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Perhaps all that soybeans and the Internet have in common is that Ford Motor has invested in both - and many things in between.
For Henry Ford, diversification was mostly a matter of tinkering with his company the way he had tinkered with the machinery on his father's farm. For his successors, the search for new revenue streams has been driven by more traditional business motives, including the desire to even out the boom-and-bust nature of a highly cyclical industry.
The further the company has wandered from its core business, the more perilous its journeys have been. Ill-fated diversification has been a factor in the downfall of at least two CEOs, Donald Petersen and Jacques Nasser.
The Big 3
The company's most successful subsidiaries are Ford Motor Credit Co., which lends customers and dealers the money to buy Fords; Ford Customer Service Division, which sells parts for and services Ford Motor vehicles; and Hertz Corp., which rents Fords vehicles.
Ford Credit, with more than 11 million customers and $1.23 billion in profit in 2002, has been a life preserver during the company's recent troubled times. As financial analyst Daniel Gross wrote in Slate in March, "Ford today is really a marginally unprofitable auto manufacturer attached to a modestly profitable bank."
Ford Credit was formed in 1959, two years before Henry Ford II spent $28.2 million ($162 million in today's dollars) for the spark plug business of Electric Autolite and $83 million ($477 million today) for Philco. He saw the latter acquisition as Ford's ticket to a potentially vast market; although best known as a maker of domestic electrical appliances, principally radios and TVs, Philco also made transistors and computers, and was an active bidder in the young space program. For example, Philco-Ford Corp. designed and largely equipped...