Henry Ford: Early Nineteenth Century Economic Influence

Abstract

It is nearly impossible to discuss the evolution of industry and economics in the early nineteenth century without mentioning Henry Ford, best known for pioneering the assembly line and creating and making the Model-T a mass-produced vehicle that became available to the masses. Not only did Ford have a profound economic influence on industry, but he fundamentally changed the way that people lived through, as put by Vincent Curcio, his “democratization of prosperity.”[1] Ford found new ways to improve materials, make products that were enjoyed by all, even the working-class people who produced them, and strived to create a living wage that was not only a benefit to those earning it but to the company employing them as well.

 

Ford Motor Company

The Ford Motor Company was started in 1903, the company was capitalized at $150,000 which was divided amongst 15,000 shares[2] of which Ford owned twenty-five percent[3], this was necessary for Ford to gain the money that he would need to get the company off the ground. The creation of Ford Motor Company came after two previous automobile companies of his, The Detroit Automobile Company (1899) and the Henry Ford Company (1901), had failed and only three years after the automobile business had developed in America.[4] Despite the failure of Ford’s earlier automobile business endeavors, the Ford Motor Company produced 1,708 cars in its first year and by 1920 this production had expanded to 996,660 cars and 79,013 tractors with a daily output of cars over 4,000.[5] With the growing success of the company, Ford increased his share to fifty-one percent in order to have complete control over the policies and by 1919 he had purchased the remainder of the shares of the company.[6] With his newfound control of the company, Ford was able to develop and produce the Model T and pioneer the creation of the assembly line, a new system that would boost the efficiency of production which made goods more affordable and accessible.

The Model T & The Assembly Line

Though a group of men of various specialties worked together to design and produce the Model T, the idea itself belonged solely to Ford who was involved in every part of its creation.[7] The idea behind the Model T was to create a lightweight, easily maneuverable yet durable family car. The car featured many new innovations to make the car more appealing including a high body design and flexible frame to account for the poorly maintained muddy roads of the time, left-hand steering to allow drivers better visuals of oncoming traffic, and many technical innovations to the engine allowing the automobile to be powerful as well.[8]

After the initial announcement for the Model T with its $850 price, the company received around 15,000 orders in only a few days,[9] and with the development of the assembly line Ford was able to drop the price down to $298 by 1923 with the car then accounting for fifty-five percent of the automobile production in America.[10] The idea of the assembly line began in 1908, and was initially forgotten, but as time went on and the number of orders needing fulfillment increase it became necessary to find a quick and efficient method for production. In 1913 the company had almost 200,000 cars that needed to be assembled and in order to do this, the assembly line was implemented in April and by November of that year assembly time was cut by sixty percent.[11] This innovation in production paid off for both Ford who was able to produce automobiles much more quickly and efficiently increasing profits, and for the American people because it allowed for a drop in price which took the automobile from being a privilege of the wealthy to something that was attainable for the regular working people.

 

Five-Dollar Work Day

In addition to his innovations to the production of automobile, as well as his drastic price-cuts to the product itself, Ford also was interested in changing the view on wages. Ford believed that profit and production could be positively impacted by proper labor management and in 1914 he announced the Five Dollar Day which was almost double the normal salary at the time.[12] Ford felt that by offering families living wages this would increase their productivity and loyalty to the company and ultimately continue to drive profits forward. These ideas changed both the economic and social structures of the American family. His focus on creating a happy and productive workforce shaped the family dynamics in the country by creating livable wages that considered the domestic contributions of the women at home. Ford was aware that the women at home provided for their husbands, the workers, and that the husbands in term provided for the women through there work. With this knowledge Ford felt that it was necessary for companies to focus not just on taking care of their employees but taking care of their entire families by providing wages that would allow employees to do so.[13]

Conclusion

Overall Henry Ford had profound economic and social influence through the creation of Ford Motor company and his desire to continue to innovate. Much of his impact was felt by the middle class of early nineteenth century America through the increase in wages, jobs and purchasing power that came from the innovations and ideas that Henry Ford employed.

 

References

Curcio, Vincent. Henry Ford. New York: Oxford University Press, 2013. https://ebookcentral.proquest.com/lib/liberty/reader.action?docID=1164139&ppg=5.

 

Horgan, John J., “Henry Ford: Captain of Industry,” Studies: An Irish Quarterly Review 10, no. 39 (September 1921): 437-450. https://www.jstor.org/stable/30093028.

 

May, Martha, “The Historical Problem of the Family Wage: The Ford Motor Company and the Five Dollar Day,” Feminist Studies 8, no. 2 (Summer 1982): 399-424. https://doi.org/10.2307/3177569.

 

Wells, Christopher W., “The Road to the Model T: Culture, Road Conditions and Innovation at the Dawn of the American Motor Age,” Technology and Culture 48, no. 3 (July 2007): 497-523. https://www.jstor.org/stable/40061274.

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[1]Vincent Curcio. Henry Ford. New York: Oxford University Press, 2013. https://ebookcentral.proquest.com/lib/liberty/reader.action?docID=1164139&ppg=5.

[2] Ibid 41.

[3] John J. Horgan, “Henry Ford: Captain of Industry,” Studies: An Irish Quarterly Review 10, no. 39 (September 1921): 441. https://www.jstor.org/stable/30093028.

[4] Ibid 22-39.

[5] John J. Horgan, “Henry Ford: Captain of Industry,” Studies: An Irish Quarterly Review 10, no. 39 (September 1921): 437. https://www.jstor.org/stable/30093028.

[6] Ibid 441.

[7] Vincent Curcio. Henry Ford, 58. New York: Oxford University Press, 2013. https://ebookcentral.proquest.com/lib/liberty/reader.action?docID=1164139&ppg=5.

[8] Ibid 58-78.

[9] Ibid 65.

[10] Christopher W. Wells, “The Road to the Model T: Culture, Road Conditions and Innovation at the Dawn of the American Motor Age,” Technology and Culture 48, no. 3 (July 2007): 497-523. https://www.jstor.org/stable/40061274.

[11] Vincent Curcio. Henry Ford, 58-78. New York: Oxford University Press, 2013. https://ebookcentral.proquest.com/lib/liberty/reader.action?docID=1164139&ppg=5.

 

[12] Martha May, “The Historical Problem of the Family Wage: The Ford Motor Company and the Five Dollar Day,” Feminist Studies 8, no. 2 (Summer 1982): 412-413. https://doi.org/10.2307/3177569.

[13] Ibid 416.