UK: BUSINESS LEGENDS - HENRY FORD'S CHARIOTS OF DESIRE.

UK: BUSINESS LEGENDS - HENRY FORD'S CHARIOTS OF DESIRE. - Automobiles were once sybaritic chariots of the rich. Until, that is, the arrival of Henry Ford's democratic Model T car, a vehicle for social change like no other.

by Rhymer Rigby.
Last Updated: 31 Aug 2010

Automobiles were once sybaritic chariots of the rich. Until, that is, the arrival of Henry Ford's democratic Model T car, a vehicle for social change like no other.

Like most great men, Henry Ford's resume was a varied one: inventor, mechanic; empire-builder, tycoon; paternalistic autocrat and misguided peacenik; luckless political candidate, and vicious anti-Semite. But, above all, it is for his engineering exploits, and more specifically one car, that he is remembered.

As is proper for an American folk hero, Ford had humble beginnings. He was born in 1863 to a farming family near Detroit, and at 16 began work in a machine shop. Other jobs followed, but the young Henry always made time for his passion - mechanical invention. By 1893, he was chief of Detroit's Edison company with responsibility for the city's electricity. Although 'on call' 24 hours a day, in practice he could do more or less as he pleased.

By the end of that year he had built a petrol engine, and in 1896 unveiled his first horseless carriage or 'quadricycle'. It was the first of many inventions. Over the next few years, he enjoyed the backing of various businessmen but they always ditched him in the end. They wanted a marketable car. Ford, with an inventor's disregard of commercial realities, replied that improvements were still needed and he wasn't ready.

Come 1903, however, Ford was ready. With a mere $28,000 at his disposal, he incorporated The Henry Ford Company. This quickly became successful, to the great displeasure of the Association of Licensed Auto Manufacturers of which Ford was not a member. The Association took him to court, arguing that the original American 'gasoline' engine had been patented in 1895 and only those licensed by the inventor were free to use it. Ford replied that this was nonsense: invention could be an evolutionary process. He lost the case in 1909 but won on appeal in 1911, his victory over the automotive Goliaths making him a popular hero.

Despite the legal battle, Ford had not neglected business. In 1908 he announced his intention to 'build a motor car for the great multitude'.

Called the Model T, it would in time account for 50% of global auto production and sell over 15 million units in the US alone. These were Ford's finest years: his car represented a social revolution. Before its arrival cars were sybaritic chariots of the rich. The Model T was priced in order to appeal to the widest possible market. Its manufacturer paid his workers over twice the going rate, earning him both praise for his humanitarianism and scorn for being a socialist. The costs were made possible by the efficiencies which Ford introduced: the world's first production line. The economies of scale were remarkable, and the Model T's price fell from $950 in 1908 to $290 in 1927.

Ford's dreams of expansion suffered a setback, however, when the Dodge brothers (chassis suppliers and shareholders) took him to court over his use of profits. This time Ford lost. The court ruled that, while his commitment to employees and customers was laudable, shareholders came first. In a fit of pique, Ford installed his son, Edsel, as 'nominal' president, and threatened to walk out. The sabre-rattling had the desired effect, and by 1919 he had bought out the other shareholders at a cost of over $120 million.

With the troublesome shareholders out of the way, Ford set about fulfilling his vision. Difficulties with his suppliers convinced him that he must do without them, and his new River Rouge plant was a model of vertical integration. Cars needed metal: Ford bought mines, acres of forest and glassworks and rubber plantations. And because these things also needed transport, he bought a railroad and a fleet of ships. Nor was Ford dependent on bank loans for his purchases. So lucrative was the car that he owned the lot outright.

Ford's paternalistic approach was ultimately his undoing. In his later years he ran the company like a feudal lord, even meting out violence to potential union organisers. By the '20s, the company was no longer out in front, the Model T having been superseded by more innovative cars.

Its replacement, the Model A, failed to enjoy the same success.

The company's fortunes continued to sink until buoyed up by the demands of the second world war. Having once relinquished executive powers in favour of his son, Ford resumed the presidency after Edsel died in 1943, then two years later he transferred the reins to his grandson, Henry Ford II. On his own death in 1947, his shares in the company passed to the Ford Foundation, which is now one of the richest philanthropic institutions in the world.

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