How can corporations today learn from policies of Henry Ford? At the end of the nineteenth century in the United States began the industrial revolution, this completely changed life in cities and the countryside. The automobile industry was a big part in this revolution in which Henry Ford played a key role. Henry Ford and his Model T revolutionized the manufacturing industry in America. This created jobs for middle class and allowed them to buy things that they wanted instead of needed and this created consumerism that exists today.
Henry Ford, a famous American industrialist and the founder of the Ford Motor Company which revolutionized the automobile industry, began his professional journey in 1891 as an engineer in the Edison Illuminating Company. During this period he started his experiments on gasoline engines. After some success and some failure, he created the Ford Quadricycle in 1896. After creating the first Ford vehicle, Thomas Edison encouraged him with the words, "Young man, that's the thing! You have it! Your car is self-contained and carries its own power plant" (Zacharias). This success led Henry Ford to further attempts at creating a car company.
His earliest companies like the Detroit Automobile Company and the Henry Ford Company (later renamed the Cadillac Automobile Company) were not successful. In 1903 he formed the Ford Motor Company (that still produces cars today). The success of the Ford Motor Company can be attributed to the construction of the Model T which was the cheapest and most popular car in the United States. "By 1927, Ford had produced more than 15 million Model Ts" (Goff 148). The popularity of the Model T revolutionized the transportation of people and goods and created the new type of delivery that exists today.
The Model T changed people's view on how things were transported and how people traveled. "They recognized the potential of automobiles to do things other transportation modes could not do" (Casey 10). The car enabled people to travel much further afield than foot or horse had permitted. Ford's innovative Model T brought mobility within the reach of the average person in the United States. The popularity of the automobile was increased by favorable reviews in magazines and newspapers such as Harper's Weekly, "the feeling of independence - the freedom from timetables, from fixed and inflexible routes...
the ability to go where and when one wills" (Urgo 101). Such articles changed the consumer mindset to view the car as a necessity. The Model T was the first low-priced, reliable, mass-produced automobile with standard, interchangeable parts. Before this vehicle, the first "horseless carriages" were regarded as a luxury items. Modern manufacturing techniques can be credited to Henry Ford and the innovation of the assembly line. "In a Ford plant, there was no wasted motion. Workers stood in one place all day, while a conveyor belt brought the work to them" (Goff 149).
The assembly line divided the job into eighty four steps, every worker had one or two jobs of his own, and that shortened time for building the Model T to six hours. Even today, all modern car production uses the assembly line; even ultra-high-tech car production such as Ferrari. Also, other factories outside the car industry, producing products such as IPad, HTC phones, and Sony TV, use the technique of the assembly line. The assembly line was updated for producing other goods but its main idea of bringing the work to laborers stays unaltered.
With the assembly line Henry Ford strongly influenced on the technical part of the automobile industry. And with his five dollar-a-day he exerted deep influence on social part of the industry. It changed the American manufacturing industry by paying the workers more than the living wage. "It was believed that influencing the behavior of employees at home would turn them into better workers. All employees over twenty two were eligible for the plan, which included a shortened work day from nine to eight hours in addition to the opportunity to earn five dollars per day" (The Five Dollar Day).
Why was this significant? Henry Ford's five dollar-a-day showed workers in other companies that they could earn two times more than their regular wage. The workers quit and went to the Ford Motor Company for better opportunities. Other companies tried to survive and increased wages. This for its turn led to the great migration of rural population to the cities. Henry Ford and the Model T were significant in the process of transforming America from an agricultural country to industrial. "With Henry Ford's implementation of the assembly line a new era in industrial history had begun" (Henry Ford Changes…).
People began to arrive in cities looking for jobs in manufacturing which offered benefits and good wages. Living on farms, they could earn little money for their hard and long work. There were no opportunities and their children could not get an education. And there was little electricity and no entertainments like in cities. Compared to 1880, the total population of the United States in 1920 doubled; the urban population also grew from 28. 2% to 51. 2%: Population in the USA (U. S. Population) Year Total Urban(%) 1880 5,308,483 6. 1
1900 50,189,209 28. 2 1920 106,021,537 51. 2 The growing urban population and popularity of the Model T changed cities. Increased manufacturing created more jobs and that required more workers. People looking for jobs arrived in cities that caused the need for cities to grow and build more houses. New technology in steel production allowed building the skyscrapers, symbols of power and prosperity. The growing amount of the automobiles needed new streets and highways or roads adapted for them. "Trolleys and horse-drawn vehicles outnumber cars in 1911.
Urban areas were not initially fertile markets for automakers" (Casey 10). The increasing urban population and needed different stores, social services. Vehicles required much higher road clearances than modern cars due to the poor state of roads and tracks. Breakdowns were fairly common. Tourist parks (Motels) and other facilities sprang up to service the needs of travelling motorists. Petrol station chains cashed in on the trend by supplying maps that highlighted their business locations, and then sold travellers food and drink as well as petrol and oil (1920's Automobiles).
The face and structure of cities in the United States changed. Henry Ford's five dollar-a-day method also had a social effect on life in America. By raising the wages of his factory workers Ford enlarged the potential market for his Model T. The surplus income of the factory workers allowed them to purchase more goods. "Workers were paid higher wages and shorter hours. With more time and money on their hands, workers turned into consumers, which caused an increase in the production of consumer goods" (The Reality…).
The production of consumer goods started rapidly developing and offering the new generation goods such as "ready-made clothing, electric phonographs, electric vacuum cleaners, fresh orange juice year round" (The Consumer Economy). Choices in clothing become wider. “Women’s fashions experienced dramatic changes in the early 1920's… 1920's Dresses were lighter and brighter and shorter than ever before. Fashion designers played with fabric colors, textures and patterns to create totally new styles of dress” (Women). Radio became a product of the mass market. Between 1923 and 1930, 60 percent of American families purchased radios.
The middle class was born. The new middle class with disposable income created new opportunities to get new modern entertainments. Cities with big populations started different amusements such as theaters and circuses. "Cities had many amusements for people to enjoy when not working" (Goff 183). According to Kathleen Drowne, the author of the book “The 1920’s”, in 1929 in New York the total number of theaters was 66 (222). The radio airwaves saw a big increase in popularity as well. The National Broadcasting Corporation (NBC) and Columbia Broadcast System (CBS) both transmitted signals nationwide, reaching nearly every area in the US.
Silent films, which had been around since the beginning of the century, became more popular in the 20’s. The beginning of the decade saw the founding of Metro-Goldwyn-Mayer (M-G-M) and the popularity of silent film stars such as Buster Keaton, Charlie Chaplin, Clara Bow and Rudolph Valentino (Entertainment). On Dec. 18, 1999, the Ford Model T was named “Car of the Century” by a panel of 133 automotive journalists and experts who began with a list of 700 candidates in 1996 and sequentially narrowed the nominees through seven rounds of balloting over three years(Legacy…).
This status shows the importance of this vehicle and its legacy today. For example, the cars we drive today have a lot of things in common with the Model T, despite the fact that at first glance they only share the same round wheels. As any car automaker in the world today knows, the easier a car is to service, the more customers it will attract. Ford managed this feat by keeping things very simple, almost rudimentary. The advantage was that you could repair the car with just a few tools and virtually no know-how. A real bonus when the next servicing station is 800 miles away.
(Legacy…) It's really a simple concept: the fewer parts and the less complicated a system is, the less things can go wrong. Most of the automakers today still use it. The popularity of the Model T and car at all created a big problem that is still not solved. “Reckless driving is almost as old as the car itself” (Honore 100).
Do you know how many pedestrians in the United States are killed or injured in crashes with motor vehicles? According to the National Highway Traffic Safety Administration, in 2009 4,092 pedestrians were killed and 59,000 were injured (walkinginfo.org).
“Today, the push of slow traffic is stronger than ever. Governments everywhere are laying speed bumps, narrowing streets, lining roads with radar cameras, synchronizing traffic lights, cutting speed limits, and launching media campaigns against fast driving” (Honore 100). Corporations today can learn from Henry Ford's experience by changing their policies. For example, according to Jerry White, "At $9 an hour, the contract workers at the plant make an annual straight-time salary of $18,720, well below the government’s official poverty threshold for a family of four.
At this rate, few if any can afford the $14,000 Chevy Sonics or $23,470 Buick Veranos that roll off the assembly lines at the pace of 400 a day" (www. wsws. org). In comparison with average U. S. annual income in 2011, which was $42,979, this wage is less than half. Factories owners can follow Henry Ford's policy and increase the wages; so workers can purchase the cars they produce like in 1920. Henry Ford was an eager man always looking to learn new approaches that would move him forward, and he accepted challenges. Without a growth mindset in today’s large corporations the workforce of these companies would be relegated to inefficiency.
In order for large corporations to be successful, it is imperative to take a growth mindset approach. The elimination of a fixed mindset approach allowed Henry T to revolutionize the manufacturing industry and implement new advances in technology. Fixed mindsets failed in the corporate world and it will continue to fail unless the leadership is driven by a growth mindset. Henry Ford's innovations put America on wheels, changed American lifestyle, revolutionized American industry, showed the basic principles of mass production to America and then the rest of the world and created new jobs for the middle class.
He showed that companies must have a growth mindset to be successful. A new culture of consumerism was created in the American society. It changed the minds and values of people in the USA. People started buying products, which were not really important for life but were in fashion. People saw and heard advertisements about them, read articles in newspapers, and wanted to buy these goods. For many people these things became more valuable than other people and relationships. Do we need to change this culture of consumerism and how can we do it? Do contemporary businessmen need to learn from Henry Ford’s experience?