Thinking Citizen Blog — Henry Ford (1863–1947) — A Lone Wolf, A Rebel, A Flawed Hero
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: Henry Ford (1863–1947) — A Lone Wolf, A Rebel, A Flawed Hero
What did Henry Ford do worth remembering? He turned a luxury good into a necessity. He did this from humble origins, surmounting countless obstacles. He had a clear vision and fierce determination. His anti-semitism was his tragic flaw. Experts — please chime in. Correct, elaborate, elucidate.
THREE COMPANIES, A SHARP FOCUS, DOMINANT MARKET SHARE
1. Ford’s first company was the Detroit Automobile Company which lasted less than two years (August 1899 - January 1901). It produced only one product — a delivery truck. Sold only 20 of them. The initial investors lost money.
2. Ford’s second company, the Henry F. Ford Motor Company, was a re-organized version of the first and had an even shorter life — from November 1901 to August 1902. Ford’s investors wanted him to focus on the luxury market. He left his own company to form another one. After his departure, the Henry F. Ford Motor Company was renamed the Cadillac Motor Company which was purchased by General Motors in 1909.
3. Ford’s third company, the Ford Company, founded in 1903, produced 1,745 cars in 1904 and 1905. Ford used his dividends to buy out the other investors who also favored producing luxury cars.
NB: by 1914, Ford had 90% of the global automotive market. In 1927, when Ford ceased production of the Model T, Ford had produced half of the world’s automotive fleet.
FORD’S VISION — “A MOTOR CAR FOR THE GREAT MULTITUDE”
1. “I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for.”
2. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise.”
3. “But it will be so low in price that no man making a good salary will be unable to own one….”
FORD’S MATH — THE ASSEMBLY LINE, THE $5 A DAY WAGE, LOWER PRICES
1. The assembly line cut the production time in making the Model T from 12 hours and eight minutes to one hour and 33 minutes. But the monotony of the work resulted in 300% worker turnover.
2. To reduce worker turnover he offered a wage 2X the going rate — $5 for an 8-hour day. This was twice the going rate.
3. Ford’s focus on efficiency allowed him to reduce the price of the model T from $850 in 1907 to $263 in 1927.
NB: The original Model T had only a 20 horsepower engine and a maximum speed of 45 mph. But farmers could use the engine to help with other chores — “cut wood, grind grain, shear sheep, churn butter, or even run a washing machine or an electric generator.” In the 1920s he lost market share as he refused to offer customers any color than black, to offer a closed body, or an electric starter. Meanwhile, Alfred Sloan of General Motors had the idea of marketing new cars with new features every year — “one for every purse and purpose.” In 1927, Ford shut down all production to re-tool his River Rouge plant for the new Model A.
FOOTNOTE — HENRY FORD’S ANTI SEMITISM
1. Hitler had a portrait of Henry Ford behind his desk in his office.
2. He praised Ford in his manifesto, Mein Kampf.
3. “A nation of one hundred and twenty millions; only a single great man, Ford, to their fury still maintains full independence.”
NB: Hitler’s “people’s car” (Volkswagen) was a German version of the Model T.
W. Bernard Carlson, Inventions that Changed the World, Lecture 25
QUOTE OF THE MONTH
“Make your own Bible. Select and collect all the words and sentences that in all your readings have been to you like the blast of a trumpet.” - Ralph Waldo Emerson
My spin — then periodically review, re-rank, and exchange your list with those you love. I call this the “Orion Exchange” because seven is about as many as any human can digest at a time. Game?
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, (11/17/20)
Last four years of posts organized thematically:
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all