In the early automobile days, the racetrack was used by manufacturers to prove
the roadworthiness of their cars by putting them in public view and pushing them
to the limit. Henry Ford was no exception. Ford sought to fulfill his own dreams
of manufacturing automobiles by providing his expertise into automobile racing.
In 1901, at a ten-mile match race in Grosse Pointe, Michigan, Ford entered one of
two race cars, he had built, against a car built by Alexander Winton, a leading
automaker from Ohio. Ford’s car won.
At the race was a coal merchant named Alexander Malcomson. Malcomson agreed to
back Ford in a new business venture. Along with about a dozen other investors,
they form the Ford Motor Company in 1903, at a plant located on Piquette Avenue in
Detroit. Although the company was capitalized at $100,000, actual cash on hand was
about $28,000. Some investors, including the Dodge brothers, John and Horace,
contributed other types of capital.
With an employment of 125 workers, Ford turned out 1,700 cars in three different
models, the first 15 months of operation. Major components were brought from
outside the company and mechanics built the cars individually at workstations,
gathering parts as needed until a car was completed. The cars were comparatively
expensive, but the high profit-margins pleased the stockholders.
Meanwhile, Malcomson’s second automobile company failed and was forced to sell his
shares in the Ford company. Henry Ford brought enough of them to assume a majority
position. James Couzens, another stockholder and Malcomson's former clerk, as
General Manager was in effective second-in-command. He would later become vice
president and secretary-treasurer at the Ford Motor Company.
Disturbed by the fact that his company was heading toward even pricier models,
Henry Ford wanted to build a new cheaper model with lower profit margins—one
“for the great multitude”. Against many of his backers, Ford introduced the
Model-N in 1906. While the Model-N was only a small success, Ford pressed forward
with a design he really wanted. The car that would become the Model-T.
In the winter of 1906, Ford partitioned off a secret room in his plant on Piquette
Avenue. Along with a few colleagues, he devoted two years to the design and
planning of the Model-T.
Ford Model T
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The car that finally emerged would change America forever. Introduced on October
1, 1908, a customer could purchase the Model-T for $825. What he got was a car
that was light, at about 1,200 pounds; relatively powerful, with a four-cylinder,
twenty horsepower engine; and fairly easy to drive, with a two-speed,
foot-controlled "planetary" transmission. Simple, sturdy and versatile, the little
car would excite the public imagination.
In its first year, over ten thousand were sold, a new record for an automobile
model.
To help boost sales, promotional activities were held ranging from a black-tie
“Ford Clinic” in New York to Model-T rodeos out west.
In 1909, an auto race from New York to Seattle sponsored by a mining magnate named
Robert Guggenheim was held in which the only survivors were two Model-T Fords. "I
believe Mr. Ford has the solution of the popular automobile," Guggenheim concluded.
Demand for the Model-Ts became so great that Ford couldn’t produced them fast
enough. The old method of building one car at a time proved ineffective. Ford
realized that he not only had to build a new factory, but a new system within that
factory.
Since its introduction on October 1, 1908, demand for the Model T grew overwhelmingly
during the first two years. Henry Ford quickly realized that the Piquette Avenue
plant, which built cars in much the same way as other manufactures did, was
inadequate to meet this growing demand. Ford knew that not only a larger factory was
needed, but also a better method of producing cars within that factory.
The Highland Park factory opened in 1910. Designed by the nation’s leading industrial
architect, Albert Kahn, the factory was unparallel in scale, covering over sixty-two
acres.
Ford continued to build his cars in the customary manner when the new factory first
opened. Assembly took place on the top three floors of the four-story factory.
Organized from top to bottom, body panels were hammered out on the fourth floor.
From there workers, on the third floor, placed tires on wheels and the auto bodies
were painted. After assembly was completed on the second floor, the new automobiles
descended down a ramp past the first-floor offices.
Production increased by approximately 100 percent in each of the first three years,
from 19,000 in 1910, to 34,500 in 1911, to a staggering 78,440 in 1912. It was still
only a start.
Henry Ford expressed his desire for everyone to be able to purchase a automobile
when he stated in 1909, "I'm going to democratize the automobile”. "When I'm
through, everybody will be able to afford one, and about everybody will have one."
When the Model T was introduced in 1908, it cost $825. Willing to sacrifice profit
margins, Ford continuously reduced the price each year. By 1912, the price had
dropped to $575, less than the prevailing average annual wage in the United States.
Profits per car fell from $220 in 1909 to $99 in 1914.
Sales, however, exploded, rising to 248,000 in 1913. Net income rose from $3 million
in 1909 to $25 million in 1914. Ford's U.S. market share rose from a respectable 9.4
percent in 1908 to a formidable 48 percent in 1914. Ford demonstrated that a
strategic, systematic lowering of prices could boost profits.
Ford’s experimentation of factory automation began in 1910, at Highland Park. Ford
and his efficiency experts worked everyday for the next seventeen years, examining
every aspect of assembly and testing new methods to increase productivity.
Ford himself found the inspiration for the moving assembly-line, on a trip to
Chicago. At a stockyard, he saw butchers removing certain cuts of beef, as the
carcasses moved on an overhead trolley, until nothing was left. Ford would simply
reverse the process.
Setting up an assembly-line is no easy task, it can get complicated. For any
assembly-line to work, timing was crucial. Parts, often made on sub-assembly lines,
had to be fed smoothly into the process. A clog along a smaller line would slow work
farther along.
The first moving line was tested with assembly of the flywheel magneto, showing a
saving of six minutes, fifty seconds over the old method. As similar lines were
implemented, the assembly time for a Model T chassis dropped from twelve hours,
thirty minutes to five hours, fifty minutes.
Ford's production engineers continued to perfect the assembly line experimenting
with work slides, rollways, conveyor belts, and hundreds of other ideas. Even after
the first and most effective assembly-line in the automobile industry was fully
implemented in 1913, upgrades continued.
Those effective must from this new innovations were the workers. In January, 1914,
Ford developed an "endless chain-driven" conveyor to move the chassis from one
workstation to another, allowing workers to remained stationary. Three months
later, Ford created a "man high" line which allowed workers to do their work at
waist level without having to move their feet.
The assembly-line brought about many unskilled workers causing a high turnover of
employees. The auto industry reluctantly accepted high turnover as part of the
assembly-line system, passing the cost on to the customers. Henry Ford’s solution
was a bold stroke that reverberated through the entire nation.
