Henry Ford was born as the US Civil War raged. The America of neon lights and soaring skyscrapers did not exist then. People were transported by carriage and lived largely off what the land gave them. When Ford died, less than two years had passed since the end of the Second World War. At that time, the USA was the most advanced industrial country in the world and humanity was entering a new era marked by leaps and bounds in technological development and consumerism.
Henry Ford was not just a man who produced millions of cars. He claimed to have invented the modern age we still live in today. He perfected the conveyor belt, making mass production possible. Mass production triggered mass consumption, which created the middle class. It was the creation of a strong and consumer-oriented middle class that gave birth to the modern age. Henry Ford was right, because even today we are mass-producing and buying many things other than cars.
He was an industrial magnate, a visionary and a shrewd businessman, a true American icon. He built a car, the legendary Model T, that every average American could afford. In a time when horse-drawn carriages still raced over muddy dirt tracks, this was unheard of. The arrival of the durable, but above all affordable, ‘Tin Lizzie’, as it was affectionately called, was a truly epochal event. Distances suddenly became shorter, both between town and country and between people. The automobile then took centre stage in the American way of life and has remained there ever since.
Diploma in the workshop
Henry Ford was born on 30 July 1863 on a farm near Dearborn, not far from Detroit. The Fords were a farming family and Henry, the eldest of five children, was expected to take over the home farm one day. But he was not keen on farm life, as he found working the land too wasteful a task. The amount of work involved was simply too great in relation to the proceeds – a mindset in which we can already recognise the future entrepreneur.
But little Henry was not yet an entrepreneur, he was interested in other things. He was thinking about how machines worked and how they could be improved. “All my toys were tools”, he wrote in his autobiography. When his father gave him a pocket watch, he took it apart and carefully examined every part of it. When he had unravelled all its mysteries, he put it back together and put it in his pocket. The locals jokingly said that the wall clocks began to tremble with fear when Henry approached them.
The greatest event of his childhood was an encounter with a road machine he saw one day on his way to Detroit with his father. It was used to pull threshing machines and saws that were too heavy for horse-drawn carriages. It consisted of a portable engine and a boiler on wheels, plus a water tank and a coal cart, which the vehicle pulled behind it. It had a chain connecting the engine and the rear wheels. The engine was above the boiler and a man standing on a platform threw coal into it and operated the vehicle.
It was the first time Henry had seen a vehicle that wasn’t pulled by a horse. He has always remembered this event and liked to tell us that it was on that day that the mechanic in him awoke, and who would later build the most famous car in US history.
His love of machinery and his boredom with farm life led him to leave home at 16 and move to Detroit. He got his first job with a tram company, but was fired after a week. He claimed that he had to leave because his older colleagues, who saw him as a threat, wanted to get rid of him. But perhaps that was the first time he realised how thankless it was to work for someone else. Henry Ford could not tolerate authority.
Soon after, he found a new job in a factory that made screws, bearings and valves of all types and sizes. He gained experience and soon became an excellent mechanic, able to repair every machine in the factory. Since he could not survive on one salary alone, he also started repairing clocks and engines of all kinds. By then, he was also able to repair the famous road machine that had brought him to the city in the first place. Henry Ford only completed the village primary school and never regretted it. He was educated in Detroit’s workshops and factories.
In his spare time, this great music lover liked to go to dances. There he met Clara Bryant and married her in 1888. They both grew up on a farm and shared a similar world view. Clara was his biggest supporter and best friend. “The most beautiful day of my life was when I met Mrs Ford,” he later recalled, when he was already a billionaire.
In 1893, their son Edsel was born. At that time, Henry wanted to gain further experience in electrical engineering. He visited the Edison Illuminating Company, which supplied electricity, and applied for a job. He was lucky, because a job had just opened up at one of the power stations. Henry jumped at the chance, but Clara forgot to mention that the vacancy had arisen because a previous employee had died in the course of his duties.
Henry Ford’s Quadricycle and first steps in entrepreneurship
He quickly rose through the ranks and after a few years was the company’s leading engineer. He had a very decent salary and relatively little work, which allowed him to concentrate on his life’s project – building the “horseless carriage”. Initially, he intended to build a steam-powered vehicle that could be used by farmers as a tractor. He wanted to “relieve the shoulders of flesh and blood and put the drudgery on steel and an engine”, but soon realised that people would be more interested in a vehicle they could travel in than in a machine they could use to do the work on the farm. This was the beginning of the idea of the car, although nobody knew the word at the time.
For the next few years, Henry Ford spent every spare moment in his garden shed, pencil and hammer in hand, thinking about how to get horses off the American roads. Several people helped him build the “horseless carriage”, most of them for free. Henry had the ability, from an early age, to sell his own benefit for the common good. A kind word and a warm handshake opened many doors for him.
In June 1896, a simple petrol-powered vehicle, which Ford christened the “quadricycle”, rolled out of this very shed – which could have been called a “garage” if that had existed at the time. It had a bicycle seat, four horsepower, two gears and could reach a top speed of 32 kilometres per hour. Ford liked to boast that it was the first car to drive on the streets of Detroit, frightening horses with its rumbling and attracting stares.
Encouraged by his success, he decided to leave his well-paid job and concentrate exclusively on building new and better “horseless carriages”. It was an informed decision, because Henry Ford left nothing to chance. At the age of 32, he already had many connections in high circles. For example, he once invited the mayor of Detroit to take a ride in a quadricycle, and he was delighted with the invention. William Murphy, one of the richest men in the city, also enjoyed riding through the streets with the wind in his hair.
In 1899, Ford found enough investors, including the two important men mentioned above, to start a car company. He became head of production and the main creative force behind the rather unoriginally named Detroit Automobile Company. His willfulness soon became apparent. The investors had one demand – the company must make a profit. But Ford, for the first time with a real factory and skilled workers, wanted above all to hone its design skills.
After two years, during which only ten below-average vehicles were produced, everyone involved was unhappy and the company closed its doors. For Ford, it was its first experience in the world of business. He learned how to attract investors and saw once again how much he hates dancing to someone else’s tune.
The arduous climb to the top
These were the beginnings of the Detroit car industry. In the years that followed, dozens of similar companies, mostly producing road machines, luxury cars or racing cars, were founded and failed. Ford found a new challenge in the production of the racing car. Car racing, a European phenomenon, was becoming increasingly popular in the USA. Within a few months, Ford, again with a lot of outside help, had built a great racing car and even won the first Detroit auto race with it. He found the driving so terrifying that he never got behind the wheel of a racing car again.
In addition to the prize money, the win has brought him recognition. His status as a winning racing driver and an experienced designer helped him to raise enough money to set up his own company, this time bearing his name – the Henry Ford Company.
But his plans were again contrary to investors’ expectations. Ford wanted to build the best racing car in the country, and investors had no patience for experimentation, only profit. Ford’s second business story came to an end after six months. He got a $900 severance package and a promise that the company would no longer use his name. Thus was born Cadillac, the company that would later become one of Ford’s biggest competitors.
The money from the severance package was enough to last the Ford family six months. During this time, Henry built two new racing cars that were even better and faster than the first. It was time for new challenges. This time, Ford had much more ambitious plans. Only the rich could afford the cars that were produced in those days. More than a means of transport, the car was a prohibitively expensive toy. In the early years of the 20th century, it could be said to have had a status similar to that of a yacht today. The sale of a single luxury car could bring in a lot of money, so hardly anyone bothered to make cheap cars.
But Henry Ford saw his opportunity in this. The idea had been brewing for a long time and was probably born while he was still living on the farm. He recalled that every trip was a logistical nightmare. The mobility of the rural population in 1900 was the same as in 1700 and the horse was still the only means of transport. Ford was convinced that every man would have a car if he could afford one. He wanted to build a vehicle for everyday use. With this thought in mind, he began to look for capital with which to set up a new company, and he made his revolutionary idea a reality.
On 16 June 1903, twelve investors founded the Ford Motor Company in Detroit, which is now the fifth largest car company in the world. Ford became vice-president, designer, chief mechanic, controller and general manager. He owned a quarter of the company, but this was not enough to give him a free hand to make the most important decisions, so he tried to increase his stake in every way. Within three years, he had managed to buy back enough shares to become the majority owner of 51% of the company. Those who sold their shares to him after three years regretted their decision for the rest of their lives.
Ford has surrounded itself with very capable and dedicated colleagues. Childe Wills, a mechanical engineer who has been involved in the design of all the major vehicles to leave the Ford factory, was in charge of the technical side of production. James Cuozens was a kind of business manager and the second most important man in the company. “Ford couldn’t run a small business and Couzens couldn’t build a child’s toy, but together they managed to take the world by storm,” wrote one Ford biographer. Both Willis and Couzens contributed greatly to the company’s success, but later fell out with Ford and left. Wills was one of the most sought-after mechanical engineers in the country, and Couzens went on to become Mayor of Detroit and a Senator.
America on wheels
In its first year, the Ford Motor Company built more than 1,700 cars with the simple name Model A. It was the Ford way – simple, reliable and cheap. It was well received by customers and business boomed. Over the following years, thousands more cars rolled out of the factory on Avenue Piquette. The perfectionist Ford was trying to build a car that was even better, more reliable and cheaper than the Model A. With each new model, he was closer to his goal. It took him five years to build a car he was happy with. On the first of October 1908, the Model T was born, the car that changed the American way of life.
To give you an idea, the Model T had four cylinders, 20 horsepower, a top speed of 72 km/h and fuel consumption of 15 litres per 100 kilometres – but its technical specifications are not that important. What mattered most was that the Model T was affordable for the average American. “You can afford a Ford too!” read the billboards. It cost $825, which today would be around €20,000. In an era when most cars cost more than a decent house in the suburbs, this was unheard of.
In addition to its affordability, the car is characterised by its ease of use and durability. In 1908, there were virtually no roads in the USA as we know them today. But the Model T could also negotiate mud, gravel and potholes. Ford was right when he predicted that everyone would own a car if they could afford it. Within days, the company had more than 10,000 orders.
More than half of the buyers came from rural areas. The Model T was also suitable for work in the field. A farmer could tie a log to it in the morning and haul it to the sawmill, and take the family out for a drive in the evening. Suddenly, the average farmer’s horizons were broadened. The increased mobility of rural America had far-reaching consequences – the line between rural and urban was blurred.
Today, the American way of life is no longer imaginable without the car. The Model T was so popular that it became part of folklore. It was soon nicknamed “Tin Lizzie” – Lizzie being the generic name for the horse that, thanks to Henry Ford, finally lost the battle with the “horseless carriage”. Tin Lizzie was the symbol of the pre-war USA. “Most of the children of our age were conceived in Model Ts, and quite a few were born in them,” wrote the famous American writer John Steinbeck in his book Canned Fish Street.
The Industrial Revolution of the 20th century
The Model T would not have left such a mark on American society if it had not been so cheap. From the start, Ford’s plan was to build a useful and durable car that was as affordable as possible. When the first Model T rolled out of the factory, Ford was only partly satisfied. From a technical point of view, the car was more or less as he had envisioned it – simple and durable. It needed no major improvements.
But Ford was not happy with the price. He was convinced that the car could be even cheaper, in fact, that it even had to be cheaper, and for the next few years that was all he did. The solution was simple – production costs had to be cut and efficiency had to be increased. All Ford’s competitors were, of course, dealing with the same issue, but only he managed to optimise production to perfection.
In 1910, a new Ford factory was built in the Detroit suburb of Highland Park, which was then the largest manufacturing plant in the world. The first real conveyor belt in history was born there. Although Henry Ford did not invent the conveyor belt, it had existed in various forms before. He “only” perfected the conveyor belt. Before Ford, a worker moved on a conveyor belt to different workstations, but in his factory it was the other way around – the worker stood still, the conveyor belt moved.
It all started when one day his colleagues gave him a demonstration of a production technique that would help him work more efficiently. A long wooden counter was set up in the middle of the factory and a car chassis was placed on it, with a rope tied to it. One of the workers walked to the end of the counter and started pulling the rope. The chassis slowly slid down the counter, while confused workers stood on either side of it, trying to assemble the various parts.
Ford was not particularly impressed by the unusual scene, but he instructed his colleagues to continue the experiment. The workers’ backs hurt at the beginning, so the counter had to be lowered. Then they complained that the chassis was sliding too fast and the process had to be slowed down. These were two problems that Ford’s colleagues encountered on the first day, but there were many more similar challenges. The experiment lasted for three years, during which time the wooden counter was turned into a steel conveyor belt. This was the beginning of mass production and the first industrial revolution of the 20th century.
The production time has been reduced from 12 hours to an hour and a half. In the year before the introduction of the conveyor belt, Ford built around 70,000 Model Ts, and three times as many the following year. Ford saw optimisation as a constant process, and production grew each year. In 1914, it produced as many vehicles as all its competitors combined. Despite becoming a virtual monopolist, he stuck to his philosophy of lowering prices.
The conveyor belt has become more efficient with each passing year, and the Model T has become cheaper. This was contrary to basic capitalist logic. If you are the only producer of a product that everybody wants, you should raise the price, not lower it. “Every time I lower the price of a car by one dollar, I get a thousand new customers”, was his response to the accusation that he did not understand the basics of capitalism. History tells us that Henry Ford understood capitalism like few others.
Enlightened Capitalist
It’s been six years since the Model T began its unstoppable march, when Henry Ford pulled off a move that shocked America and the world. In January 1914, he announced that he would raise his employees’ wages from $2.35 to a round and incredible five dollars a day. A section of the American public was delighted by his decision and saw him as an enlightened capitalist who wanted to change the country for the better. But there were more who believed that he was going to do enormous damage and set a dangerous precedent.
The outrage provoked by this unusual decision is best illustrated by the headlines of some newspapers – “Ford’s pay rise seeks to introduce spiritual and biblical principles into an area where they have no place”, “Ford has made a mistake, perhaps even a crime, in his social endeavours”, “Ford’s decision is leading to the collapse of the American economy”. Some thought that the billionaire had simply lost his mind. They were all wrong.
Ford did not raise wages because it wanted to lift the American working class out of poverty by its own hand. The motivation that drove him to this outrageous decision was far less noble. One of the major problems facing his company was the high turnover of production workers. Working behind a conveyor belt was not only monotonous but also exhausting. The workers were under constant surveillance and under great pressure. Toilet and snack breaks were timed to the minute and any deviation was punished. Many people did not last long under such conditions. In 1914, for example, Ford had to employ 52 000 workers, even though there were only 14 000 jobs. Introducing and finding new employees was a major cost for the company. But as wages rose, workers’ motivation increased to such an extent that suddenly no one wanted to leave Ford’s factories. The pay rise was nothing more than another Ford optimisation.
This seemingly crazy move has had another positive effect on Ford Motor Company’s business. The news of the wage increase was carried by almost every newspaper in the country. “Ford pays five dollars a day” was free advertising, but no less effective for that. The next day, so many eager people gathered outside the Highland Park plant that they had to be dispersed with a water cannon. Ford had greatly enlarged the pool from which he drew his workers, and five dollars a day was enough to afford the best of them.
Although he was probably not motivated by humanitarian reasons, the decision to raise salaries has had a positive impact on his employees. Workers liked coming to work and were more productive. “Mr Ford pays me USD 2.35 – I make 250 parts. Mr Ford pays me $5 – I make 500 parts,” explained one Ford worker in simple terms.
His competitors reacted to the move, and soon had to give in to the pressure of the staggering five dollars. For many, this pressure was fatal. Ford could afford to raise wages because it had been so successful in all the previous years, and it could be said to have single-handedly contributed to the transformation of the worker from a poor man to a virtual middle-class man. This is probably what Ford had in mind when he talked about inventing the modern age.
War and peace
The dust around his historic decision had barely settled when he was back on the front pages of all the newspapers. War was already raging in Europe and would soon engulf the whole world. As a sworn pacifist, Ford felt obliged to do his part to stop the slaughter. By then, he had already overtaken his legendary car in terms of visibility, and America was watching his every move with interest.
After the decision to raise wages, his next move was even more bizarre – in November 1915, he announced that he would stop the war. He had succeeded in changing the American way of life and he was convinced he could change the world. He was going to travel to Europe with a group of like-minded people and convince the public there of the futility of war. The pacifist delegation was to contact European leaders and lobby for an end to the war in the name of peace.
He chartered a ship, which journalists rechristened the Peace Ship, and set sail with his shipmates for neutral Norway. Apart from high-sounding words, the pacifists had no tangible plan to end the war. None of the European leaders took them seriously. The expedition was more like a Sunday outing than a serious political action. By the time the “ship of peace” arrived in Oslo, Ford had apparently already realised that he was not up to the task this time and was on his way back to the US the very next day. This time, a man who had genuinely noble motives was ‘rewarded’ with ridicule by the American public. He was called a naif and an idealist who imagines himself to be omnipotent.
When the US declared war on Germany in April 1917, Ford changed from a pacifist to a “fighting pacifist”, as he put it. That was when he started to work with the US army and declared that he did not expect to make a penny of profit from it. The taxpayers were to pay only the cost of production. This statement, too, resonated strongly and won him many sympathies.
He kept his promise to the army, building 15,000 Model Ts converted into ambulances and trucks, 7,000 tractors sold to Britain and even 100 small battleships. But it was only a few years later that taxpayers found out that Ford had shamelessly pocketed a hefty pile of greenbacks at their expense.
One step ahead of everyone
At the end of World War I, there were more than one million Model Ts on American roads and the Ford Motor Company was the most successful car company in the country. Behind the impressive numbers, however, lay the poisoned relationship that then existed between Ford and its other owners. Ford owned 51% of the company, but was still convinced that his word did not carry enough weight. All 12 of the original owners trusted his business sense and had become rich thanks to him, but relations began to fray when Ford stopped paying dividends and used the money to build a new, even bigger factory.
Accusations against each other started and the dispute ended up in court, which ruled that Ford had to pay dividends to shareholders and stop construction. At the end of 1918, Ford resigned as chairman of the company. He was succeeded by Edsel, his 25-year-old son. This was another in a series of Ford moves that reverberated across the country. People began to wonder whether the company could survive without its legendary founder.
Ford immediately announced that it would set up a new company and continue doing what it does best – making cars. His car would be better and, above all, cheaper than the Model T. He had enough money to afford it and enough clout for people to trust him. There was panic among the owners of the old company. They thought the company was going to fail and started selling their shares. No one wanted Henry Ford as a rival, but he was, as always, one step ahead of everyone.
The announcement to set up your own business was a well thought out and perfectly executed ruse. The owners sold their shares to Ford, only they didn’t know it. The people buying the shares were on Ford’s payroll. The trick cost him several million dollars, but he was satisfied. In July 1919, he became 100% owner of the Ford Motor Company and never had to take anyone else’s opinion into account again.
Black dot
Although his son Edsel was the company’s chairman, Henry Ford still had the first and last word on all major decisions. Father and son could not have been more different. Edsel was a gentle soul and a man of dialogue. These were qualities that Henry did not have and did not value. Edsel worked hard to prove to his father that he was capable of helping, but Henry never took him seriously. He thought of him as a weakling, incapable of surviving in a harsh world, let alone running such a large company.
Those who knew Ford well noticed that he was becoming increasingly withdrawn. He reacted with anger to any advice or well-meaning criticism. Slowly, almost all the people who had helped him build the world’s biggest car company left him. He was convinced that he was infallible because he was, after all, the richest man in the USA. Perhaps it was this sense of infallibility and omnipotence that was responsible for the biggest black spot in his life.
Ford has built an empire selling cars. Factories bearing his name built cars, trucks and everything in between in Australia, India, Europe and around the world. He built a hospital in Detroit where his workers were treated, a museum that still stands today, a film studio and much more.
In 1919, he also bought a newspaper, the obscure The Dearborn Independent, which within a few years became the target of criticism by much of American society. In addition to the kind of articles you would expect from a factory newspaper, such as a report on the opening of a new plant or a report on car sales, The Dearborn Independent began to publish articles that tried to convince readers that the world was ruled by Jews, who were, on top of everything else, to blame for virtually every problem the average American faced. Some of the headlines: ‘The Jewish Degradation of American Baseball’, ‘How Jews in the USA are Hiding Their Power’, ‘Jewish Jazz – the Butch Music that Became Our National Music’.
In Nazi Germany, these articles were compiled into a book called The International Jew – the biggest problem of our time, which became a huge bestseller elsewhere. Ford’s portrait hung in Hitler’s office when the future firer was still an unknown Munich broadcaster. In 1938, Ford was awarded the Order of the German Eagle in Cleveland, the highest honour a foreigner could receive in Nazi Germany.
Henry Ford was an anti-Semite, which is perhaps not surprising given the time and environment in which he grew up. Indeed, anti-Semitism was quite widespread in the American Midwest at that time. It is somewhat ironic that there were virtually no Jews there. After heavy criticism, Ford stopped publishing the paper and apologised, but the accusations of anti-Semitism followed him throughout his life.
Epilog
In 1927, when the last issue of The Dearborn Independent was published, Ford said, “I am 63 years old and the greatest challenge of my life is before me.” He was not referring to the criticism he had received for his controversial newspaper. He was dealing with a much bigger problem. His company had been experiencing a decline in profits for several years. The car industry was changing rapidly and competitors were catching up. In 1921, there were only three cars on the market costing less than a thousand dollars; five years later, there were 41.
Ford tried to fend off attacks from competitors with a tried and tested method of undercutting, but it didn’t work. People no longer just wanted a car that would get them from A to B, they wanted a car with heating, a sunroof and leather seats. They wanted a car that was nice and different from their neighbour’s. It took Ford, for whom the car was just a means of transport, several years to understand the spirit of the new times.
He was forced to take a difficult decision. He had to break with the past for the good of the company. In May 1927, the last “tin Lizzie” left the factory. Henry was behind the wheel, Edsel in the passenger seat – the past and the future of the Ford family. It was the end of an era and the end of the story of the car that changed America forever.
But Henry Ford was still facing “the biggest challenge of his life”. He announced that he would soon unveil the successor to the legendary Lizzie. All eyes were on him. Car sales dropped for a few months as people waited to see what Ford would come up with. It all started again. Thirty factories around the world, which for 18 years had built only Model Ts, had to replace all their machinery. For the first time in years, Ford was back to its core business – how to make a car. And to everyone’s surprise, he left the exterior design to Edsel.
At the end of 1927, a new car with a simple, you could say Ford-esque name – the Model A – rolled out of the Detroit factory. It shared a name with its predecessor, which Ford had built in 1903, in a different era. The new Model A was a great car in every respect, technically sophisticated, powerful and even beautiful. It was well received by the public, as evidenced by the 400,000 orders in the first two weeks.
Ford pulled the company out of the abyss in which its stubbornness and short-sightedness had left it. It was his last major victory. Compared with the days when he had upset the American and world public with his unorthodox moves, he spent his old years in relative peace. The man who invented the modern age died on 7 April 1948.
