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. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one.
Henry Ford
When I conceived of this list last December, the first thing I did was sort about a hundred historical figures by profession. For the most part, each figure was easily placed under categories like statesmen, philosophers, scientists, and inventors.{{1}} When I came to Henry Ford, however, I hesitated.
Ford wasn’t exactly a scientist, nor can we say he lived his life as an inventor. He didn’t invent the car, nor did he invent the combustion engine, assembly line, mass production, or interchangeable parts. While he was a tinkerer, no single invention of his changed the world.
Henry Ford was an entrepreneur who changed the world by catapulting his United States into the lead of an industrial race that dated back decades. In the wake of this transformation was an American consumer culture that created the world’s largest economy. Due to the groundwork laid by Ford, the U.S. surpassed the other industrial nations, and it hasn’t looked back since.
The automobile, dubbed a “horseless carriage” by contemporaries, was invented in 1885 by German inventor .{{2}} By then, Henry Ford had lived 22 years in a slow-moving world. He grew up the son of a farmer, William Ford, who had hoped that Henry would someday take over their farm in Dearborn, Michigan. If that was his goal, then he erred when he gifted a 15-year-old Henry a pocket watch. The boy dismantled it and put it back together. After then doing the same to watches of friends and family, he knew his calling was as a machinist. He dropped out of school at 16, moved to Detroit, and worked as a machinist’s apprentice and a repairman. In 1896, at the age of 33, he designed his first car.{{3}} Two failed business ventures later, he was 40 years old and nowhere near influential.
But then he was visited by the American dream. He tried again. In 1903, with the help of, an old friend and Detroit coal dealer who was impressed by Ford’s latest automobile —which racer had driven to a racing cup’s first place—he started the . Oldfield’s successes helped attract investors, and Ford redoubled his efforts on a new design.
Ford’s greatest gift at this early stage of his career was that of an analyst. He studied how cars were created, how they functioned, and, just as important, how their parts were created and functioned.{{4}} By 1908, he used the recent industrial trends of an assembly line and interchangeable parts in order to assemble a car more quickly than anyone had done before. In 45 steps, his workers could manufacture an automobile in just over 90 minutes, down from the nearly 13 hours it took earlier in the decade. Thus, just five years into Ford Motor Co., he was ready to unveil the car that would change the world.
What’s most fascinating about the original is not its breakthrough affordable price; rather, it was how Ford was able to make its price so low and yet still make unprecedented profit. Two years into Ford Motor Co., Ford’s investors told him that the way to increase profits was to make a car that rich consumers felt compelled to buy. They, after all, had the money in a time where the Industrial Revolution excelled at suppressing the wages of expendable workers.
If a process could be simplified to save a second, Henry Ford ordered the modification.
Ford, however, had something else in mind. He felt that the way to maximize profit wasn’t to appeal to the tiny American upper class of the early 1900s; it was by appealing to the millions of workers that kept the upper class afloat. Ford is so often associated with mass production, and rightly so, but what is often overlooked is his ability to drive mass consumption. He didn’t want to have the car loved by the rich; he wanted to have the car loved by everyone.
In order to make sure he could keep his cars affordable, he needed to cut every possible cost while still maintaining a safe and fluid environment that would otherwise slow down production. Therefore, in addition to interchangeable parts and the assembly line, he created a sharp division of labor. It was imperative not to waste a second of a worker’s time, for that slowed down the belt that needed constant motion to maximize production. Assembly line workers were not responsible for getting their own parts, materials, or tools. Another worker did that for them. Ford even reduced the time it took to get extra parts and materials to their proper locations. Instead of runners, intricate modes of slides and trolleys transported whatever was needed. The height of the belt itself was where he thought it would be easiest for workers to stand for extended periods of time. He eliminated time-consuming motions like bending over or reaching up to grab something. He tirelessly analyzed the process, micromanaging his plants as if his entire life depended on that day’s batch of Model Ts. If a process could be simplified to save a second, Henry Ford ordered the modification. The result was a worker who almost certainly had only one task to do throughout his or her day, and this task likely took little to no training. Ford confronted all possible time wasters and promptly reduced or eliminated them.
It should be noted that Ford invented none of these tactics. had, a century earlier, popularized interchangeable parts, while had already preached this method of meticulous analysis, called . Still, no one before Ford had combined them so effectively and on such a scale.
Meanwhile, Ford unleashed yet another brilliant move that would help saturate the market with his cars. He gave his workers raises. As his production rate and sales climbed in the early 1910s, Ford could afford to pay his employees more. In 1914, he more than doubled their minimum wage to five dollars a day. Imagine getting your salary doubled now, and you can imagine what this wage hike did to their disposable income. His workers quickly joined the suddenly growing middle class, and with this extra income, they bought more cars.{{5}} This strategy also increased worker loyalty and decreased worker turnover, which kept the company stable and humming.
These policies epitomized two core tenants of that later companies adopted. Ford and Chrysler legend nicely sums up Ford and his raises: “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 . . . It was a virtuous circle, and he was the ring master.”
Other factors contributed to Ford’s success. He understood . He also branched out into the rubber and steel industries to further control his means of production. The Model T, therefore, was produced at the lowest possible cost, and part of this savings could be lopped off its retail price. In 1908, one could buy the earliest Model Ts for $825. Over the next five years, the price plummeted to $500. By 1916, it was $360, and by 1924, it bottomed out at $260. As the price dropped, sales did the opposite, sometimes doubling in a year. By 1918, ten years after the car’s debut, half the cars in the country were Model Ts. Henry Ford, the dropout son of a Dearborn farmer, was the richest man in America. The Ford Motor Co., ultimately sold 15 million Model Ts, a record for any car model that stood until the 1970s.
