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Henry Ford

Henry Ford (July 30, 1863 – April 7, 1947) was the founder of the Ford Motor Company and father of the modern assembly line used in mass production. His introduction of the Model T automobile revolutionized transportation and American industry. As sole owner of the Ford Company he became one of the richest and best-known people in the world. He is credited with "Fordism", that is, the mass production of large numbers of inexpensive automobiles using the assembly line, coupled with high wages for his workers--notably the $5 a day pay scale adopted in 1914. Ford, though poorly educated, had a global vision, with consumerism as the key to peace. He was a leading pacifist in World War I, but turned his company into a major producer of war materials in both world wars. His intense commitment to lowering costs resulted in numerous experiments and innovations, as well as the franchise system that put a dealership in every city in North America, and in major cities on six continents. However arch-rival General Motors jumped ahead in the 1920s by offering far more options to consumers in terms of power, prestige, styling, and convenient financing plans. Ford left most of his vast wealth to the Ford Foundation, but arranged for his family to control the company permanently.

Detroit Automobile Company and The Henry Ford Company

Ford works on engineAfter this initial success, Ford came to Edison Illuminating in 1899 with other investors, and they formed the Detroit Automobile Company. The Company soon went bankrupt because Ford continued to improve the design, instead of selling cars. He raced his car against those of other manufacturers to show the superiority of his designs. With his interest in race cars, he formed the Henry Ford Company.

During this period, he personally drove one of his cars to victory in a race against Alexander Winton on October 10, 1901. In 1902, Ford continued to work on his race car to the dismay of the investors. They wanted a high-end production model and brought in Henry M. Leland to do it. Ford resigned over this usurpation of his authority. He said later that "I resigned, determined never again to put myself under orders." The company was reorganized as Cadillac.

Ford Motor Company

At age 40, Ford, with 11 other investors and $28,000 in capital, incorporated the Ford Motor Company in 1903. In a newly-designed car, Ford drove an exhibition in which the car covered the distance of a mile on the ice of Lake St. Clair in 39.4 seconds, which was a new land speed record. Convinced by this success, the famous race driver Barney Oldfield, who named this new Ford model "999" in honor of a racing locomotive of the day, took the car around the country and thereby made the Ford brand known throughout the United States. Ford was also one of the early backers of the Indianapolis 500.

Ford astonished the world in 1914 by offering a $5 a day wage that more than doubled the rate of most of his workers. The move proved hugely profitable. Instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing in their human capital and expertise, raising productivity, and lowering training costs. Ford called it 'wage motive.' The company's use of vertical integration also proved successful, as Ford built a gigantic factory that shipped in raw materials and shipped out finished automobiles.

The Model T

The Model T was introduced on October 1, 1908. It had many important innovations--such as the steering wheel on the left, which every other company soon copied. The entire engine and transmission were enclosed; the 4 cylinders were cast in a solid block; the suspension used two semi-elliptic springs. The car was very simple to drive, and--more important--easy and cheap to repair. It was so cheap at $825 in 1908 (the price fell every year) that by the 1920s a majority of American drivers learned to drive on the Model T, leaving fond memories for millions. Ford created a massive publicity machine in Detroit to ensure every newspaper carried stories and ads about the new product. Ford's network of local dealers made the car ubiquitous in virtually every city in North America. As independent dealers the franchises grew rich and publicized not just the Ford but the very concept of automobiling; local motor clubs sprang up to help new drivers and to explore the countryside. Ford was always eager to sell to farmers, who looked on the vehicle as a commercial device to help their business. Sales skyrocketed--several years posted 100+% gains on the previous year. Always on the hunt for more efficiency and lower costs, in 1913 Ford introduced the moving assembly belts into his plants, which enabled an enormous increase in production. Sales passed 250,000 in 1914. Although Henry Ford is often credited with the idea, contemporary sources indicate that the concept and its development came from employees Clarence Avery, Peter E. Martin, Charles E. Sorensen, and C.H. Wills. (See Piquette Plant) By 1916, as the price dropped to $360 for the basic touring car, sales reached 472,000.

Ford Assembly Line, 1913By 1918, half of all cars in America were Model T's. As Ford wrote in his autobiography, "Any customer can have a car painted any colour that he wants so long as it is black". Until the development of the assembly line which mandated black because of its quicker drying time, Model Ts were available in other colors including red. The design was fervently promoted and defended by Henry Ford, and production continued as late as 1927; the final total production was exactly 15,000,000. This was a record which stood for the next 45 years.

In 1918 President Woodrow Wilson personally asked Ford to run for the Senate from Michigan as a Democrat. Although the nation was at war Ford ran as a peace candidate and a strong supporter of the proposed League of Nations. Ford lost by 1%. In December 1918 Henry Ford turned the presidency of Ford Motor Company over to his son Edsel Ford. Henry, however, retained final decision authority and sometimes reversed his son. Henry and Edsel purchased all remaining stock from other investors, thus giving the family sole ownership of the company.

By the mid-1920s, sales of the Model T began to decline due to rising competition. Other auto makers offered payment plans through which consumers could buy their cars, which usually included more modern mechanical features and styling not available with the Model T. Despite urgings from Edsel, Henry steadfastly refused to incorporate new features into the Model T or to form a customer credit plan.

The "Model A" and Ford's Later Career

By 1926, flagging sales of the Model T finally convinced Henry to make a new model car. Henry pursued the project with a great deal of technical expertise in design of the engine, chassis, and other mechanical necessities, while leaving the body design to his son. Edsel also managed to prevail over his father's initial objections in the inclusion of a sliding-shift transmission. The result was the successful Ford Model A, introduced in December, 1927 and produced through 1931, with a total output of over four million automobiles. Subsequently, the company adopted an annual model change system similar to that in use by automakers today. Not until the 1930s did Ford overcome his objection to finance companies, and the Ford-owned Universal Credit Company became a major car financing operation.

Time Magazine, January 14, 1935Henry Ford promoted many technical innovations and became a promoter of aviation. He was granted over 131 patents.

He sponsored the Stout Metal Airplane Company, which developed the Ford Tri-Motor, an early airliner.

Death of Edsel Ford

In May 1943, Edsel Ford died, leaving a vacancy in the company presidency. Henry Ford advocated long-time associate Harry Bennett to take the spot. Edsel's widow Eleanor, who had inherited Edsel's voting stock, wanted her son Henry Ford II to take over the position. The issue was settled for a period when Henry himself, at age 79, took over the presidency personally. Henry Ford II was released from the Navy and became an executive vice president, while Harry Bennett had a seat on the board and was responsible for personnel, labor relations, and public relations.

The company saw hard times during the next two years, losing $10 million a month. By 1945, Henry Ford's senility was quite evident, and his wife and daughter-in-law forced his resignation in favor of his grandson, Henry Ford II.

Ford's labor philosophy

Henry Ford was a pioneer of "welfare capitalism" designed to improve the lot of his workers and especially to reduce the heavy turnover that had many departments hiring 300 men a year to fill 100 slots. Efficiency meant hiring and keeping the best workers. On January 5, 1914, Ford announced his five-dollar a day program. The revolutionary program called for a reduction in length of the workday from 9 to 8 hours, a 5 day work week, and a raise in minimum daily pay from $2.34 to $5 for qualifying workers. Ford had been criticized by Wall Street for starting the 40 hour work week and a minimum wage. He proved, however, that paying people more would enable Ford workers to afford the cars they were producing, and therefore be good for the economy. Ford labeled the increased compensation as profit-sharing rather than wages. The wage was offered to men over age 22, who had worked at the company for 6 months or more, and, importantly, conducted their lives in a manner of which Ford's "Sociological Department" approved. They frowned on heavy drinking and gambling. The Sociological Department used 150 investigators and support staff to maintain employee standards; a large percentage of workers were able to qualify for the profit-sharing. Ford was adamantly against labor unions in his plants. To forestall union activity, he promoted Harry Bennett, a former Navy boxer, to be the head of the Service Department. Bennett employed various intimidation tactics to squash union organizing. The most famous incident, in 1937, was a bloody brawl between company security men and organizers that became known as The Battle of the Overpass. Ford was the last Detroit automaker to recognize the United Auto Workers union (UAW). A sit-down strike by the UAW union in April 1941 closed the River Rouge Plant. Under pressure from Edsel and his wife, Clara, Henry Ford finally agreed to collective bargaining at Ford plants, and the first contract with the UAW was signed in June 1941. Ford Airplane Company Ford, like other automobile companies, entered the aviation business during World War I, building Liberty engines. After the war, it returned to auto manufacturing until 1925, when Henry Ford acquired the Stout Metal Airplane Company. Ford 4-AT-F (EC-RRA) de L.A.P.E.Ford's most successful aircraft was the Ford 4AT Trimotor—called the “Tin Goose” because of its corrugated metal construction. It used a new alloy called Alclad that combined the corrosion resistance of aluminum with the strength of duralumin. The plane was similar to Fokker's V.VII-3m, and some say that Ford's engineers surreptitiously measured the Fokker plane and then copied it. The Trimotor first flew on June 11, 1926, and was the first successful U.S. passenger airliner, accommodating about 12 passengers in a rather uncomfortable fashion. Several variants were also used by the U.S. Army. About 200 Trimotors were built before it was discontinued in 1933, when the Ford Airplane Division shut down because of poor sales due to the Depression. Peace ship In 1915, he funded a trip to Europe, where World War I was raging, for himself and about 170 other prominent peace leaders. He talked to President Wilson about the trip but had no government support. His group went to neutral Sweden and the Netherlands to meet with peace activists there. Ford, the target of much ridicule, left the ship as soon as it reached Sweden. An article G. K. Chesterton wrote for the December 11, 1915 issue of Illustrated London News, shows why Ford's effort was ridiculed. Referring to Ford as "the celebrated American comedian," Chesterton noted that Ford had been quoted claiming, "I believe that the sinking of the Lusitania was deliberately planned to get this country America into war. It was planned by the financiers of war." Chesterton expressed "difficulty in believing that bankers swim under the sea to cut holes in the bottoms of ships," and asked why, if what Ford said was true, Germany took responsibility for the sinking and "defended what it did not do." Mr. Ford's efforts, he concluded, "queer the pitch" of "more plausible and presentable" pacifists. Ford does business with the world Ford's philosophy was one of economic independence for the United States. Ford's River Rouge Plant would become the world's largest industrial complex even able to produce its own steel. Ford's goal was to produce a vehicle from scratch without reliance on foreign trade. Ford believed in the global expansion of his company. He believed that international trade and cooperation led to international peace, and used the assembly line process and production of the Model T to demonstrate it [Watts 236-40]. He opened Ford assembly plants in Britain and Canada in 1911, and soon became the biggest automotive producer in those countries. In 1912 Ford cooperated with Agnelli of Fiat to launch the first Italian automotive assembly plants. The first plants in Germany were built in the 1920s with the encouragement of Herbert Hoover and the Commerce department, which agreed with Ford's theory that international trade was essential to world peace [Wilkins]. In the 1920s Ford also opened plants in Australia, India, and France, and by 1929 he had successful dealerships on six continents. Ford experimented with a commercial rubber plantation in the Amazon jungle called Fordlândia; it was one of the few failures. In 1929 Ford accepted Stalin's invitation to build a model plant at Gorky, a city later renamed to Nizhny Novgorod, and he sent American engineers and technicians to help set it up, including future labor leader Walter Reuther. Edsel Ford, Charles Lindbergh, and Henry Ford pose in the Ford hangar during Lindbergh's August 1927 visit.The technical assistance agreement between Ford Motor Company, VSNH and Amtorg (as purchasing agent) was concluded for nine years and signed on May 31, 1929, by Ford, FMC vice-president Peter E. Martin, V. I. Mezhlauk, and the president of Amtorg, Saul G. Bron. Any nation where the United States had peaceful diplomatic relations, Ford Motor Company worked to conduct business. By 1932, Ford was manufacturing one third of all the world’s automobiles. Ford's image transfixed Europeans, especially the Germans, arousing the "fear of some, the infatuation of others, and the fascination among all" [Nolan p 31]. Germans who discussed "Fordism" often believed that it represented something quintessentially American. They saw the size, tempo, standardization, and philosophy of production demonstrated at the Ford Works as a national service - an "American thing" that represented the culture of United States. Both supporters and critics insisted that Fordism epitomized American capitalist development, and that the auto industry was the key to understanding economic and social relations in the United States. As one German explained, "Automobiles have so completely changed the American's mode of life that today one can hardly imagine being without a car. It is difficult to remember what life was like before Mr. Ford began preaching his doctrine of salvation" For many Germans Henry Ford himself embodied the essence of successful Americanism.
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