source: The Engineer 16th April, 2020
Henry Ford, the man that put the world on wheels, was born in 1863 in Michigan during the American Civil War.
The conclusion of the war ushered in an era of prosperity and industrial expansion, with rail and telegraph networks linking all parts of America and providing new markets.
It was against this backdrop the young Henry Ford set out on the path to becoming an engineer. In 1875 his father gave him a pocket watch that he was to dismantle and reassemble with an ease that meant that he was soon the local watch repairer.
More significantly, he was also introduced to a Nichols and Shepard steam engine, the ‘first vehicle other than horse-drawn’ that he had ever seen.
Ford subsequently experimented on building his own engines, systematically dismissing steam as too dangerous for lightweight vehicles, electricity as economically unviable due to the cost of the copper wire, and storage batteries as impractical due to their weight. After repairing a single-cylinder four-stroke engine designed by the German engineer Nikolaus Otto, Ford became convinced that the internal combustion engine was the way forward and in 1892 he completed his first motor car.
By 1893 Ford’s car was running to the designer’s ‘partial satisfaction’ and over the next few years he was to drive it – the first of three versions he was to build at his home workshop – more than a thousand miles.
During this phase of experimentation Ford was in the employment of the Edison Illumination Company of Detroit where in 1893 he was promoted to chief engineer. This allowed him the time and money to develop his next self-propelled vehicle – the Ford Quadricycle – which was tested in 1896, the year Ford met Thomas Edison himself, who encouraged further development.
This in turn led Ford to found the short-lived Detroit Automobile Company that was dissolved in early 1901. Re-emerging that same year under the banner of the Henry Ford Company, Ford he teamed up with the engineer C Harold Wills, who was later to become the chief contributor to the Model T design.
Following a dispute over interference from his capital investor William H Murphy, Ford left the Henry Ford Company. Murphy promptly renamed it the Cadillac Automobile Company.
By 1903 the Ford Motor Company had been established and was working on what was to become known as the Ford model 999. It was in this car that Ford, on 12 January 1904, set a new land speed record of 91.3 mph.
With the marketing assistance of cycle ace and car racer Barney Oldfield, the Ford name became known throughout the United States. This understanding of brand promotion was to come into its own when the Model T was launched in 1908.
Ford personally saw to it that newspapers across the nation carried editorial and advertising about a new car that was simple to drive and easy to repair. With a network of dealers and a unit price that decreased with every passing year, the $825 car introduced the idea of ‘automobiling’ as a leisure concept to America. Sales went through the roof (often with year-on-year increases of 100 percent) and to cope with demand the company introduced new production and manufacturing methods such as moving assembly belts.
After the end of the First World War (1918) Ford was so recognizable that President Woodrow Wilson invited him to stand as a Democrat candidate for the United States Senate. Running as a pacifist and supporter of the League of Nations, Ford lost the election to a former United States Secretary to the Navy.
Following the failed foray into politics, Ford decided to take control of his own business by buying out his stockholders. To do this he set up a new company – Henry Ford and Son – while confusingly leaving his son Edsel at the helm of the Ford Motor Company.
The idea was to create sufficient market uncertainty to finesse his stockholders into selling their shares to either father or son before they lost their value. With all of the company’s assets now under family control, Ford went on to acquire the premium car manufacturer Lincoln Motor. However, Ford senior showed scant enthusiasm for the luxury sector, leaving the management of the Lincoln side of the business to his son.
But the market was changing, and although Ford could see no reason for changing the Model T that had been in production for 16 years, competition from General Motors (especially in the form of their stylish entry-level Chevrolet) and a decline in sales meant that Ford needed a strategic rethink.
His response was to cease production of the Model T and to build a Greenfield site assembly plant at River Rouge that would manufacture the new Model A. River Rouge was to become the largest industrial complex in the world and adopted vertical integration to the point that it produced its own steel.
Introduced in 1927, the new car went on to sell four million units and by 1932 Ford was manufacturing a third of the world’s cars. River Rouge heralded a change in corporate philosophy that allowed an annual model change system to be put in place (as pioneered by GM) and the introduction of car finance plans.
A champion of welfare capitalism, he advocated the improvement of workforce conditions and compensation. In 1914 he introduced his $5-per-day wage that raised the minimum daily pay from $2.34 to more than double, resulting in an influx of experienced mechanics to Detroit. What Ford lost on higher wages, he more than made up with increased productivity and reduced training expenditure. He introduced profit-sharing, albeit contingent on the recipients having their private lives examined and approved of by the company’s ‘social department’ (an incursion that Ford was later to regret.)
In 1926 he introduced the 5-day, 40-hour working week, a change based partially on self-interest (more leisure time meant that his workers would buy more cars), and altruism, “It is high time to rid ourselves of the notion that leisure for workmen is either ‘lost time’ or a class privilege.”
And yet, Ford was against workers’ unions, believing that they were essentially in place to put a brake on productivity in order to create more employment opportunities – a situation he regarded as paradoxical, believing as he did that productivity was a necessary condition for economic prosperity to exist.
The Dark Side of Henry Ford
“Despite Ford’s role in changing American society, he was suspicious of a lot of things that happened to make the modern world [as he experienced it], and he was attached to an old-fashioned vision of America. He found a scapegoat for the things he didn’t like in the Jewish community in this country and internationally, and that’s sad to contemplate.” – Steven Watts, author of The People’s Tycoon: Henry Ford and the American Century