Driving Force: Henry Ford

He produced an affordable car, paid high wages and helped create a middle class. Not bad for an autocrat

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His vision would help create a middle class in the U.S., one marked by urbanization, rising wages and some free time in which to spend them. When Ford left the family farm at age 16 and walked eight miles to his first job in a Detroit machine shop, only 2 out of 8 Americans lived in the cities. By World War II that figure would double, and the affordable Model T was one reason for it. People flocked to Detroit for jobs, and if they worked in one of Henry's factories, they could afford one of his cars--it's a virtuous circle, and he was the ringmaster. By the time production ceased for the Model T in 1927, more than 15 million cars had been sold--or half the world's output.

Nobody was more of an inspiration to Ford than the great inventor Thomas Alva Edison. At the turn of the century Edison had blessed Ford's pursuit of an efficient, gas-powered car during a chance meeting at Detroit's Edison Illuminating Co., where Ford was chief engineer. (Ford had already worked for the company of Edison's fierce rival, George Westinghouse.)

After the Model T's enormous success, the two visionaries from rural Michigan became friends and business partners. Ford asked Edison to develop an electric storage battery for the car and funded the effort with $1.5 million. Ironically, despite all his other great inventions, Edison never perfected the storage battery. Yet Ford immortalized his mentor's inventive genius by building the Edison Institute in Dearborn.

Ford's great strength was the manufacturing process--not invention. Long before he started a car company, he was an inveterate tinkerer, known for picking up loose scraps of metal and wire and turning them into machines. He'd been putting cars together since 1891. Although by no means the first popular automobile, the Model T showed the world just how innovative Ford was at combining technology and markets.

The company's assembly line alone threw America's Industrial Revolution into overdrive. Instead of having workers put together the entire car, Ford's cronies, who were great tool- and diemakers from Scotland, organized teams that added parts to each Model T as it moved down a line. By the time Ford's sprawling Highland Park plant was humming along in 1914, the world's first automatic conveyor belt could churn out a car every 93 minutes.

The same year, Henry Ford shocked the world with what probably stands as his greatest contribution ever: the $5-a-day minimum-wage scheme. The average wage in the auto industry then was $2.34 for a 9-hr. shift. Ford not only doubled that, he also shaved an hour off the workday. In those years it was unthinkable that a guy could be paid that much for doing something that didn't involve an awful lot of training or education. The Wall Street Journal called the plan "an economic crime," and critics everywhere heaped "Fordism" with equal scorn.

But as the wage increased later to a daily $10, it proved a critical component of Ford's quest to make the automobile accessible to all. The critics were too stupid to comprehend that because Ford had lowered his costs per car, the higher wages didn't matter--except for making it feasible for more people to buy cars.

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