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View Full Version : Cost of acquiring the Continental Division.



Barry Wolk
09-23-2021, 12:30 PM
As we all know, the fledgling Continental Division started off as the Special Products Division of Ford Motor Company developed at the Ford Trade School, just Northeast of the Glass House. When Continental moved into their new plant the new Special Products Division destined to become the Edsel Division moved into the Ford Trade School on Continental's coattails. Fittingly, on the demise of the Continental Division and dispersal of all Continental staff to other Divisions, Edsel Division moved into Continental's headquarters in November of 1956. The Division did not live on to have anything to do with the trim-bin Continental for 1958.

I only sold my services in lighting maintenance to large Corporations. I counted Ford Land a customer for many years. I serviced all of their real estate holdings, except the plants. They were easy to deal with if you did things their way. I never understood many of the things they did, and I have no formal eduction in the way Corporate America works, so I would appreciate a thorough explanation of this letter.

How/why does a company buy something it already owns?

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While you're at it, explain how the billing of cars to Ford dealerships worked in 1956. I've been told that the assembly plant, or Division, was credited a dollar amount on its ledger for vehicles it shipped. It appears that dealers were billed for ordered cars by Ford Financial. They would collect what the dealer paid for the car at dealer pricing, leaving room for profit at the MSRP. My question is, was the dealer billed when the car was shipped, or when it was received? What a mess if a car like mine never showed up.

This interests me because of the letter I found in WCF's files. There was no response, that I found. I assume that once the Continental Division was paid WCF pretty-much didn't care what happened to the cars. 1248 is completely wiped clean from the record. Its Production Order in not in the files at the BFRC. It's just a WAG, but I would imagine that with the dash fire in the area of the ammeter, it would have been pretty smelly. I think the Chicago office of Continental allowed that car to cannibalized for its mechanical bits, which were in very short supply. The notes about rough running on some cars was spoken of by Elmer Rohn as leaving the problems for the skilled mechanics at the dealer's to resolve. The myth that the assembly workers were highly skilled assembly workers had no relation to their skills as mechanics. Totally different skill-sets and training. The problems were always left for the dealer and paid for by warranty claims.

1120 is a mystery, only in that the owner doesn't wish to share any information about the car. H&E said they made two convertibles, side by side. I think that the other convertible is not 1120, as it seems there were enough damaged cars that it could have been any other black car. 1126 is our car, as H & E said they made 2 for Ford Marketing, based in Chicago. How would Ford have kept track of stray inventory?

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Mark Norris
09-23-2021, 05:41 PM
How/why does a company buy something it already owns?



I worked as an engineer for a vary large oil corporation all my 35 year career in the business. It acquired many other companies and product lines over the years until it became a massive company with 130,000 employees operating in 65 countries all around the world.

The problem is knowing what parts of the company are making profit and sustaining that while also knowing which parts are making a loss and either improving them or getting rid of them (euphemistically known as "divesting" in the boardroom). So to do that you need to section up the corporation into divisions that each have their assets, cash and liabilities and have a proper balance sheet for each (which is why the bean counting accounts are an important element ...though as we always used to say if you want to grow a company and make money put and engineer in charge, if you want weather a slump and save money put an account in charge ..each have their moment). Naturally this can lead to all sorts of creative accountancy through cross-charges etc. to make one division look good (not unusual, maybe they are looking to sell it or give the share holders/market some good news, maybe its being protected from a temporary setback) or another look bad (eg. by "exporting profits" to reduce taxes ..some international companies have this down to a fine art). Anyway if a division is being closed then its assets/cash/debts (more likely) etc. have to go somewhere and the receiving division(s) have to pay for them and show the costs and asset depreciation on their balance sheet. Every dollar has to be traceable and accounted for and is part of the requirements for a publicly trade company (though more so these days than in the 1950s)

Pat Marshall
09-24-2021, 06:48 AM
I went through several mergers, which were referred to "Mergers of Equals" and in each case one side was always more equal than the other. Twice I was on the more equal side, the last one...not so much! (the merger of Dart Industries, a conglomerate and Kraft Foods, a chessy company:) ).

Your comments about the engineers and accountants are interesting. My experience regarding accountants is similar, they were really great in di-vesting unprofitable operations. Engineers were excellent in enhancing business segments, but were thought to lack longer term strategic vision. However the companies I was associated with were consumer marketing related, not high-tech operations where engineers play highly prominent roles.

In my experience the Marketing guys seemed to win out.

One thing for sure is that organizations don't need two corporate headquarters staffs, and that's an immediate cash savings for companies who are merging internal divisions or acquiring new operations. The less-equal staff is always the loser.