The Business Philosophy of the Man Who Brought Us the Mustang–and the Edsel

The Atlantic interviewed Henry Ford's grandson in 1947, just as be began one of the most successful corporate rescues in history.
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Henry Ford II poses in front of a Mustang at the 1964 World's Fair in Flushing Meadows, NY.

In 1945, the Ford Motor Company named Henry Ford II, a.k.a. "Hank the Deuce," as its president. His grandfather, the first Henry Ford, had built the iconic brand into a giant, but by the end of World War II the company was in trouble. Financial collapse was a realistic enough possibility that some thought the young heir might cash out while he could. Instead, he took the helm and presided over a tremendous comeback, ultimately giving Ford customers iconic models like the Thunderbird, Falcon and Mustang–as well as duds like the Pinto and Edsel. 

Two years into his tenure, he sat down with The Atlantic for a lengthy interview at what we now know was the beginning of Ford Motor Company's second act. Insights into the post-World War II automobile industry abound. The firm employed 130,000 people at the time, and it is perhaps unsurprising that the scion of the company's founder declared his foremost goal was simply "to outsell Chevrolet."

What's been forgotten is Ford's biggest obstacle. "We can't get enough steel to manufacture anywhere near capacity," he said. "We are in a seller's market. Our facilities for making low-priced cars are not as large as Chevrolet's. Right now we can sell all we can make, and so can they. But some day supply is going to be greater than demand. It won't be a question then of how many you can make, but how many you can sell. Our goal is to outsell Chevrolet when that day comes."

What follows are excerpts from the interview.

Market Share

"Ford Motor Company total sales–of all types of passenger cars in all price classes–have dropped from about 45 to 50 percent of the total auto market in the mid-1920s to a low of 18 per cent today... If Ford has any 'rightful share' at all, I think it is considerably higher than 18 or 20 percent. I know we can do better than that."

The Businessman's Calling

"Of course, we are deeply interested in the difficult problems facing the United States and the world. But I do not pretend to be a philosopher, and I doubt whether we can help most by setting up a series of abstract goals. I have repeated many times that our organization has one primary peacetime job: to make more and better cars to sell for lower and better prices. If we do this job right, we will be making the kind of contribution to society a business like this is set up to make."

The Need for 4,000 Accountants

"One of the biggest problems was our almost complete lack of emphasis on finance accounting. No one knew how well or how poorly the steel mill or forge shop or any other part of the business was doing. There just weren't adequate figures. All we had was over-all financial statements appearing at not too frequent intervals, primarily for tax purposes... we were not providing anyone, from the job foreman up to this office, with the information needed to do his job effectively and well.

"Perhaps in the old days out here they didn't need all the people and organization we need these days to do our jobs. We now have more than 4000 persons employed in finance and accounting. Today we know whether the steel mill is operating at a profit or a loss and how much that is. we know how much is spent on labor, materials, and overhead."

Why Weighty Cars Won

Doc 1/Flickr

"As you probably know, we have been doing a substantial amount of research and experimentation, both regarding the kinds of cars people want and regarding possible radical changes in car design. At one time we did a lot of work on a radically different light car using new materials and weighing about a third less than present models. At least for the present, that idea is on the shelf, for the very good reason that our studies indicated that a light car would not give people what they really want–they want a car that will hug the road at high speeds; they want an extra-heavy frame and a car heavy enough to carry a lot of extra equipment. In fact, what they really want is a big car at a low price. At the present stage of development it just isn't in the cards to build these requirements into a light-weight automobile."

On Keeping Labor Happy

"Our cars are built by 107,000 workers on our hourly payrolls. These men are managed, not by a few hundred staff people they seldom see, but by a total management group of about 8700–from job foreman to this office. One of our biggest and certainly one of our most difficult jobs for the future is to make all 130,000 Ford men and women effective team players, to a far greater degree than they have been in the past.

"There are many phases to this job but the heart of our problem can be stated very simply: it is to get each man in our organization to treat the men he works with as he would like to be treated himself. Now let me tell you how far some of our foremen think we are from that objective. Hundreds of them answered a letter I wrote to all foremen this year, and we didn't feel very complimented about what some of them had to say. One man said that he and the other foremen in his building were constantly being dragged into the superintendent's office and given hell for everything that went wrong. Another talked about the time he was called down in front of a group of men 'in a way not fit for a dog to take.'

"...I don't think for one moment that these are conditions or complaints which are peculiar to Ford Motor Company. I think they are found more or less in all mass-production industry. And if, day after day, and year after year, he gets pushed around, he's going to try to get the work out of the other men under him by pushing them around, unless he's a very remarkable guy. His chance to learn something about the job of the man above him are very remote indeed, for he is not going to be consulted when his boss makes decisions, or even told why those decisions are made."

The Role of Foremen

"I personally do not believe that foremen should be unionized, because they are members of management. But I find it difficult to criticize our men for joining the union because, frankly, I doubt whether in the past very many of them were actually considered or treated as part of management... One of the first jobs of our newly created management relations department is to take specific steps which will let them know they really are a part of that team. Each step may seem small in itself, but for my money, all of them are long overdue. We are eliminating time clocks and badges for foremen, building separate parking places, locker rooms, and eating places for them, designing new coverall coats to identify foremen and protect their clothes. We have established management newsletters and management information bulletins so that we can pass information along to foremen's. We have worked out a new vacation policy and are developing a revised wage structure to take care of inequities and allow adequate merit increases within a department."

Strikes and Communists

"Unions for our workers are quite a different matter from the foremen's union. Unions are here to stay, and as I have said before, our workers should have the right to strike that goes with unionism. We have worked with the unions in the past and we certainly have every intention of working with them in the future. Frankly, though, I think union leaders–and I mean lots of them, not only our own–have got to do a better job than they have of finding out and representing the real wants and needs of our workers. Then again, as in our negotiations this year, internal union factionalism and politics and a minority of Communists have tended to create a confusion and bitterness that had nothing whatever to do with the interests of our workers."

Pension or No Pension?

"Over two years ago, we began a careful investigation of all types of old age retirement or pension plans. The plan we finally offered was more favorable than any other I know of in a large industry, providing among other  things that an average worker upon retirement would receive company and government payments totaling about 50 per cent of his normal pay–and in some cases 60 to 65 per cent of normal pay. When, in the course of negotiations, some of the union leaders reversed their original petition favoring a retirement plan, we suggested that the workers themselves be allowed to vote for one of two alternatives. The first was a 7 per cent wage increase plus the pension plan, and the other a pattern wage increase equivalent to 15 cents per hour with no pension. The vote was overwhelmingly against the pension plan and in favor of the 15 cents an hour pattern wage increase... The results clearly indicated that most of our employees would rather have high immediate pay than old age security. Maybe the average Ford employee feels that he would prefer to take care of his own old age in his own way, rather than have his security planned for him."

The Importance of Human Relations

"I have a deep-rooted conviction that our staff departments won't carry us too far unless the men in our line organization learn to treat every individual who works with them the way a human being expects and deserves to be treated. Contacts with personnel and other special departments, publications, and speeches are not enough, unless the boss talks and lives what the speechmakers say. The man you work for day after day and year after year, whether he's a foreman or a superintendent or whatever, is the one who represents the company to you. He is the Company to you. And if the man you work for gets pushed around by his boss, gets orders issued to him with "never mind why," there's an awful good chance you are going to get pushed around too. The nub of our problem is building a team of foremen, superintendents, departments and division heads who realize that we can get our job drone best by really getting along with people."

Alden Jewell/Flickr

 

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Conor Friedersdorf is a staff writer at The Atlantic, where he focuses on politics and national affairs. He lives in Venice, California, and is the founding editor of The Best of Journalism, a newsletter devoted to exceptional nonfiction.

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