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 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. 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. 1868-
1945); 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 test-
drives, 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 self-
defeating 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 Leninist-
leaning 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.