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Autolite: (8) Fostoria Spark Plug Plant Purchased by Ford Motor Company

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The fortunes, of the Electric Autolite Company and the Fostoria Spark Plug Division had been deteriorating since1959. The principal customer, Chrysler, had experienced hard times, and other customers, such as Nash, Hudson, willys Overland, Packard, etc., were going out of business or merging with others. Leadership at Chrysler had changed and it became its desire to manufacture as many of its own products as possible. They had been nogotiating with the “parent” plant, Electric Autolite Company of Toledo, for the starter, voltage regulator, generator, distributor, etc. and also investigating the possibility of purchasing these items from other sources. This affected the Fostoria division, inasmuch as the spark plug was usually sold as part of a “package deal”. Autolite’s rivals were attempting to sell spark plugs to the entire Electric Autolite Corporation had passed to New York financiers. All these conditions combined made the Fostoria plant’s position critical.

Secret negotiations were entered into by Ford Motor Company with Electric Autolite to purchase from them certain assets. This would be beneficial to Ford, as it was hopeful that it would enter the lucrative “after-market’ business in a very strong way.

On Wednesday April 12,1961 at 3:30 A.M. EST, the following news item was to be released: “following is a statement by Henry Ford II, chairman of the Board of Ford Motor Company, and Robert H. Davies, President of the Electric Autolite Company, Toledo O.

“The companies also have entered in an agreement under which Electric Autolite will sell a substantial volume of automotive parts to Ford.

“The plants purchased by Ford are a battery plant located at Owosso, Mich., and a spark plug plant at Fostoria, O. Ford plans to continue production at both locations.

“The Electric Autolite company will continue to manufacture and market spark plugs and batteries, and other automotive products, including electrical products, wire and die castings, for sale to automotive manufacturers and others, for both original equipment and replacement. These products will be sold primarily under trade names of The Electric Autolite Company, such as “Prest-O-Lite” and “Rebat”. or under trade names owned by its customers.

“Spark plug manufacture will be conducted by The Electric Autolite company at the plant of its subsidiary at Sarnia, Ont., and at an additional assembly facility which The Electric Autolite Company is planning in another location in the United States. Automotive battery manufacture willbe continued at other Electric Autolite Company plants including five in the United States: at Vincennes, ind., Reading, Palk; Atlanta, Ga.; Oklahoma City, Okla.; and Oakland, Calif. Electrical products will continue to be made at The Electric Autolite Company’s various other plants.

“Included in the purchase by Ford are certain patents and license rights and the rights to the trade name ‘Autolite’, except in Canada, Brazil and Venezuela where The Electric Autolite Company will continue to distribute under the ‘Autolite’ trade name. In addition, Electric Autolite will continue to supply spark plugs and batteries under the ‘Autolite’ trade name to its original equipment manufacturer customers.

“Electric Autolite also will make available to Ford its sales organization for distributing in the replacement market spark plugs, batteries and electrical products. With the help of this organization, Ford will sell spark plugs, batteries and electrical products bearing the ‘Autolite’ brand name to distributors and other independent outlets.

“The transaction, which involved the payment by Ford of approximately $28,000,000 in cash, was authorized by the Boards of the two companies.”

After this announcement, each employee at the Fostoria plant received the following letter from Mr. Henry Ford II;

“April 12,1961

“To: Electric Auto-lite Company Salaried
Employees Owosso and Fostoria Plants
and Designated Sales and Engineering
Activities

“Ford Motor Company today has purchased certain assets of The Electric Auto-Lite Company used in connection with spark plug operations at Fostoria, Ohio, and its battery operation at Owosso, Michigan, and has received assignments of certain Electric Auto-lite company Parts Distribution agreements.

“It is natural, of course, that your immediate reaction to this announcement may be one of concern over the effect of the change upon your employment status. The primary purpose of this letter is to inform you about the plans of Ford Motor Company with respect to the opportunities which will be afforded you as a result of the purchase.

“First, with almost no exceptions, all of The Electric Auto-Lite company employees involved will be given the opportunity of continuing in their present capacities at their present salaries which, beginning tomorrow, will be paid by Ford Motor Company. It is our sincere hope that you will accept this opportunity.

“ Second,Ford Motor company will credit you with your length of service with The Electric Auto-Lite Company. It is our intent to treat you, foremost employee benefit purposes as though you had been employed by Ford Motor Company since your employment date with The Electric Auto-Lite Company.

“Third, you may become eligible to participate in all of the many benefits programs for salaried employees because we know that very few companies in the entire country can match them. Further, we are endeavoring to make arrangements that will transfer your creditable service under Electric Auto-Lite Pension Plan to the Ford Retirement Plan so as to minimize the effect that your change of employment will have on your retirement benefits. Arrangements have also been made so that there will be no gap in insurance and hospitalization coverage, if you enroll under Ford’s insurance program.

“We realize that you will have many questions not touched upon in this letter concerning what employment with Ford will mean to you. In the near future, therefore, you will be given an opportunity to talk with a representative of Ford about the company’s policies and benefit plans. In the meantime the attached booklet, “Going Places With Ford”, which is furnished to all Ford Salaried personnel, should acquaint you with the general provisions of some of our major personnel programs. We urge you to read it carefully.

“We know that Ford is the kind of organization that most people want to be associated with, and that you , too will find employment with Ford both challenging and rewarding.

Henry Ford II

 

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