Henry Ford

Henry Ford. Henry Ford (July 30, 1863 – April 7, 1947) was the American founder of the Ford Motor Company and father of modern assembly lines used in mass production. His introduction of the Model T automobile revolutionized transportation and American industry. He was a prolific inventor and was awarded 161 U.S. patents. As owner of the Ford Company he became one of the richest and bestknown 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. Ford had a global vision, with consumerism as the key to peace. Ford did not believe in accountants; he amassed one of the world's largest fortunes without ever having his company audited under his administration. Henry Ford's intense commitment to lowering costs resulted in many technical and business innovations, including a franchise system that put a dealership in every city in North America, and in major cities on six continents. Ford left most of his vast wealth to the Ford Foundation but arranged for his family to control the company permanently. Early years Ford was born July 30, 1863, on a farm next to a rural town west of Detroit, Michigan (this area is now part of Dearborn, Michigan).[1] His father, William Ford (1826-1905), was born in County Cork, Ireland. His mother, Mary Litogot Ford (1839-1876), was born in Michigan; she was the youngest child of Belgian immigrants; her parents died when Mary was a child and she was adopted by neighbours, the O'Herns. Henry Ford's siblings include Margaret Ford (1867-1868); Jane Ford (c. 18681945); William Ford (1871-1917) and Robert Ford (1873-1934). Henry took his passion for mechanics into his home. His father had given him a pocket watch in Henry's early teens. At 15, he had a reputation as a watch repairman, having dismantled and reassembled timepieces of friends and neighbors dozens of times. Ford's mother died in 1876, which came as a devastating blow to young Henry. His father expected him to eventually take over the family farm, but Henry despised farm work. With his mother dead, little remained to keep him on the farm. He later told his father, "I never had any particular love for the farm—it was the mother on the farm I loved.” In 1879, he left home for the nearby city of Detroit to work as an apprentice machinist, first with James F. Flower & Bros., and later with the Detroit Dry Dock Co. In 1882, he returned to Dearborn to work on the family farm and became adept at operating the Westinghouse portable steam engine. He was later hired by Westinghouse company to service their steam engines. Ford married Clara Ala Bryant (c. 1865-1950) in 1888 and supported himself by farming and running a sawmill. They had a single child: Edsel Bryant Ford (1893-1943).

In 1891, Ford became an engineer with the Edison Illuminating Company, and after his promotion to Chief Engineer in 1893, he had enough time and money to devote attention to his personal experiments on gasoline engines. These experiments culminated in 1896 with the completion of his own self-propelled vehicle named the Ford Quadricycle, which he test-drove on June 4. After various testdrives, Ford brainstormed ways to improve the Quadricycle. Also in 1896, Ford attended a meeting of Edison executives, where he was introduced to Thomas Edison himself. Edison approved of Ford's automobile experimentation; encouraged by Edison's approval, Ford designed and built a second vehicle, which was completed in 1898.[7] Backed by the capital of Detroit lumber baron William H. Murphy, Ford resigned from Edison and founded the Detroit Automobile Company on August 5, 1899.[8] However, the automobiles produced were of a lower quality and higher price than Ford would have liked. Ultimately, the company was not successful and was dissolved in January 1901. Ford went to work building a racer. With the help of C. Harold Wills, he designed, built, and successfully raced a 26HP automobile in October 1901. With that success, Murphy and other stockholders in the Detroit Automobile Company formed the Henry Ford Company on November 30, 1901, with Ford as chief engineer. However, Murphy brought in Henry M. Leland as a consultant. As a result, Ford left the company bearing his name in 1902. With Ford gone, Murphy renamed the company the Cadillac Automobile Company.[11] Ford once again focused on building a racecar, producing the 80+HP "999" racer , and getting Barney Oldfield to drive it to victory in October 1902. Ford also received the backing of an old acquaintance, Alexander Y. Malcomson, a Detroit-area coal dealer.[12] They formed a partnership, "Ford & Malcomson, Ltd." to manufacture automobiles. Ford went to work designing an inexpensive automobile, and the duo leased a factory and contracted with a machine shop owned by John F. Dodge and Horace E. Dodge to supply over $160,000 in parts.[13] Sales were slow, and a crisis arose when the Dodge brothers demanded payment for their first shipment.

Ford Motor Company In response, Malcomson brought in another group of investors and convinced the Dodge Brothers to accept a portion of the new company.[14] On June 16, 1903,[15] Ford & Malcomson was reincorporated as the Ford Motor Company, with $28,000 capital. The original investors included Ford and Malcomson, the Dodge brothers, Malcomson's uncle John S. Gray, Horace Rackham, and James Couzens. In a newly designed car, Ford gave an exhibition on the ice of Lake St. Clair, driving 1 mile (1.6 km) in 39.4 seconds, setting a new land speed record at 91.3 miles per hour (147.0 km/h). Convinced by this success, the 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, making the Ford brand known throughout the United States. Ford also was one of the early backers of the Indianapolis 500. Ford astonished the world in 1914 by offering a $5 per day wage, which more than doubled the rate of most of his workers. The move proved extremely 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 when Ford built a gigantic factory that shipped in raw materials and shipped out finished automobiles.

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 four cylinders were cast in a solid block; the suspension used two semi-elliptic springs. The car was very simple to drive, and—more importantly—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. 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. 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. By 1918, half of all cars in America were Model T's. However, it was a monolithic block; as Ford wrote in his autobiography, "Any customer can have a car painted any colour that he wants so long as it is black".[17] Until the development of the assembly line, which mandated black because of its quicker drying time, Model T's were available in other colors including red. The design was fervently promoted and defended by Ford, and production continued as late as 1927; the final total production was 15,007,034. This record stood for the next 45 years. In 1918, President Woodrow Wilson personally asked Ford to run for the United States 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.[18] 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 started another company, Henry Ford and Son, and made a show of taking himself and his best employees to the new company; the goal was to scare the remaining holdout stockholders of the Ford Motor Company to sell their stakes to him before they lost most of their value. (He was determined to have full control over strategic decisions). The ruse worked, and Henry and Edsel purchased all remaining stock from the 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.

"Model A" and Ford's later career By 1926, flagging sales of the Model T finally convinced Henry to make a new model. 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 more than 4 million. 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 Corporation became a major car-financing operation.

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 per year to fill 100 slots. Efficiency meant hiring and keeping the best workers. On January 5, 1914, Ford announced his $5-per-day program. The revolutionary

program called for a raise in minimum daily pay from $2.34 to $5 for qualifying workers. It also set a new, reduced workweek, although the details vary in different accounts. Ford and Crowther in 1922 described it as six 8-hour days, giving a 48-hour week,[19] while in 1926 they described it as five 8-hour days, giving a 40-hour week.[20] (Apparently the program started with Saturdays as workdays and sometime later made them days off.) Ford says that with this voluntary change, labor turnover in his plants went from huge to so small that he stopped bothering to measure it.[21] Ford had been criticized by other industrialists and 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 explained the change in part of the "Wages" chapter of My Life and Work.[22] He labeled the increased compensation as profit-sharing rather than wages. The wage was offered to employees who had worked at the company for six months or more, and, importantly, conducted their lives in a manner of which Ford's "Social Department" approved. They frowned on heavy drinking, gambling, and what we today would call "deadbeat dads". The Social Department used 50 investigators, plus support staff, to maintain employee standards; a large percentage of workers were able to qualify for this "profit-sharing." Ford's incursion into his employees' private lives was highly controversial, and he soon backed off from the most intrusive aspects; by the time he wrote his 1922 memoir, he spoke of the Social Department and of the private conditions for profit-sharing in the past tense, and admitted that "paternalism has no place in industry. Welfare work that consists in prying into employees' private concerns is out of date. Men need counsel and men need help, oftentimes special help; and all this ought to be rendered for decency's sake. But the broad workable plan of investment and participation will do more to solidify industry and strengthen organization than will any social work on the outside. Without changing the principle we have changed the method of payment."[23] Ford was adamantly against labor unions. He explained his views on unions in Chapter 18 of My Life and Work.[24] He thought they were too heavily influenced by some leaders who, despite their ostensible good motives, would end up doing more harm than good for workers. Most wanted to restrict productivity as a means to foster employment, but Ford saw this as selfdefeating because, in his view, productivity was necessary for any economic prosperity to exist. He believed that productivity gains that obviated certain jobs would nevertheless stimulate the larger economy and thus grow new jobs elsewhere, whether within the same corporation or in others. Ford also believed that union leaders (most particularly Leninistleaning ones) had a perverse incentive to foment perpetual socio-economic crisis as a way to maintain their own power. Meanwhile, he believed that smart managers had an incentive to do right by their workers, because doing so would actually maximize their own profits. (Ford did acknowledge, however, that many managers were basically too bad at managing to understand this fact.) But Ford believed that eventually, if good managers such as himself could successfully fend off the attacks of misguided people from both left and right (i.e., both socialists and bad-manager reactionaries), the good managers would create a socio-economic system wherein neither bad management nor bad unions could find enough support to continue existing. To forestall union activity, Ford 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. In the late 1930s and early 1940s, Edsel (who was president of the company) thought it was necessary for Ford to come to some sort of collective bargaining agreement with the unions, because the violence, work disruptions, and bitter stalemates could not go on forever. But Henry (who still had the final veto in the company on a de facto basis even if not an official one) refused to cooperate. For several years, he kept Bennett in charge of talking to the unions that were trying to organize the Ford company. Sorensen's memoir[25] makes clear that Henry's purpose in putting Bennett in charge was to make sure no agreements were ever reached. The Ford company 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. Sorensen said[26] a distraught Henry Ford was very close to following through with a threat to break up the company rather than cooperate but that his wife, Clara, told him she would leave him if he destroyed the family business that she wanted to see her son and grandsons lead into the future. Henry complied with his wife's ultimatum, and Ford went literally overnight from the most stubborn holdout among automakers to the one with the most favorable UAW contract terms. The contract was signed in June 1941.

The "invention of the assembly line" Both Henry Ford and Ransom E. Olds are sometimes oversimplistically credited with the "invention of the assembly line", although (as is the case with most inventions) the reality of the assembly line's development included many inventors. One prerequisite was the idea of interchangeable parts (which was another gradual technological development often mistakenly attributed to one individual or another). Ford's first moving assembly line (employing conveyor belts), after 5 years of empirical development, first began mass production on or around April 1, 1913. The idea was tried first on subassemblies, and shortly after on the entire chassis. Again, although it is inaccurate to say that Henry Ford himself "invented" the assembly line, it is accurate to say that his sponsorship of its development was central to its explosive success in the 20th century.