On this day in economic and financial history ...
If you ask someone about Ford's (NYSE:F) most important contribution to the world, most will say "the assembly line." That assembly line -- genesis of the Model T's widespread success -- first began operating on Dec. 1, 1913 . It made Ford a (more) dominant automaker, brought automobiles into the range of many budgets, and helped create the car culture that's still firmly rooted in the American psyche.
The assembly line's eureka moment came from a visit to a Chicago slaughterhouse. The slaughterhouse's conveyor-belt butchering system planted an idea in Ford executives' heads, and its design took shape over seven years, with many smart men contributing part of the puzzle. Before the assembly line became operational, a single Model T took more than 12 hours to produce. After workers became accustomed to the new machinery, production time per Model T dropped to just over an hour and a half. The speed of production had increased by so much that the drying of paint became the biggest bottleneck -- hence the exclusive use of black for years afterwards. Just over a decade after the assembly line started up, Ford had built 10 million Model Ts.
The assembly line soon forced a great degree of auto-industry consolidation as well. More than 250 companies that failed to capitalize on the assembly line's productivity improvements were out of business by 1930. Those that remained represented the early golden age of the auto industry -- between 1913 and 1930, six automakers were components of the Dow Jones Industrial Average (DJINDICES:^DJI).
Three vehicle tire manufacturers were also part of the Dow during this time. Goodrich, now part of United Technologies (NYSE:UTX), was part of the Dow from 1916 to 1920 and 1928 to 1930. Goodyear (NASDAQ:GT) was a component from 1930 all the way to 1997. U.S. Rubber (later Uniroyal, and ultimately acquired by Michelin) was one of the Dow's original 12 components and remained part of the index from 1898 until 1927.
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Fill 'er up
Another important vehicular innovation became operational at the same time Ford's auto production kicked into high gear -- the first drive-in gas station opened on Dec. 1, 1913 in Pittsburgh. This was a major step up in convenience from the previous fueling methods, which required stops at gas-retailing general or hardware stores and the use of portable external tanks. It was opened by Gulf Oil, which later merged with Standard Oil of California, now known as Chevron (NYSE:CVX).
By 1930, after the auto industry had shaken out, there were more than 100,000 gas stations across the United States. By that point, four different oil companies, including Standard Oil of California, had earned a spot on the Dow.
A capital-intensive conglomerate
General Electric (NYSE:GE) is a lot more than an industrial conglomerate. It also happens to control a massive financial concern, which got it in some trouble when the financial system imploded in 2008. The origins of its worldwide financial operations began with a simple goal on Dec. 1, 1932: to make GE's appliances more affordable for millions of Depression-ravaged American families.
A simple announcement ran in the Los Angeles Times on the day General Electric formed its GE Credit Corporation, which has since evolved into the company's GE Capital division. No one could have guessed that the humble refrigerator-affordability program would evolve into a division capable of generating more than $40 billion in annual revenue, with nearly $600 billion in total assets.
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I'm a Pepper, you're a Pepper
A patron at a Waco, Texas, corner drugstore enjoyed the first Dr Pepper on Dec. 1, 1885. By 1904, Dr Pepper had gone national, and visitors to the centennial Louisiana Purchase Exposition enjoyed the new 23-flavor soda pop during its first big promotional push. Dr Pepper Snapple (NYSE:DPS) was formed much later, the result of acquisitions by Britain's Cadbury Schweppes. Dr Pepper has a smaller following than Coca-Cola (NYSE:KO) or Pepsi (NASDAQ:PEP), and its corporate parent has managed to hold only about 17% of the carbonated soft drink market after its spinoff in 2008. Perhaps that explains its rather bleak British slogan, "What's the worst that could happen?"
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