Alexander Y. Malcomson
Encyclopedia
Alexander Y. Malcomson was a coal dealer from Detroit, Michigan who bankrolled Henry Ford
's first successful foray into automobile manufacturing: the Ford Motor Company
.
, Ayreshire, Scotland and emigrated to Detroit at the age of 15, coming over with his widower father and staying with his uncle Joseph and family. He immediately began working in a grocery store, then went into business for himself after purchasing a small grocery. He soon switched to dealing in coal, eventually buying out several competitors and emerging as a major dealer, owning six coal yards by 1902. In addition to his coal yards, Malcomson invested in a variety of projects outside of the coal business. In 1895, Malcomson hired a young clerk, James Couzens (later mayor of Detroit and US Senator), to work at his firm.
Malcomson married Sarah J. Mickleborough in 1889 and had six children: Mary J., Helen J., Grace L., George W., Alexander Y., and Allan R. Malcomson. Sarah died ca.1902 and he then married Alice Schofield in 1903, a marriage which produced two daughters, Dorothy J. and Margaret A. Malcomson.
In 1902, with his involvement in the Henry Ford Company
coming to an end, Ford approached Malcomson to bankroll a new automotive company. Malcomson, although overextended with his other investments, was able to raise $3000 With this capital, Malcomson and Ford agreed to form a company, Ford & Malcomson, to develop a new automobile. Details of the partnership were written down and signed by each man, and witnessed by C. Harold Wills. With Malcomson's backing, Ford designed the Model A
, an inexpensive car designed to be sold for $750. In 1903, the firm moved to a new building on Mack avenue, and soon Ford and Malcomson ("doing business as the Ford Motor Company") agreed to purchase over $160,000 in parts from John
and Horace Dodge
; additional purchases for smaller amounts were made from numerous suppliers.
However, the young firm quickly had trouble making payments to the Dodge brothers due to slow sales. Malcomson turned to John S. Gray
, president of Detroit's German-American bank. Gray agreed to invest $10,500 in the automobile firm. Malcomson also convinced his young clerk, James J. Couzens
, to invest, as well as the law partners John W. Anderson and Horace Rackham
; in all, Malcomson brought a total of $28000 cash to the company. On June 16, 1903, Ford and Malcomson was officially re-incorporated as Ford Motor Co., with Gray as president and Ford as vice-president. Ford and Malcomson each owned 255 shares of the company (25.5% apiece), while Gray, Rackham, Anderson, Couzens, and other investors received shares proportional to their investment. The Dodge brothers each received 10% of the shares in the new company in return for materials provided.
Both Malcomson and Gray had larger businesses to run than Ford Motor Co. To keep Henry Ford in check, Malcomson installed his clerk James Couzens (also a shareholder) at Ford Motor in a full-time position. In any case, the company was an immediate success. Earnings in the first six months were over $100,000, and the company declared a 100% stock dividend; in the first year, the company made over $250,000 profit. Malcomson wanted to increase profits, and, believing luxury cars were the most attractive sector of the automobile market, directed Ford to design and build the larger and more expensive Model B
and Model K
. Ford was reluctant, but Malcomson was backed by his majority coalition on the Board, and Ford capitulated.
to produce luxury automobiles. However, other board members at Ford became upset, because the Aerocar would compete directly with the Model K. They demanded Malcomson give up his shares in Ford. Malcomson refused. However, Henry Ford was still upset at being dictated to by Malcomson. With Couzens's help, and without Malcomson's involvement, Ford established the Ford Manufacturing Company, explicitly to make parts for Ford Motor. Ford Manufacturing charged Ford Motor inflated prices, shifting the profits to Ford Manufacturing and leaving Ford Motor profitless. Malcomson, recognizing that he had been outmaneuvered, sold his stock in Ford Motor to Henry Ford in 1906 for $175,000.
Malcomson plowed his profit from the sale of Ford stock back into Aerocar,building a factory and producing the Aerocar Model D and Model F. However, the cars were not very popular, and Aerocar went broke in 1908. He sold his factory to Hudson Motor Car and returned to the coal business, still owing money to his creditors.
However, Malcomson dove back into business, running his coal supply business. In 1913, he formed Malcomson and Houghten, a distributor of coal, coke, and building supplies. By his death, he had amassed an estimated $2,000,000, and his insurance policy of $633,250 was the fifth largest paid in that year.
Alexander Malcomson died in Ann Arbor, Michigan
in August of 1923, at age 59, after a long illness.
Henry Ford
Henry Ford was an American industrialist, the founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production. His introduction of the Model T automobile revolutionized transportation and American industry...
's first successful foray into automobile manufacturing: the Ford Motor Company
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
.
Early life
Alexander Young Malcomson was born June 15, 1865, in DalryDalry
Dalry is the name of several places in Scotland:* Dalry, North Ayrshire* Dalry, Edinburgh* St. John's Town of Dalry You may also be looking for Dalrigh or the Battle of Dalrigh...
, Ayreshire, Scotland and emigrated to Detroit at the age of 15, coming over with his widower father and staying with his uncle Joseph and family. He immediately began working in a grocery store, then went into business for himself after purchasing a small grocery. He soon switched to dealing in coal, eventually buying out several competitors and emerging as a major dealer, owning six coal yards by 1902. In addition to his coal yards, Malcomson invested in a variety of projects outside of the coal business. In 1895, Malcomson hired a young clerk, James Couzens (later mayor of Detroit and US Senator), to work at his firm.
Malcomson married Sarah J. Mickleborough in 1889 and had six children: Mary J., Helen J., Grace L., George W., Alexander Y., and Allan R. Malcomson. Sarah died ca.1902 and he then married Alice Schofield in 1903, a marriage which produced two daughters, Dorothy J. and Margaret A. Malcomson.
Henry Ford
Malcomson knew Henry Ford when the latter had worked at the Detroit Edison Co.Detroit Edison
The Detroit Edison Company, founded in 1903, is an investor-owned electric utility which serves most of Southeast Michigan. Its parent company, DTE Energy , provides energy services to a variety of clients beyond Detroit Edison's service area.- History :...
In 1902, with his involvement in the Henry Ford Company
Henry Ford Company
The Henry Ford Company was the second company for Henry Ford, founded November 3, 1901. It resulted from the reorganization of the Detroit Automobile Company, his first unsuccessful attempt at automobile manufacture a year before. In March 1902, Ford left the company following a dispute with his...
coming to an end, Ford approached Malcomson to bankroll a new automotive company. Malcomson, although overextended with his other investments, was able to raise $3000 With this capital, Malcomson and Ford agreed to form a company, Ford & Malcomson, to develop a new automobile. Details of the partnership were written down and signed by each man, and witnessed by C. Harold Wills. With Malcomson's backing, Ford designed the Model A
Ford Model A (1903)
The original Ford Model A is the first car produced by Ford Motor Company, beginning production in 1903. Ernst Pfenning of Chicago, Illinois became the first owner of a Model A on July 23, 1903. 1,750 cars were made from 1903 through 1904...
, an inexpensive car designed to be sold for $750. In 1903, the firm moved to a new building on Mack avenue, and soon Ford and Malcomson ("doing business as the Ford Motor Company") agreed to purchase over $160,000 in parts from John
John Francis Dodge
John Francis Dodge was an American automobile manufacturing pioneer and co-founder of Dodge Brothers Company.-Biography:...
and Horace Dodge
Horace Elgin Dodge
Horace Elgin Dodge, Sr. was an American automobile manufacturing pioneer and co-founder of Dodge Brothers Company.-Early years and business:...
; additional purchases for smaller amounts were made from numerous suppliers.
However, the young firm quickly had trouble making payments to the Dodge brothers due to slow sales. Malcomson turned to John S. Gray
John S. Gray (Michigan)
John Simpson Gray was a candymaker, business man, and banker from Detroit. He was also an original investor in the Ford Motor Company.-Early life:...
, president of Detroit's German-American bank. Gray agreed to invest $10,500 in the automobile firm. Malcomson also convinced his young clerk, James J. Couzens
James J. Couzens
James J. Couzens was a U.S. Senator from the state of Michigan, the Mayor of Detroit, an industrialist, and philanthropist.-Early life and career:...
, to invest, as well as the law partners John W. Anderson and Horace Rackham
Horace Rackham
Horace H. Rackham was one of the original stockholders in the Ford Motor Company and a noted philanthropist.- Early Life and Ford :...
; in all, Malcomson brought a total of $28000 cash to the company. On June 16, 1903, Ford and Malcomson was officially re-incorporated as Ford Motor Co., with Gray as president and Ford as vice-president. Ford and Malcomson each owned 255 shares of the company (25.5% apiece), while Gray, Rackham, Anderson, Couzens, and other investors received shares proportional to their investment. The Dodge brothers each received 10% of the shares in the new company in return for materials provided.
Both Malcomson and Gray had larger businesses to run than Ford Motor Co. To keep Henry Ford in check, Malcomson installed his clerk James Couzens (also a shareholder) at Ford Motor in a full-time position. In any case, the company was an immediate success. Earnings in the first six months were over $100,000, and the company declared a 100% stock dividend; in the first year, the company made over $250,000 profit. Malcomson wanted to increase profits, and, believing luxury cars were the most attractive sector of the automobile market, directed Ford to design and build the larger and more expensive Model B
Ford Model B (1904)
See also Ford Model B Ford Model B was an upscale touring car introduced in 1904. It was Ford's first car to use the front-engine layout, with a large 24 hp 4-cylinder engine positioned at the front behind a conventional radiator...
and Model K
Ford Model K
Ford Model K was an upscale automobile produced by the Ford Motor Company. It was introduced in 1906 and replaced the earlier Model B. The model K was aimed at the top end of the market and featured an inline-6 giving 40 hp...
. Ford was reluctant, but Malcomson was backed by his majority coalition on the Board, and Ford capitulated.
The end at Ford
In 1905, to hedge his bets, Malcomson formed AerocarAerocar (1905 automobile)
The Aerocar was an American automobile built from 1905 to 1908 in Detroit, Michigan. Backed by Henry Ford's former partner, coal merchant Alexander Malcomson, the short-lived company offered an air-cooled 24 hp four-cylinder luxury car which sold for $2800.The factory was sold to Hudson Motor Car...
to produce luxury automobiles. However, other board members at Ford became upset, because the Aerocar would compete directly with the Model K. They demanded Malcomson give up his shares in Ford. Malcomson refused. However, Henry Ford was still upset at being dictated to by Malcomson. With Couzens's help, and without Malcomson's involvement, Ford established the Ford Manufacturing Company, explicitly to make parts for Ford Motor. Ford Manufacturing charged Ford Motor inflated prices, shifting the profits to Ford Manufacturing and leaving Ford Motor profitless. Malcomson, recognizing that he had been outmaneuvered, sold his stock in Ford Motor to Henry Ford in 1906 for $175,000.
Malcomson plowed his profit from the sale of Ford stock back into Aerocar,building a factory and producing the Aerocar Model D and Model F. However, the cars were not very popular, and Aerocar went broke in 1908. He sold his factory to Hudson Motor Car and returned to the coal business, still owing money to his creditors.
However, Malcomson dove back into business, running his coal supply business. In 1913, he formed Malcomson and Houghten, a distributor of coal, coke, and building supplies. By his death, he had amassed an estimated $2,000,000, and his insurance policy of $633,250 was the fifth largest paid in that year.
Alexander Malcomson died in Ann Arbor, Michigan
Ann Arbor, Michigan
Ann Arbor is a city in the U.S. state of Michigan and the county seat of Washtenaw County. The 2010 census places the population at 113,934, making it the sixth largest city in Michigan. The Ann Arbor Metropolitan Statistical Area had a population of 344,791 as of 2010...
in August of 1923, at age 59, after a long illness.