Dodge V. Ford Motor Company 170 N. W. 668

Dodge v. Ford Motor Co. 170 N.W. 668 The Ford Motor Company is an American multinational automaker that was incorporated on June 16, 1903 by Henry Ford. In today’s world Ford is the second largest automaker in the U.S. and the fifth-largest in the world based on annual vehicle sales in 2010. Henry Ford became famous for his methods of large scale manufacturing, management and the use of the assembly lines in his factories. Another very important event in the history of Ford Motor Company, and also a very important case in legal terms, was Dodge v. Ford Motor Company, 170 N.W. 668, Michigan Supreme Court 1919. This case was very important to the legal system because it reinforced the idea that corporations are accountable to making a profit for the stockholders. On November 2, 1916, a day after his son Edsel’s wedding, Henry Ford received notice of a complaint that would eventually lead to one of the most famous lawsuits in the history of American corporate law (Henderson). The plaintiffs were John and Horace Dodge
At that time it was 60 percent of its capital stock of $2 million, but only around 1 percent of its total equity of $114 million. Between 1911 and 1915 Ford paid special dividends totaling $41 million. It was the policy of Ford Motor Company to reduce the selling price of its cars each year. Later in 1915, they increased production by constructing new plants worth $10 million, buying land for $3 million, and erecting an $11 million smelter. To finance these expenditures, Ford did not reduce the selling price. A year later, Ford’s board reduced the selling price of cars by $80 per car. Ford Motor Company was able to produce 600,000 cars annually, doing this they would forfeit $48 million by lowering the price by $80. At the same time the board decided not to pay a special dividend and would reinvest instead, however they did pay the regular dividend of $1.2