Many investors wanted to invest in Ford’s company when he started selling his own created cars. In 1909, he decided to manufacture only one type of car – Model T. Model T was first produced in 1908, adapting the assembly line or production line system until 1913. During this year up to 1927, the demand for affordable cars continually increased, ensuring that the production will also go up. From 1913 up to 1927, fifteen million cars have been sold and through this record, Ford became the leading auto manufacturer. Because of this data, competitors started to evolve and lessen the shares of Ford in the stock market.
The Model T had many innovations such as the steering wheel on the left, which was copied by every other car manufacturers. The model’s 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 very easy and cheap to repair. At $825 per model in 1908, almost half of the American people learned to drive on the Model T.[5]
With Ford’s genius in car manufacturing, his company posted continued increase in demand pushing him to further improve his assembly line method in ensuring that efficient and fast delivery are met. Ford’s car manufacturing business had a great impact in the economy of United States as it single-handedly revolutionalized the mode of transportation of the people. With his car, people will not have to rely on animals and wagons and count many days before reaching the specified destination. People can now relax and travel fast through the Model T, leaving behind the memories of old mode of transportation as even regular employees started to buy a unit for their own consumption or for businesses.
Ford also made used of vertical integration, implementation of which is very successful, after he built a huge factory that shipped in raw materials and shipped out finished automobiles. During this time, sales of Model T continually increased, independent dealers and franchises grew, local motor clubs sprung up to assist and teach new drivers in maximizing the power of the car as well as in travel expeditions at the countryside. Farmers were buying cars from the Ford Company as they realized the necessity of having one in conducting business from afar. To further increase efficiency and lower the cost of production, Ford implemented the moving assembly belts in his plants, increasing the company’s profit of 100% gains on the previous year.
However, before the implementation of the assembly line, Model Ts have different colors, including red. But as soon as the process of production improved, only black Model Ts were manufactured due to the black’s quick drying time. This design continued to be produced until 1927 when the final total production reached 15,007,034.
Aside from this, Ford astounded the world by offering a $5 per day wage to his employees, which more than doubled the rate of his workers. This created an influx of the best and the brightest engineers and mechanics to his company in Detroit, bringing in their human capital and expertise, raising productivity and lowering training costs. This technique, which Ford termed as “wage motive”, resulted in an increased profit and positive outcome to the Ford Motors Company.[6] This strategy of giving higher wage to employees was Ford’s way of weeding out workers that are not loyal and dedicated to his work. He only wanted to retain the best employees who will work hard and be paid for what is due to him. By offering higher wage, he also increased the expectation for these workers, such that those who could not cope with the pressures of working in his company will be turned away.
The $5 per day minimum wage scheme by the Ford Motor Company was considered as Henry Ford’s greatest contribution to the economy of the United States. The average wage in the auto industry then was only $2.34 for a 9-hour shift. He made the work hours into just 8-hour and increased the wage into $5. This caused violent reactions and debates with people saying that Ford caused “economic crime” for paying a worker too much and making him work for lesser hours. Later on, the wage further increased into a daily $10, increasing the buying capacity of people, particularly cars. It was a mark of a genius that Ford lowered the cost of his cars and increased wages, thus, enabling more people to spend money and buy his cars.[7]
In 1910, “Fordism” was coined to describe Henry Ford’s successes in the automobile industry. His techniques and strategies became models and were enthusiastically copied all over the world. Although, he was not the first to implement the assembly line system, he was the one who had the power and the will to utilize it and to produce numerous cars for profit. In the United States, “Fordism” is known as the economic philosophy that widespread prosperity and high corporate profits can be achieved by high wages that allow workers to purchase the output they produce, such as automobiles. As a technological fix, Fordism was part of the Efficiency Movement, which characterized the Progressive Era in the history of the United States.[8]
Although, for clarification, this system of higher wage were not given to all employees. There are conditions and requirements that should be followed. Would-be workers should be over 22 years old, have been working with the company for a minimum of 6 months, and conduct their lives accordingly like not taking into heavy drinking and gambling.
Being a pioneer of “welfare capitalism” designed to basically improve the lives of the workers and reduce the heavy turnover in the company, Ford justified his $5 per day, 9 to 8 hours work in a 5-day work week.
Ford not only focused his energies in car manufacturing. He also involved himself in the aviation business by building Liberty engines. In 1925, Henry Ford acquired the Stout metal Airplane Company. Also, Ford 4A Trimotor, otherwise known as the “Tin Goose” due to its corrugated metal construction. The FordA4 was the first successful U.S. passenger airliner which can accommodate 12 passengers, albeit uncomfortably. Production was finally discontinued after 200 models due to poor sales during the Great Depression.[9]
The Ford Motor Company played a central role in the Allied victory during the World War I and II. During the war and Europe was already under siege, Henry Ford used his expertise and knowledge in producing numerous B-24 Liberator bomber planes. Before Ford, the aviation industry could only produce one Consolidated aircraft B-24 bomber plane in a day at an aircraft plant. Through Ford’s tutelage and supervision, he was able to produce one B-24 an hour at a peak of 600 per month in 24-hour shifts. With his genius, he was able to help the military and the U.S. government in the active participation during the wars with enough bomber planes to succeed in the fight for freedom. The Willow Run factory owned by Henry Ford finally broke ground in April 1941. At that time, it was the largest assembly plant in the world with over 330,000 square meters. Due to this huge contribution to the aviation industry, the Smithsonian Institution eventually honored Ford and President Franklin Roosevelt referred to Detroit, Ford’s town, as the “Arsenal of Democracy”.[10]
The Ford Company was not spared from internal problems. Henry Ford had developed tunnel vision in such a way that he blocked every suggestion of diversification by his family members. It came to a point that other automotive manufacturing companies like the General Motors started increasing its sales and profit more than Ford due to its new designs and customer credit plan. His son, Edsel, continually tried to open his father’s eyes to what is happening in the global arena but Henry Ford was more or less close to the idea until sales started to fall down.
Due to the flagging sales of the Model T, Henry was finally convinced to produce a new model, personally supervising the technical aspect of designing the engine, chassis and other mechanical necessities while allowing Edsel to design the body and including a sliding-shift transmission resulting in a successful Ford Model A, enabling the company a total output of over four million automobile. Ford also opened to the idea of financing companies with its Ford-owned Universal Credit Company becoming a major car financing operation.[11]
After the World War II, Henry Ford suffered an initial heart attack, prompting him to go into semi-retirement, giving the reigns of supervision and management to his only son, Edsel. Although, the final decision still came from him. Edsel, however, did not live long as he died due to stomach cancer in 1943, forcing Henry out of retirement. He eventually ceded the presidency to his grandson, Henry Ford II in September 1945 due to ill health.
It was said that before Henry Ford died, the Rouge River overflowed and caused a blackout, forcing Henry and his wife to light numerous candles in their house. Henry Ford was later on found dead of cerebral hemorrhage at age 83 in Fair Lane, his Dearborn estate, and was buried in the Ford Cemetery in Detroit.
Based on an article written by Iacocca, president of Ford and later, Chairman of Chrysler, the company that Henry Ford established controlled numerous businesses such as rubber plantations in Brazil, a fleet of ships, a railroad, 16 coal mines and thousands of acres of timberland and iron-ore mines in Michigan ad Minnesota. These were all combined at the gigantic River Rouge plant, a sprawling city of a place where more than 100,000 men worked.[12]
Indeed, the Ford Company has come a long way. Since its first production of cars with names varying from the first 19 letters of the alphabet, Ford is now a giant industrial complex spanning the globe. It acquired numerous companies including the Lincoln Motor Company, which enabled Ford to branch out into luxury cars. In 1930, the Mercury Division was created to establish a division centered on mid-priced cars to be able to make it more affordable to customers.
During the 50’s, the Ford Company went public, giving people a chance to partly own the company. It had about 350,000 new stockholders after selling its shares. It also started producing the Thunderbird, which was the latest craze in town at that time. This time, the Ford Motor Company was being managed and supervised by Henry Ford II, whose keen perception of political and economic trends in the 50’s enabled the company to continue its aggressive expansion globally. One major profitable investment the Ford Motor Company had was the establishment of Ford of Europe in 1967, 20 years ahead of the European Economic Community’s arrival. In 1971, the company established its North American Automotive Operations, consolidating U.S., Canadian and Mexican operations more than two decades ahead of the North American Free Trade Agremeent.
The company started the last century with a single man envisioning products that would meet the needs of the people. Continually improving and innovating to cut costs of production and at the same time make it more efficient and produce numerous quality cars, the Ford Company was poised towards high-gear industrialization. Today, Ford Motor Company consists of a group varied automotive brands such as Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover and Volvo.[13]
Henry Ford had a full life, as he became the owner of his beloved automobile company, doing what he liked best and excelling magnificently. He read machines like he read books.[14] He knew his cars and closely studied what will effectively impact on his businesses. Although, he was accused with anti-semitism and was violently opposed to labor unions. he also terrorized his employees and started canonizing Adolf Hitler that the company’s image begun to fade and morale among employees went down. He was later on, rescued by his grandson, Henry Ford II, by making peace with the Jewish communities and allowing labor union practices in the company. Henry II encouraged the “whiz kids” like Robert McNamara and Arjay Miller to modernize management such that it put the Ford Company back into track again. Henry II continued the legacy that his grandfather left. It was the first company to sell a car right after the war and it was the only company who had a real base overseas. [15]
Henry Ford expanded his operations wherever there were roads and rivers. The success and the enduring competitiveness of the Ford Motor Company lied on the fact that Henry Ford brought the company in 33 countries at his peak, making the Ford automobile business the first to go global and conquer business in the areas where it was located.
REFERENCES:
Ford, Henry and Crowther, Samuel. My Life and Work. 1922.
Fordism. Retrieved from <
Henry Ford. Retrieved from <>.
Henry Ford 1863-1947. People and Discoveries. Retrieved from
<>.
History. Retrieved from < >.
Iacocca, Lee. Henry Ford. Time, Inc. 7 December 1998. Retrieved from
<>.
Watts, Steven. The People’s Tycoon: Henry Ford and American Century. Vintage.
10 October 2006.
Word count 2,864
[1] Henry Ford. Retrieved from <>.
[2] Henry Ford 1863-1947. People and Discoveries. Retrieved from <>.
[4] Ford, Henry and Crowther, Samuel. My Life and Work. 1922.
[7] Iacocca, Lee. Henry Ford. Time, Inc. 7 December 1998. Retrieved from <>.
[8] Fordism. Retrieved from <
[13] History. Retrieved from < >.
[14] Watts, Steven. The People’s Tycoon: Henry Ford and American Century. Vintage. 10 October 2006.
