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Henry Ford Puts Pioneering Ideas to Work

Henry Ford, founder of the Ford Motor Company, was born to successful Michigan farmers, Mary and William Ford, on July 30, 1863. His father had important connections with merchants running the agricultural markets in De­troit and was a friend of the mayor, alliances that would later help Henry in raising money to start a company.

The young Ford showed an early penchant for mechanical things and was repairing watches by the age of 7. At age 16, Henry left the farm to complete an apprenticeship as a mechanic. The following year, he went to work for the De­troit Dry Dock Company, maker of iron ships, and returned to the farm just before turning 21 years old.

Through helping a neighbor repair a small portable steam engine, Henry landed a job with Westinghouse as area demonstrator and repairman for the southern Michigan territory. Henry then returned to farming, but supplemented his income with various mechanics jobs. Then, in 1891, Henry took a job as a mechanic with the Detroit Illuminating Company (which later became Detroit Edison) and soon became head engineer, a job that gave him some time to think about building an automobile.

When he was not working at his job, he was building his first car, which was completed in 1896. It was called a Quadricycle and looked like two bicycles held together by an engine. The car demonstrated that his gasoline engine could be used successfully to power a multipurpose vehicle. An improved Quadricycle, produced 3 years later, brought financial backers. His first com­pany, the Detroit Automobile Company, was formed on August 5, 1899. Unfor­tunately, the company was dissolved in November 1900 after disputes between Henry, who wanted to perfect his car, and the backers, who were interested in mass production.

During the next year, Henry produced another improved car, which won a major U.S. auto race. A new group of backers provided money for a new com­pany, the Henry Ford Company, in November 1901. Within 4 months, Henry was ousted, again because he preferred working on his racing cars to producing automobiles for public consumption. As his part of the settlement, he received $900, the blueprints for his next racing car, and the agreement that the firm could no longer use his name. However, unlike his first company, this organiza­tion remained in business with a new name, Cadillac. Eight years later, the Cadillac Company joined with the Buick and Olds companies to become the fledgling General Motors Corporation. Thus Henry had a direct hand in the birth of Cadillac automobiles and a major competitor, General Motors.

Henry's next racing car won another major race in October 1902. When reports of the race mentioned that he planned to introduce yet another car, a new wave of investors came forth with money to found the Ford Motor Com­pany. Henry received 25.5 percent of the stock and within 3,5 years would buy out the other stockholders. This time, Henry was more attentive to the business of producing automobiles. In 1903, the company introduced the Model A Ford into a receptive market. Several other models soon followed, perhaps the most famous being the Model T Ford, introduced in 1908. The Model T, priced at $825, generated a demand for thousands of the cars, but the manufacturing process was not geared to producing such large numbers.

New manufacturing methods were needed, and Ford became a student of the modern management methods that were emerging at the time. For example, Ford was familiar with the work of Frederick Taylor, who was gaining his own notoriety as the driving force behind the new principles of scientific management and the use of time-and-motion studies to increase job efficiency. Legend has it that Henry Ford also visited the Sears mail-order plant in Chicago, where he witnessed a mass-production facility with an assembly line, a conveyor belt, standardized and interchangeable parts, and plant-wide production scheduling. Henry believed that production efficiency could be increased both through the use of scientific management methods and through the judicious use of ma­chines.

By combining these pioneering ideas Ford established his famous mecha­nized assembly line in the Highland Park plant in 1913. The average time for assembling a motor and chassis dropped from 12,5 hours to 93 minutes. The number of workers required to assemble a car also dropped dramatically. World transportation, manufacturing, and management were never the same. Henry's innovative use of the latest management ideas of his time set the stage for the Ford Motor Company to become one of America's largest corporations.

Imagine inventing a highly desirable product but having difficulty produc­ing it in the quantities required. In devising a solution to this problem Ford made use of scientific management, the most advanced management approach of his day. New ideas about management do not typically arise in a vacuum. More frequently, they emerge from a foundation of the best available ideas that have been developed over a period of time. As a result, managers need to un­derstand the roots of the major current ideas about management. An under­standing of major contributions to current management approaches also helps managers assess why some approaches are likely to be successful and others unsuccessful, at least in given situations.