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The genius of
Henry Ford
(how his business skills still impact today)
48/2016
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forbesdesign
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The genius of
Henry Ford
WHY HE MATTERS
THE EARLY YEARS
Henry Ford, born July 30, 1863, Michigan,
USA was an American industrialist who
revolutionised factory production with his
assembly-line methods.
In his early career, Ford was made chief
engineer at the main Detroit Edison
Company plant with responsibility for
maintaining electric service in the city 24
hours a day. Because he was on call at all
times, he had no regular hours and could
experiment to his heart’s content. He was
determined to build a gasoline-powered
vehicle, and his first working gasoline engine
was completed at the end of 1893.
Ford spent most of his life making headlines,
good, bad, but never indifferent. Celebrated
as both a technological genius and a folk
hero, Ford was the creative force behind an
industry of unprecedented size and wealth
that in only a few decades permanently
changed the economic and social character
of the United States.
Henry Ford laid the foundations of
twentieth century businesses. The
assembly line he designed became the
century’s characteristic production mode,
eventually applied to everything from
records/CDs to hamburgers. High wage,
low skilled factory jobs pioneered by Ford
accelerated both immigration from overseas
and the movement of Americans from the
farms to the cities.
By 1896 he had completed his first horseless
carriage, the “Quadricycle,” so called because
the chassis of the four-horsepower vehicle
was a buggy frame mounted on four bicycle
wheels.
Ford had been trying to increase his
factories’ productivity for years. Step-bystep his streamlining process got better but
he was still building cars like everyone else.
By 1913, Ford got an idea that drastically
changed the whole process.
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ASSEMBLY LINES
REVOLUTION
Ford was observing the manufacturing of
the cars when he thought to himself that
employees were moving to the tasks that
needed to be done and spending extra time
on that movement. By asking, ‘how can the
tasks come to the employees?’, Ford got the
idea of using an assembly line to produce the
cars more efficiently. From building a car in
12 hours, this was now reduced to 2.5 hours.
The Model T made its debut in 1908 with
a purchase price of $825.00. Over 10,000
were sold in its first year, establishing a new
record. Over the next five years, the price
plummeted to $500. By 1916, it was $360, and
by 1924, it bottomed out at $260. But as the
price dropped, sales did the opposite,
sometimes doubling in a year.
“I will build a motor car for the great
multitude,” Ford proclaimed in announcing
the birth of the Model T in October 1908.
“It will be large enough for the family, but
small enough for the individual to run and
care for. It will be constructed of the best
materials... but it will be so low in price that
no man making a good salary will be unable
to own one.”
In the 19 years of the Model T’s existence,
he sold 15,500,000 of the cars in the United
States, almost 1,000,000 more in Canada, and
250,000 in Great Britain, a production total
amounting to half the auto output of the
world.
The Model T was easy to operate, maintain,
and handle on rough roads. It immediately
became a huge success. Henry and his team
borrowed concepts from watch makers, gun
makers, bicycle makers, and meat packers,
mixed them with their own ideas.
However, Ford workers objected to the
never-ending, repetitive work on the new
line. Henry responded with his boldest
innovation - in January 1914 he virtually
doubled wages to $5 per day. These policies
epitomised two core tenants of welfare
capitalism that later companies adopted.
He figured that if he paid his factory workers
a real living wage and produced more cars
in less time for less money, everyone would
buy them!
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THE GREAT DEPRESSION
‘FORDISM’
By the late 1920s, after the Model T’s
inevitable slowing of sales, Ford came out
with the Model A. Though successful, it
was no Model T. The Model A marked the
beginning of Ford’s slow decline from his
two-decade long reign as America’s
greatest businessman.
Henry Ford was not an inventor.
He was an innovator. He didn’t invent the
car; he reinvented it. By lowering costs
as much as he did, he was able to sell it
to the common American, his employees
first and foremost. Ford wasn’t exactly a
scientist, nor can we say he lived his life as
an inventor.
In 1932, at age 69 Ford introduced his last
great automotive innovation, the lightweight, inexpensive V8 engine. Even this
was not enough to halt his company’s
decline. By 1936 Ford Motor Company
had fallen to third place in the US market,
behind both General Motors and Chrysler
Corporation.
When World War II began in 1939, Ford,
who always hated war, fought to keep the
United States from taking sides. But after
the Japanese attack on Pearl Harbour, the
Ford Motor Company became one of the
major US military contractors, supplying
airplanes, engines, jeeps and tanks.
Relevantly, Ford did not keep his
production methods a secret. He wrote
about them. He showed them off. Seeing
a chance for good publicity, he invited
people into his factories.
Other manufactures emulated his tactics,
and “Fordism” eventually branched out
into other companies and industries.
From MacDonalds to Apple, even the likes
of Ryanair and Easy jet, the legacy of
Henry Ford lives on.
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DID YOU
KNOW?
“You
can’t
build a reputation on what
you are going to do.”
Henry Ford
DID YOU KNOW?
Although Henry Ford wasn’t
exactly tea total, he was health
oriented in his lifestyle.
He once published a book,
‘The Case Against the Little White
Slaver’ (1914) against cigarettes,
documenting the dangers of
the habit, backed up by research
of the time.
Henry Ford never believed in
using accountants, as he felt that
they weren’t productive enough
and figured that they would
ultimately end up costing him
more money than they were
worth.
Henry Ford and Ford Motor
Company, was one of the
first corporations to establish
a publicity machine that ensured
that the company name was
known nationwide, through
newspaper stories about the
company’s
Ford’s ambition to develop an
environmentally friendly car led
to the production of the concept
car, the Soybean car; otherwise
known as the Hemp body car,
in 1941.
Although it had a number of
positive elements – it weighed
30% less than cars made of steel –
the machine never caught the
public’s attention.
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