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He invented modern mass production. He gave the world the first people’s car, and his countrymen loved him for it. But at the moment of his greatest triumph, he turned on the empire he had built—and on the son who would inherit it.
October/November 1986 | Volume 37, Issue 6
Two years later, in 1903, he set out to start the Ford Motor Company. He was forty years old and had, he felt, been apprenticing long enough. There were 800 cars in the city at that time, and some owners even had what were called motor houses to keep them in. Ford soon worked up his plan for his ideal, inexpensive new car, but he needed money —$3,000, he thought, for the supplies for the prototype (the actual cost was $4,000). He got the financing from a coal dealer named Alexander Malcomson. Ford and Malcomson capitalized their original company for $150,000, with 15,000 shares. Some of the early investors were not very confident. John Gray, Malcomson’s uncle, made a 500 percent return on his early investment but went around saying that he could not really ask his friends to buy into the company. “This business cannot last,” he said. James Couzens, Malcomson’s assistant, debated at great length with his sister, a schoolteacher, on how much of her savings of $250 she should risk in this fledging operation. They decided on $100. From that she made roughly $355,000. Couzens himself managed to put together $2,400 to invest, and from that, when he finally sold out to Ford in 1919, he made $29 million.
This time Ford was ready. He was experienced, he hired good men, and he knew the car he would build. “The way to make automobiles,” he told one of his backers in 1903, “is to make one automobile like another automobile … just as one pin is like another pin when it comes from a pin factory, or one match is like another match when it comes from a match factory.” He wanted to make many cars at a low price. “Better and cheaper,” he would say. “We’ll build more of them, and cheaper.” That was his complete vision of manufacturing. “Shoemakers,” he once said, “ought to settle on one shoe, stove makers on one stove. Me, I like specialists.”
But he and Malcomson soon split over the direction of the company: Malcomson, like Ford’s prior backers, argued that fancy cars costing $2,275 to $4,775 were what would sell. At the time, nearly half the cars being sold in America fell into this category; a decade later, largely because of Ford, those cars would represent only 2 percent of the market. Malcomson wanted a car for the rich; Ford, one for the multitude. Though the early models were successful—the company sold an amazing total of 1,700 cars in its first 15 months—it was the coming of the Model T in 1908 that sent Ford’s career rocketing.
It was the car that Henry Ford had always wanted to build because it was the car that he had always wanted to drive —simple, durable, absolutely without frills, one that the farmer could use and, more important, afford. He was an agrarian populist, and his own people were farmers, simple people; if he could make their lives easier, it would give him pleasure. He planned to have a car whose engine was detachable so the farmer could also use it to saw wood, pump water, and run farm machinery.
The Model T was tough, compact, and light, and in its creation Ford was helped by breakthroughs in steel technology. The first vanadium steel, a lighter, stronger form developed in Britain, had been poured in the United States a year before the planning of the Model T. It had a tensile strength nearly three times that of the steel then available in America, yet it weighed less and could be machined more readily. Ford instantly understood what the new steel signified. He told one of his top men, Charles Sorensen, that it permitted them to have a lighter, cheaper car.
The T was a brilliantly simple machine: when something went wrong, the average owner could get out and fix it. Unimproved dirt tracks built for horses, which made up most of the nation’s roads and which defeated fancier cars, posed no problem for it. Its chassis was high, and it could ride right over serious bumps. It was, wrote Keith Sward, a biographer of Ford, all bone and muscle with no fat. Soon the Ford company’s biggest difficulty was in keeping up with orders.
Because the Model T was so successful, Ford’s attention now turned to manufacturing. The factory and, even more, the process of manufacturing, became his real passions. Even before the T, he had been concerned about the production process. In 1906 he had hired an industrial efficiency expert named Walter Flanders and offered him a whopping bonus of $20,000 if he could make the plant produce 10,000 cars in 12 months. Flanders completely reorganized the factory and beat the deadline by two days. He also helped convince Ford that they needed a larger space. Flanders understood that the increasing mechanization meant that the days of the garage-shop car maker were over. There was a process now, a line , and the process was going to demand more and more money and employees. Flanders understood that every small success on the line, each increment that permitted greater speed of production (and cut the cost of the car), mandated as well an inevitable increase in the size of the company. “Henceforth the history of the industry will be the history of the conflict of giants,” he told a Detroit reporter.