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Book Review: The Fords: An American Epic by Peter Collier and David Horowitz

AUGUST 01, 1988 by RUSSELL SHANNON

Summit Books, 1230 Avenue of the Americas, New York, NY 10020.- 1987 • 496 pages • $22,95

Perhaps a more fitting subtitle for Peter Collier and David Horowitz’s new account of the Ford family would be the title Winston Churchill chose for the final volume of his World War II memoirs: Triumph and Tragedy. Surely, Henry Ford’s mass production of the Model T ranks as one of the supreme triumphs of American entrepreneurial history. Yet the subsequent development of both Ford’s industrial domain and his descendants’ lives is fiddled with tragedy.

The first Henry Ford, whose father had emigrated from Ireland to America during the potato famine of the 1840s, was far more than simply one of the first builders of an automobile. He was also the epitome of the innovator, determined to make a commercial success of a car whose selling price lay within the grasp of ordinary Americans.

To this end, Ford’s assembly line production was clearly the key. Although Collier and Horowitz do not indicate that Ford ever read Adam Smith (in fact, the flaws in his knowledge of history were appalling!), a statement Ford made in 1903 reads like the sequel to the first few pages of The Wealth of Nations: “The way to make automobiles,” Ford said, “is to . . . make them all alike . . . . just as one pin is like another when it comes from a pin factory.”

Much as Adam Smith’s famous pin makers benefited from the division of labor, Ford’s auto workers vastly improved their productivity when the first assembly line was established at the Highland Park plant in 1913: from the 12½ hours previously required to assemble a Model T, the time dropped drastically to 11/2 hours.

Ford cut prices on his cars, but costs were so low and consumer demand was so elastic that profits soared. At the insistence of his assistant, James Couzens, Ford then agreed to raise his workers’ pay to $5 a day, making it easier for them to afford a Ford. But the company reaped further benefits, for the increased pay reduced labor turnover and lowered production costs. What splendid testimony to the validity of Adam Smith’s argument that the pursuit of self-interest and social benefit can go hand in hand.

Sadly, however, as he grew older, Ford engaged in increasingly bizarre and brazen behavior. When some workers violated his demands for staunch loyalty by purchasing General Motors cars, they were fired. When other workers flirted with the fledgling United Auto Workers, Ford sped up the assembly line in reprisal—“causing a syndrome involving exhaustion and despair which eventually became known in Detroit medical circles as ‘Ford-itis.’”

Henry’s only son, Edsel, who had become largely responsible for much of the company’s operations, advocated accommodation with the labor union, but his arguments fell on deaf ears. As a result, much bloody strife ensued. Edsel was also one of those who repeatedly urged his father to confront the growing rivalry of Chevrolet by introducing more new models. But Henry constantly balked, allowing his company’s market share to fall dramatically and depriving consumers of fresh options.

Collier and Horowitz suggest that Ford’s life had Shakespearean overtones. Certainly, there are parallels with the bard’s tragic heroes, for Henry often seemed to be playing King Lear to his son’s Cordelia, ignoring Edsel’s wise counsel while others at the Ford factories pandered to his idiosyncracies.

Overcome by denial and frustration, Edsel succumbed to cancer at a premature age. Henry’s grandchildren suffered from alchoholism and other problems. The burden of their inheritance proved too great, calling to mind the remark Andrew Carnegie made in his “Gospel of Wealth” back in 1889 that “great sums bequeathed often work more for the injury than for the good of the recipients.”

Yet despite the fiasco of the Edsel model, grandson Henry Ford II finally was able to set the company firmly on its feet by emulating managerial practices of its arch-rival General Motors. An internal system of checks and balances limited the scope for individual power and abuse. Henry II also removed the Ford family from automatic control of the company and turned it over to professionals.

In fact, the image of the phoenix is appropriate for the recent success of the firm. Fortune magazine reported in its issue for January 4, 1988, that “Ford has captured U.S. leadership in styling and reputation for quality. Last year Ford passed the General in profits for the frost time since 1924 . . . .”

What has all this to say about free markets? Would a system of stricter and more pervasive government control have prevented some of the problems and abuses? Perhaps, but clearly that proposal poses an even more awesome threat.

At least in a free market system, consumers and workers have a greater range of choice. Surely, it was partly the competition of automotive rivals which prompted changes in Ford’s management system and design quality.

In the end, what really causes the reader to shudder is the thought: what would have happened if a man like Henry Ford I had become our king? Had that been the case, then not just one automotive empire but our whole nation could have been bound by tragedy. []

(Professor Shannon teaches in the Economics Department at Clemson University.)

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August 1988

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