Modern Americans know Henry Ford as the man behind Ford Motor Company, and most would probably credit him with the invention of the modern assembly line. Ford’s contribution to (and effect upon) American manufacturing in general is much more grand and goes beyond the mechanics of assembly. His vision, and the manner in which he approached achieving it, is truly his legacy.
Like most new technologies, automobiles were initially built and sold as dalliances or even appliances for the wealthy. Today, we recognize how so-called early adopters pay more to be the first to have the latest high-tech gadgetry. Things weren’t so different 100 years ago when “horseless carriages” first appeared. However, Ford’s entire approach, from the company’s method of manufacture to the eventual reductions in the price of his products, was part of an overall effort to sell to the masses.
Ford recognized that the ability to sell great quantities would multiply the profits they were capable of generating. His constant quest for manufacturing efficiency would also contribute directly to the bottom line, and this driven desire would rival his engineering acumen. One of the better-known examples of this does not even relate to the assembly-line process as we know it, but rather to Ford’s interest in the materials of which his vehicles were made.
Naturally, Ford relied upon subcontractors to supply some of the components used in his new cars. As part of their contractual agreement, Ford specified the dimensions and even the type of wood to be used in the crates in which these parts were to be shipped. Once the crates arrived at the assembly plant, Ford forbade the use of crowbars to open them. Rather, he insisted they be carefully disassembled.
In those early days of the automobile, wood was a common material used throughout the body, doors, and especially for the running boards. This was particularly evident in the legendary “Woody” station wagons produced from the 1920s through the early 1950s. The wood reclaimed from the shipping crates was reused for this purpose, and in many cases was already sized properly (per Ford’s contracted specifications). Not wanting to waste any wood, what few scrap pieces were left over were then further compressed into usable charcoal “briquets.” There was a large enough quantity of charcoal being produced that Ford decided to create a business to market it, and thus the Ford Charcoal was born. Today, we know this enterprise as Kingsford Charcoal, named after a Ford relative of who brokered the site selection for Ford’s new charcoal manufacturing plant.
That kind of progressive development in the name of efficiency wasn’t limited to what went out the door at the massive Ford Motor Company factories. The way in which raw materials were supplied to the plant also grew into more efficient and streamlined processes over the years. Rather than relying upon outside suppliers for steel to build his vehicles, Ford built his own foundries at which raw ore could be smelted and forged into various components. Furthermore, Ford eventually purchased the iron ore mines and the ships used to transport the raw materials to the factory. In this way, Ford could absolutely minimize prices and maximize quality, resulting in an unprecedented level of manufacturing excellence on a scale never before seen, worldwide.
Interestingly, and importantly, Ford chose not to simply line his own pockets with the ever-growing profits of his visionary leadership. Rather, he invested heavily in the growth of his own company and his own workforce, while simultaneously lowering the prices on many of the vehicles being produced. In 1909, a new Model T Touring car (the most popular model) could be had for $850. This was reduced to $490 in 1914, and by 1925 the price had been slashed to $290. Making the cars more affordable had a positive impact on sales, resulting in a significant jump in the quantity of vehicles sold.
With regard to the workforce, we must understand the challenges Ford was facing to fully comprehend the impact of his investment in this vital area. In the early part of the 20th century, a great percentage of the workforce consisted of unskilled immigrants. The typical solution was to break down assembly-line tasks into simple steps, and offer very low pay to several employees to accomplish each of them. The predictable result was that the workers would quickly grow bored of the mindless, repetitive tasks. Many workers would quit, and in 1913 it took the hiring of 963 employees for every 100 positions Ford needed to keep the assembly line working. Considering there were 13,600 employees in the plant at the time, the scope of the issue becomes apparent.
Ford’s solution was multifaceted. A broad array of benefits was created, including incentive bonuses, a medical clinic, and athletic fields and playgrounds for the workers’ families. Still, the challenge of retention persisted, and Ford’s next step was a huge one.
On Jan. 5, 1914, Ford announced all employees would receive a minimum of $5 pay for eight hours of work. This was more than double the previous $2.38 offered for a nine-hour shift, and was such a dramatic increase that it attracted workers from all over the nation. The tremendous response not only solved the retention issue, but profits increased as well. Between 1914 and 1916, the company’s profits doubled from $30 million to $60 million. The higher pay rate crossed another threshold, as workers could now afford the new Ford vehicles they manufactured, and many did.
Henry Ford’s contributions to American manufacturing were great, but beyond the obvious mechanics of the mass production assembly line, his visionary approach to maximum efficiency in all areas was just as important. Through a constantly evolving process of improvement, Ford set new standards for manufacturing that still reverberate today.
Scott Parkhurst, a freelance writer from Belle Plaine, Minn., specializes in automotive issues.