Ford Motor Company Research Paper

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The Ford Motor Company established a system of modern mass production, labor relations, and wage policies that made it one of the most influential corporations of the twentieth century.

While the Ford Motor Company is the enterprise most closely associated with its namesake, Henry Ford, its incorporation in 1903 marked Ford’s third attempt to build an automobile company. Ford began his automotive career with the short-lived Detroit Automobile Company (1898–1900), which was followed by the Henry Ford Company (1901–1902).

Ford manufactured for both domestic and foreign markets. In its first year of operation, it contracted with an overseas distributor to sell cars in Canada and Europe. In 1905 a Canadian plant began producing Ford vehicles for the British Empire.

Ford, unlike its chief rival General Motors, did not adopt a multidivisional structure. Ford and Lincoln (later Lincoln-Mercury), purchased in 1922, remain the only divisions within the auto company. A similarly atavistic quality characterizes Ford’s ownership and management. The Ford family has consistently played a dominant role in ownership or direct managerial control throughout the company’s history. This structure of centralized control is at odds with the historical trajectory toward managerial capitalism typical of most large-scale twentieth-century American corporations.

Ford engineers did not invent the modern assembly line. The basic concept was adapted from the meatpacking industry, in which animals were transported along a system of overhead pulleys and systematically butchered. Over the years 1910 to 1914 the assembly line evolved from the system of conveyors and gravity slides on which the Model T car was assembled in tightly sequenced stages. Production at the Highland Park plant relied on work rhythms that matched the pace of machines. Rather than using generalpurpose tools and machinery, Ford manufactured machines to achieve specific tasks. Individual parts were made to be interchangeable, in order to speed production and reduce the need for skilled craftsmen. Investment in expensive, specialized machinery allowed for the introduction of economies of scale whereby unit costs fall as output rises. Ford produced half a million cars in 1915 and two million cars and trucks in 1923. It diversified into shipbuilding during World War I and aircraft manufacture in 1926. In addition to Europe and the British Empire, the newly industrializing Soviet Union was an important market; by 1927 the majority of tractors in the Soviet Union were Ford-built Fordsons. That same year Ford announced plans to acquire a 3,900-square-mile tract of land in Brazil to use as a rubber plantation to be named Fordlandia.

Integrated mass production was taken even further with the construction of the sprawling Rouge River plant in Dearborn, Michigan, during the 1920s. The Rouge plant inspired the photographer Charles Sheeler, whose pictures of it appeared in the pages of Vanity Fair magazine, and the painter Diego Rivera, who included it in the Detroit Industry murals; both depicted the factory as an icon of modern capitalism.

Along with time studies, Ford used various other strategies to organize work to meet the efficiency standards of plant machinery. In this sense the Ford system represents a refinement and extension of F. W. Taylor’s scientific management approach. The resulting work environment was fast-paced and continuous, and workers were hard-pressed to keep up. Turnover rates reached 370 percent in 1913. In 1914, to overcome workers’ resistance to machine-paced industrial work, the company inaugurated a radical plan to double hourly wages to five dollars a day. The extra money took the form of profit-sharing. To qualify for the higher wage, workers needed to demonstrate proper behavior at work and at home. Ford Sociological Department investigators inquired about workers’ drinking habits, marital strife, criminal records, church-going activities, and other evidence of moral character. In this way Ford Motor exerted social control over its employees off the job, as well as technical control of work efforts on the job.

Ford paid black workers the same wages as similarly qualified white workers. While blacks comprised between 10 and 20 percent of the workforce at Ford, they were overwhelmingly assigned the most dangerous, difficult, and unpleasant jobs, such as those in the foundry. Because their wages were far superior to those obtainable from any alternative sources of employment, black workers, especially young married men, were much less likely to quit these jobs and less willing to embrace unionization.

To expand sales, Ford needed to encourage new segments of the population to buy cars. Higher wages allowed workers to acquire mass-produced goods. The interdependence of mass production and mass consumption came to be characterized as Fordism. The Italian political theorist Antonio Gramsci used the term to describe the combination of social, technological, and political control over workers’ lives. It has since been extended to cover all institutions (factories, unions, families, and the state) that help to regulate the accumulation of profit in advanced capitalist economies.

Workers at Ford Motor unionized in 1941, four years after the United Auto Workers gained recognition at General Motors and Chrysler. Unionization at Ford was preceded by a strike at the Rouge plant that resulted in Ford’s recruitment of African American strikebreakers, thereby exacerbating racial divisions within the ranks of the working class at Ford. During this same year U.S. manufacturers, following directives from the government’s Office of Production Management, shifted to wartime production. Ford announced plans to mass-produce bombers at a new plant in Willow Run, Michigan. The Rouge plant was turned over to the production of aircraft engines and jeeps.

After the death of Henry Ford in 1947 and, earlier, that of his son and heir apparent, Edsel, in 1943, Henry’s grandson Henry II headed the company. He transformed the organization by bringing in modern management experts (nicknamed the “Whiz Kids”) with little or no experience at Ford. Among these new Ford executives was Robert McNamara, who later served as secretary of defense in the Kennedy and Johnson administrations during the Vietnam War.

The U.S. automobile market after World War II was marked by both consolidation—leading to the dominance of the “Big Three” (GM, Ford, and Chrysler)—and the increasing presence of foreign models. In 1955 Toyota Motors built its first modern Japanese mass-production plant, modeled on Ford’s Rouge factory. In 1957 foreign automobile imports to the United States exceeded exports for the first time in over half a century. Ford began to reassert control of its foreign subsidiaries in Canada and Britain. In 1957 the European Common Market was formed. This spurred Ford to try to build cars for regional rather than national markets (Europe instead of Germany, for instance). In 1967 Ford of Europe was established and in the 1970s it introduced an ultra-subcompact car. From the 1980s through the mid-1990s Ford was the leading car company in Europe. Nevertheless, more aggressive plans to build a world car that would integrate North American and European markets failed to produce success.

As part of this strategy of global integration, Ford completed a series of acquisitions in the 1980s and 1990s that included producers from Japan (Mazda), Europe (Volvo), and Britain (Jaguar, Land Rover, and Aston Martin). Ford recovered from the OPEC oil crisis of the 1970s and the product quality problems of the 1980s by designing the best-selling Taurus along with the increasingly popular Explorer sport utility vehicle. By 1995 Ford’s share of the U.S. automobile market stood at 25.6 percent. However, well into the first years of the twentyfirst century the company continued to rely on sales of trucks and sport utility vehicles at a time when environmental concerns and dependence on foreign oil were emerging as major concerns for U.S. consumers. Ford CEO William Ford Jr. sought to reorient production toward environmentally friendly hybrid vehicles while continuing to offer traditional gas-powered cars. The Rouge plant was reengineered to incorporate green building technology. As Ford’s share of the U.S. market fell below 20 percent during the 2000s, the company embarked on a strategy of planned shrinkage of facilities and workforce in the United States. This mirrored the trend toward shrinking market share and falling sales for each of the Big Three U.S. auto companies.

Bibliography:

  1. Bonin, Hubert, Yannick Lung, and Steven Tolliday, eds. 2003. Ford, 1903–2003: The European History. 2 vols. Paris: P.L.A.G.E.
  2. Brinkley, Douglas G. 2003. Wheels for the World: Henry Ford, His Company, and a Century of Progress. New York: Penguin Books.
  3. Edwards, Richard. 1979. Contested Terrain: The Transformation of the Workplace in the Twentieth Century. New York: Basic Books.
  4. Foote, Christopher L., Warren C. Whatley, and Gavin Wright. 2003. Arbitraging a Discriminatory Labor Market: Black Workers at the Ford Motor Company, 1918–1947. Journal of Labor Economics 21 (3): 493–532.
  5. Hounshell, David A. 1984. From the American System to Mass Production, 1800–1932: The Development of Manufacturing Technology in the United States. Baltimore, MD: Johns Hopkins University Press.
  6. Meyer, Stephen, III. 1981. The Five Dollar Day: Labor Management and Social Control in the Ford Motor Company, 1908–1921. Albany: State University of New York Press.
  7. Nevins, Allan, with Frank Ernest Hill. 1954–1962. Ford. Vol. 1: The Times, The Man, The Company ; vol. 2: Expansion and Challenge: 1915–1933 ; vol. 3: Decline and Rebirth: 1933–1962. New York: Scribner’s and Sons.
  8. Wilkins, Mira, and Frank Ernest Hill. 1964. American Business Abroad: Ford on Six Continents. Detroit, MI: Wayne State University Press.

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