Thursday, June 25, 2015

The Henry Ford

Henry Ford
One of the icons of American business and automobile industry. He revolutionize the manufacturing of cars, bringing it to the masses. His innovations gave him a sparkling name, but his later years, tarnished his reputation and became notorious in the eyes of the public. Henry Ford rose from humble beginnings into one of the greatest magnates in the early 1900's.

Henry Ford (June 30, 1863 - April 7, 1947) came a farm in Dearborn, Michigan. Born on June 30, 1863 and the oldest among six siblings, he was the child of William and Mary Ford. He studied until the age of 15 with an unremarkable and even disappointing student. He never liked studying. After being a lousy student, he worked in his family’s farm in dismay as well. He never became fond of farming and desired for something more. Although he found farming not suitable for him, he, nevertheless, learned the values of hardwork, perseverance, and also patience. The young Henry Ford’s energy laid not in farming but in mechanics. As a young child he showed curiosity in the workings of a watch. He studied its mechanism and the complexity of its gears. By the age of 13, he repaired watches as a sideline. Eventually, he developed a dream of owning a watch business.

Henry Ford left home in 1879 and moved to Detroit seeking a new life. He wanted to develop his mechanical skills by working as an apprentice of a mechanic in the Flower and Brothers Machine Shop. Later on, he also worked for the Detroit Drydock Company. His life in Detroit, however, proved to be difficult and full of shortcomings. His salary did not make both ends meet. He had to repair broken watches in order to supplement his income. His hard life in Detroit convinced him to leave Detroit and return to his parent’s farm in 1882.

Ford stayed in Dearborn for more than a decade. Even while working in the farm Ford continued to study mechanics. He learned how to operate a steam powered tractor and studied its components closely. During this time, he also made a personal decision to marry Clara Bryant, and the couple had their child, Edsel, in 1893.

Ford and his family moved back to Detroit after the birth of his first son. Once he had returned to the city, Ford started to work as an engineer in the Edison Illuminating Company, which later became known as the Detroit Edison Company. He had a good career, later becoming the chief engineer of the company. He also had a good close friendly relationship with his boss, none than the inventor Thomas Edison. While working as an engineer, Ford also taught mechanical subjects in the Young Men’s Christian Association or YMCA.
Ford developed his first automobile in 1896 during the time he worked in the Detroit Edison Company. Ford used his experience with gears, engines, and also electronics, in order to develop his first car – the Quadricycle. He followed on the footsteps of numerous inventors making their own automobile. Ford’s Quadricycle was the lightest car during that time and also cheap. However, it had flaws, first it wasn’t strong and durable enough to withstand different terrains and it had no reverse gear. Nevertheless, it convinced Ford to enter the automobile industry.

Ford established his first car company in 1899. Named as the Detroit Automobile Company, it had a capital of $150,000. Ford gathered this capital by promoting the Quadricycle. Ford’s car company, however, faced tremendous problems, from financial to selling the Quadricycle. In the end in 1900, the Detroit Automobile Company went bankrupt. It tarnished the reputation of Ford in the eyes of investors.

Ford looked for a way to redeem his reputation and to restart his business. In October 1901, he took a chance to promote himself and his car in a race against Alexander Winton, a renowned racecar driver and an automobile manufacturer. The intense race between the professional racecar driver and a struggling car producer resulted to an unexpected victory for Ford. Ford credited his victory in the race to his car, which showed durability and speed. With his victory, Ford once more gained investors’ confidence. And in November 1901, Ford established his second automobile factory – the Henry Ford Motor Company. But this company too hit rock bottom quickly. In just a year, quarrel between investors and Ford resulted to a split within a company. As a result, Ford left the company and the remaining investors renamed the company from Henry Ford Motor Company to Cadillac. Ford, for a second, had no automobile company.

Ford, nevertheless, continued to develop new models and to look for an opportunity to restart his business. In 1902, he completed his first racecar, the 999. The 999 rescued Ford and allowed him to impress new investors for his third automobile company. Men such as Alexander Malcomson invested money to Ford. In 1903, Ford established his third and last automobile company – Ford Motor Company. It had a capital of $28,000, much came from Malcomson. For starters, Ford Motor Company released its first model – the Model A.

The Model A became Ford’s first flagship car model. The Model A had its difficulties. First, its production was cumbersome, which meant it needed workers with skills and took long time to produce a unit. In addition, Ford did not produce most of its parts. It relied on subcontractors like the Dodge Brothers for parts. In short, production of a Model A cost a lot that meant high prices. In order to address his company’s reliance on other companies, in 1905, Ford established the Ford Manufacturing Company with the responsibility of producing most of the parts that Ford Motors needed. Model A helped Ford to stay afloat.

Ford faced a challenge from the Association of License Automobile Manufacturers or ALAM after he released the Model A. ALAM owned the 1895 patent of George Selden’s automobile. Therefore, anyone who manufacture automobile must pay royalties for ALAM if they wished to continue in the car manufacturing industry. Ford, on the other hand, applied for a license to ALAM. But ALAM saw the previous failures of Ford and cited it as their reason for their denial of his request for license. Ford continued the manufacturing and selling of Model A despite ALAM’s refusal to give him the license. ALAM fought back and sued Ford for patent infringement in 1903. The court battle raged for more than five years. In 1911, the courts decided that Ford’s Model A differed greatly from the Selden Patent. This freed Ford Motor Company from paying any royalties to ALAM and Ford to develop new models of car.

Ford began to study the idea of mass production. While the lawsuit with ALAM raged, he looked for a way to reduce the expensive price of automobile. Back then, only the rich and powerful had automobiles. The class of workers had little money to be used to purchase an automobile. Ford knew that if he could drop the price of automobile to the level that an ordinary American could afford, Ford would be on the top. And so he began to study the idea of mass production. Mass production had been with mankind since the ancient world. The Chinese had mass produce weapons to arm their military. Ford wanted to apply the same in cars. It followed the logic that huge supply would translate to lower prices.

Model T became Ford Motor’s flagship unit in 1908. Ford came up with Model T as a solution to the problem of lowering the price of cars. The Model T had a simple design and required less parts than other previous model and counterparts. In 1910, Ford inaugurated his Highland Park Factory. The factory introduced the concept of an assembly line for cars. Its assembly line compose of several stations, each station having its own parts to install. The assembly line aimed for efficiency. It meant to save time and money. Back then, to produce an automobile, it took 12 and a half hours to produce a single unit. But with the assembly line, Ford produced a Model T in just an hour and a half. An assembly did not required highly skilled expensive workers. It only needed few unskilled workers to learn how to do their part and they cost less. With mass production and lower labor prices, Ford’s Model T had a lower price tag, a price that a middle class American could afford. And so, the Model T became Ford’s flagship unit until 1927.

Assembly lines, however, faced problems – psychological problems. Doing the same thing over and over again caused boredom to many workers. The feeling of ordering the same food over and over again made workers tired and became uninterested in working for another day. Many workers began to take long leaves and many resigned. At its peak, 10% of the workers either left or on leave. Absentees and vacancies in the line meant lower production and delays in production.

Ford solved the problem in the assembly line by increasing wages. In 1914, Ford announced an increase in his worker’s wages from the minimum of $2 to $5. Immediately, it gave workers the drive to work and even drove many more to apply for position in Ford Motor’s assembly lines. In addition to returning workers to the lines, it gave his workers the extra money to save for their own Model T. solving the problems in the assembly made Model T production to increase. By the end of the decade, Ford’s Model T controlled 50% of America’s automobile sales.

Ford’s success later became overshadowed by number of failures and changes in his style of management. Upon increasing his worker’s salary, people regarded him as a benevolent employer and business. Later on, it proved to be only at the start. His confidence grew and his management style became stricter and dictatorial. He began to lose interest in listening to major shareholder in Ford, like Alexander Malcomson, his partner since the unveiling of the Model A. In 1919, he announced the creation of another Ford Company that would rival the Ford Motor Company. Shareholders began to withdraw and Ford used the situation to his benefit by buying their stocks. In the end, the plan only meant to force shareholders to sell their stocks so that Ford could consolidate his control in the company. Other aspects of Ford’s personality change became embodied in the Model T. He looked up so much in the Model T that its production continued until 1927, when Ford stood by then as the third biggest automobile manufacturer behind its rivals General Motors and Chrysler. In the late 1910’s Ford also made some vain ventures. For example in 1915, he promoted peace, when World War I raged in Europe and threatened the United States. He supported his advocacy by sailing in a so-called “peace ship” named the Oskar II. Eventually, the ship became a flop. Another flop for Ford came in 1918 when he failed to win a seat in the Senate, where he capitalized in his image as a great employer and a peace advocate.

Ford also made a name as an anti-Semite in his later years. In 1920’s he accused the Jews of controlling the economy of the United States and blamed them for the upheaval during the Great Depression. In 1927, his anti-Semitism grew infamous in the Jewish community that they sued Ford for his remarks. In the 1930’s, his anti-Semitism further grew in infamy when the German Fuhrer Adolf Hitler, murderer of 6 million Jews, awarded For the Grand Cross of the German Eagle.

Besides being awarded by dictators, Ford developed his own dictatorship within his company. By the late 1920’s, the media dubbed Ford as the “Mussolini of Detroit.” He showed strictness on his workers and he cracked down against unionization. In the 1930’s, as the economy dragged on towards recovery, unions became stronger as businesses suffers. Ford resisted the unions. In 1937, he refused to recognize the UAW or the Union of Automobile Workers. In order to counter the influence of UAW, Ford planned to establish his own labor union under his own influence. Workers sympathetic to the UAW acted against Ford’s move. In Ford’s River Rogue Plant, workers called for the recognition of the UAW. Ford hired thugs to harass the workers in an overpass into submission. Workers and Ford’s mercenaries fought bloodily causing injuries from both sides. Ford might had intimidated his workers, but his act created an outcry in the public. Public pressure mounted and finally forced Ford to recognize the UAW. The labor dispute tarnished Ford’s reputation as a benevolent employer.

Ford, nevertheless, conducted philanthropic activities. In 1928, he established the Henry Ford Museum and Greenfield Village. In 1936, Ford established one of the biggest and most influential foundation in the world – the Ford Foundation.

Ford passed away on April 7, 1947. After retiring from Ford Motor Company in 1945, Ford suffered a cerebral hemorrhage two years later ending the life of one of the most highly recognized entrepreneur in history.

See also:

Geisst, Charles. Encyclopedia of American Business History. New York: Facts On File, 2006.

Goethals, G. et. al.   Encyclopedia of Leadership. California: Sage Publications, 2004.

Schaffner, H. Work in America: An Encyclopedia of History, Policy, and Society. California: ABC-CLIO, 2003.

Skrabec, Q. Jr. The 100 Most Significant Events in American Business: An Encyclopedia. California: Greenwood, 2012. 

"Henry Ford Biography." Encyclopedia of Biography. Accessed May 20, 2013.

"Henry Ford Biography (1863-1947)" How Products are Made. Accessed May 20, 2013.

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