MGMT 1030 Lecture Notes - Lecture 12: Walkerville, Ontario, List Of Auto Parts, Multinational Corporation

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20 Jul 2016
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Outline of Dimitry Anastakis, “From Independence to Integration: The Corporate
Evolution of the Ford Motor Company of Canada, 1904-2004”, Business History Review
78 (2) (2004): 213-253
Anastakis emphasizes three important points in the history of the Ford Motor
Company of Canada (FMCC): 1)FMCC’s exceptional status within the Ford
empire; 2)Ford-USA’s attempt to undercut Canadian independence; and
3)government policies that facilitated FMCC’s integration
FMCC was formed in 1904 by Gordon McGregor in the town of Walkerville,
Ontario, after McGregor had met Henry Ford and secured a deal that provided
FMCC access to Ford technology and product lines; by the 1920s, FMCC
employed 4,000 workers and produced more than 50,000 automobiles annually
Anastakis identifies four reasons for FMCC’s success by 1930
oHigh tariffs kept foreign-made cars out of the Canadian market, and
Imperial preferences within the British Empire allowed FMCC to sell cars
in countries like Australia
oFMCC was in a perfect location to take advantage of the nearby Ford-
USA operation in Detroit
oMcGregor had perfect timing in terms of securing his agreement with Ford
before Ford’s operations really took off in the 1910s
oMcGregor and Ford were kindred spirits and enjoyed good personal
relations
After Henry Ford’s death, Ford-USA wages a concerted campaign to secure
majority control of FMCC, and in 1948, the US parent firm owned more than
50% of the shares of FMCC for the first time; thereafter, FMCC lost all of its
former advantages and was forced to adhere to directives from Detroit
Ford-USA heavily supported the 1965 Auto Pact, which allowed Ford to
rationalize its North American operations; thereafter, only specific vehicle brands
and limited lines of auto parts were produced in Canada
FMCC generally prospered in the 1980s and 1990s before the company was
completely privatized in 2004
Anastakis identifies four key reasons for the importance of FMCC’s history
o“constant flux” of a multinational enterprise
oFMCC fortunes linked to broader political, economic, and corporate
changes
oAllows an assessment of long-term business strategy
oEmphasizes the changing international environment through the Auto Pact
(which was abrogated in 2001) and other trade pacts such as NAFTA
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