Henry Ford started building cars on his own, and eventually became so good at it that he was able to achieve what your Production Management 102 textbook might have called vertical integration, which essentially means controlling the entire manufacturing process from raw materials to finished product. The Old Man controlled iron mines in Minnesota, forests for his auto body components in upper Michigan and rubber plantations in South America. He pioneered the widespread use of vanadium steel in auto manufacturing and was making a serious stab at developing car components from vegetable products when he slid into dementia. Before then, he envisioned and erected the sprawling Rouge Complex in Dearborn, where ore and coal were loaded into one end of the plant and completed Model Ts drove out the other. It’s still hammering out new Fords today.
Capital investment on a scale massive enough to build something like the Rouge from scratch seldom happens anymore, because the risk is too daunting for most investors to easily handle, but a century later, Ford intends to remake the business of building cars on a level unseen in our lifetimes. Ford and its technology partner, SK Innovation of South Korea, will invest up to $11.8 billion to build a Rouge-proportion assembly center dedicated to electric vehicles in Stanton, Tennessee, not far from Memphis, and two new factories in Kentucky where SK Innovation energy-storage hardware for use in Ford vehicles will be produced. The Blue Oval City complex in Tennessee, and the Kentucky operations, are expected to employ 11,000, including 6,000 entirely new jobs, and to roll out its first vehicle – the electric F-150 – by 2025. The artist’s rendering shows the scope of Blue Oval City, which will rise on six square miles and represent the largest and most efficient factory Ford has opened in its 118 years. It’s tough not to be impressed.