He, born this day 150 years back, was the man who transformed a potentially untapped sphere into a pompous business, mass-produced and lucrative car industry that we see today.
His story of how a car was made as a mean to social and cultural change is rather implausible. He was admired by clutches of entrepreneurs and they incorporated his business model into the production of almost all consumer goods. More than anything, it is always jittering for me to see “Ford” logo on the steering wheel of my Fiesta, as it makes me to recollect the impact that this brand has made to the industry. I feel proud to be related to it someway!
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Henry Ford, co-founder of Ford Motor Company, never invented automobiles as many would have thought. In fact, by 1902 there were at least 50 companies in the US selling cars to the consumers as high-end luxuries, which were normally expensive to purchase and own. But, it was his insights into the vast expanding middle class market in the US, who constituted more than 95 percent of population for whom owning a car would never show up. He was quite aware of the potentiality of the transportation needs and the car dreams of the large population, but that day’s production system was incapable and there was higher risks involved. He identified the car needs of the non-consumers (which was fundamentally different than the job for which most early cars were being built). He was led by customers to develop a simpler, cheaper, and more reliable productivity tool, rather than competing with the luxury market. In 1909, he announced,
|The legendary 1914 Model T Ford|
“I will build a motor car for the great multitude… it will be so low in price that no man making a good salary will be unable to own one”.
October 1st the same year saw the production of a car from his Detroit facility, significant on several fronts that became historic. ‘Model T Ford’ became the first mass-produced automobile on a moving assembly line with completely interchangeable parts. Considered as the first affordable car, it entered the homes of the middle class, capable enough to wade through the not yet widely motorable roads of America.
Henry Ford is considered to be the most noteworthy entrepreneur of the 20th century. He was an innovative, clever and brilliant capitalist. He took advantage of the plentiful supply of unskilled rural migrants, in the time of shortage of skilled workers in the industry. He reduced the movement of workers while manufacturing by switching from non-linear and stationary production to progressive moving assembly line method that dominates even today. He reduced the work hour to eight and doubled the wages to $5 per day, as an exercise in social engineering. His policy for the social control of workers aimed at reducing the exceptionally high labour turnover,and absenteeism. His economic model brought down the price of the car from $850 in first year of make to less than $300 by 1923. He sold more than 10 million T-models, making 75 percent of Americans to own cars! He became the world’s first self made billionaire of his times (Levinson, 2002: 49).
|Ford employees had phenomenal social recognition in the American society during 1920s|
Ford retained best engineers and talented persons with him who were passionate about their business as he was. In fact, it was William Klann, not Ford, who brought the assembly line into Ford
Motor Company after viewing the “disassembly line” of a Chicago
slaughterhouse, where animals were butchered as they moved along a
conveyor. He was open to ideas from others and other industry.
Though his model could not last long, it had an interminable impact on the way we saw cars, producing them, marketing and technologies and products variations involved in the process. The model was incapable of overcoming both workers and consumer dissatisfaction. Consumerism led by Fordism is clearly visible in scores in the auto industry today.
What makes him fairly important in the automobile history was not the induction of new technologies in his cars or not even the new process of making them, but it was his vision into the needs of the large untapped potential consumers of his times. For which he created a powerful, new business model that benefited from the enhanced productivity out of division of labour and mass consumption. Ironically, Ford was not flexible and innovative to the changing wants of the customers created by his own business model and saw an unforeseen conclusion. Nevertheless, Fordism forced auto industry to adopt a more flexible system of manufacturing and marketing in the latter years that led to the massive development in the auto industry today.
Also Read: This Guy Who Invented Cruise Control Was Blind: Ralph Teetor
Image Courtesy: www.fordmodelt.net, www.henryford150.com, www.wikipedia.org