same way as other makes of cars. To drive costs down and improve quality, Ford created a mass production system, which enabled large numbers of cars to be produced in a short time period. This enabled prices to decrease gradually from $850 in 1909 to $260 in the 1920s, while bringing in large revenue. By 1914, Ford was able to pay his employees double the going rates, resulting in high employee retention and high productivity.