Reckoning

by David Halberstam

  All of this, the creation of the Rouge as the ultimate modern plant, speeded up production even more. The Rouge had opened in increments, first building Eagle Boats in 1918, then making pig iron in 1920, then by 1925 making tractors and auto engines. It was only in 1928, as Ford switched from the Model T to the A, that it became the most awesomely integrated plant in industrial history. The production of a complete car from raw material to finished item dropped from twenty-one days to only four.

  The Rouge was Henry Ford’s greatest triumph, and with its completion he stood alone as the dominant figure in America and the entire developed world. He had brought the process of manufacture to its ultimate moment, and what he did at the Rouge would be copied in smaller scale by countless others. He had given the world the first people’s car and had accumulated riches far beyond his ability or desire to spend. He had become an immensely popular man as well, the man who had lived the American dream. But even then, forces he had helped set in motion would begin to summon the darkness in his character.

  Some fifty-eight years later, in 1983, a high member of the American embassy in Tokyo ran into a senior executive of Nippon Kokan, one of the great Japanese steelmakers. At that moment Nippon Kokan was thinking of buying the old Rouge steel plant, which several decades earlier had been considered the most modern in the world.

  “How does the plant look?” the American diplomat asked.

  “Very good by American standards,” the Japanese executive answered.

  “Will you have to make any modifications?” the American asked.

  “Yes,” said the Japanese. “The first thing we will have to do is bring in a continuous casting process.” That, the American knew, had since become the guts of any truly modern steel plant.

  “Anything else?” he asked,

  “A new rolling line,” he said, mentioning a process that brought steel to the exact grade. “And a new annealing line.” That was a tempering process.

  All he is talking about, thought the American, is an entirely new plant.

  The deal in the end did not go through. There was a conflict between the Japanese owners and the American workers, and the Japanese, hardly eager in the first place, backed off. It was left to the Ford Motor Company to modernize the Rouge. Three hundred million dollars was to be spent trying to make what was once the world’s most modern steel plant competitive with those of Japan and Korea.

  5. THE DESTROYER

  ALTHOUGH HENRY FORD SEEMED to dominate every aspect of industrial achievement, his strengths eventually became his weaknesses. One notorious example was staying with his basic car far too long, ignoring technological change in the cars themselves while obsessively pursuing technological change in their manufacture. From the very start he fought off every attempt to perfect the Model T. In 1912, while he was off on a trip to Europe, his top engineers made a few small changes intended to improve the car. Their version of the T was lower and some twelve inches longer. It was a better, smoother-riding vehicle, and his associates hoped to surprise and please him. When he returned, they showed it to him. He walked around it several times. Finally he approached the left-hand door and ripped it off. Then he ripped off the other door. Then he smashed the windshield. Then he threw out the backseat and bashed in the roof of the car with his shoe. During all this he said nothing. There was no doubt whose car the T was and no doubt who was the only man permitted to change it.

  When Frank Kulick, an old buddy from Ford’s racing days, wanted more power in the engine and suggested making bigger valves, Ford created a special engine with valves reduced from 1¼ inches to 1 inch. He said nothing of this reduction to Kulick and then asked him innocently if the new engine had more power. Kulick, believing that the new engine was larger, said that it did. “Let’s tear it down and find out what made it go,” Ford said. With pleasure he watched humiliation come over Kulick’s face as he saw that the valves were smaller. The lesson was clear: Do not suggest improvements on my car. For the next thirty years, anyone wanting to improve a Ford car ran into a stone wall.

  What had been another Ford strength, his use of manpower, also turned sour. The early workers at Ford had been skilled artisans, tinkering with designs as they worked. A job at Ford’s, as it was known, had been desirable because Henry Ford was at the cutting edge of technology, always trying to do things better, and men who cared about quality wanted to be a part of his operation. In the early days he had his pick of the best men in Detroit. But the mechanized line changed the workplace. These new jobs demanded much less skill and offered much less satisfaction. The pressure to maximize production was relentless. Men who had prided themselves on their skills and had loved working with machines found themselves slaves to those machines, their skills unsummoned. The machines, they discovered to their rage, were more important than they were. The company seemed to care more about the equipment than it did about them. The more the plant was mechanized, the more the work force began to unravel. Men began walking out of the Ford plant. Ford himself was derided among workers as “the speed-up king.” Detroit was known as a company town with weak unions. Now the IWW, the Industrial Workers of the World, one of the country’s more radical labor movements, was beginning to talk about an all-out assault on Ford.

  The turnover in the labor force in 1913, the year of the great mechanization, was 380 percent. It soon became even worse. In order to keep a hundred men working, Ford had to hire nearly a thousand. Ford and his principal business partner, James Couzens, realized they had to stabilize the work force. So they came up with the idea of the $5 day—that is, of doubling the existing pay. There were some who thought it was Couzens’s idea, though Ford later took credit for it. Perceived by most observers as an act of generosity, it was in fact an act of desperation. Ford calculated that a $5 day would attract the best workers, diminish labor unrest, and thus bring him even greater profits. Besides, he believed, it was a mistake to spend money on the finest machinery and then put those precious machines into the hands of disgruntled, unreliable, perhaps incompetent men.

  Nonetheless, other capitalists roundly attacked Ford as a traitor to his class—though in fact Ford had never thought of himself as being one of them; he saw himself as part of the productive class. Speaking of the allegedly exorbitant wage, one Michigan journal wrote that any man whose wife wanted more than two calico dresses was married to “an indecent woman.” The Wall Street Journal said that the wage was an “economic crime,” the New York Times called it “distinctly Utopian,” and another publication said it would make the lower class unhappy forever. Ford’s instincts, however, were right. Not only did the decision solidify the work force; it was so successful a public-relations gesture that it allowed Ford to cut back sharply on his advertising. He liked to refer to it as one of the smartest cost-cutting moves he had ever made and insisted that he had no philanthropic intent. This denial of altruism, a young Detroit theologian named Reinhold Niebuhr said later, was “like the assurance of an old spinster that her reputation as a flirt has been grossly exaggerated.” Indeed in 1914, 1915, and 1916, the first three years of the $5 wage, the Ford Motor Company’s profits after taxes were $30 million, $20 million, and $60 million. To working men, the $5 day was electrifying. The day after his announcement of the new wage, more than ten thousand men stormed the gates of the Ford plant looking for work. Ford had wanted the pick of workers; the pick he now had. For days the crowds grew, and policemen were needed to keep them under control.

  It was probably the first time that the fruits of the oil-fueled industrial age had reached down to the average worker. Formerly a worker had a grim and thankless job that rarely let him get ahead. He would end his life as he began it, and his children were doomed to the same existence. Now, however, with cheap oil and mass production, the industrial cycle was different. It was more dynamic; it generated much more profit and many more goods, which required customers with money to buy them. The worker became the consumer in an ever-widening circle of affluence. More than a dec
ade later, when Ford’s personal fortune was estimated at nearly $1 billion, a writer asked him to compare his wealth and privilege with that of the pharaohs. Ford replied that there was a better article to be written comparing the life of a Ford worker, whose wage had by then risen to $7 a day, “with a fellow on the pyramids who worked for ten cents a day.”

  Henry Ford was an odd, shrewd, somewhat cantankerous Michigan farmer whose mechanical skills had catapulted him far above the place in society where he felt comfortable. He was also perhaps the greatest celebrity of his time. Reporters hung out at his office, and his every word was quoted. That both helped and hurt him, because although he was a genius in manufacturing and perhaps a near-genius for a long time in business, much of what he said was nonsense, if highly quotable nonsense. On cigarettes: “Study the history of almost any criminal, and you will find an inveterate cigarette smoker.” On Jews: “When there is something wrong in this country, you’ll find Jews.” The Jews, he thought, were particularly unproductive people, and he once vowed to pay $1000 to anyone who would bring him a Jewish farmer, dead or alive. He hated the diet of Americans of his generation—“Most people dig their graves with their teeth,” he once said. He was prophetic about the nutritional uses of the soybean and intuitive about the value of whole-wheat bread. He felt that people who wore glasses were making a serious mistake; they should throw away their glasses and exercise their eyes. For almost all of his adult life, he used unadulterated kerosene as a hair cream. He did this because he had observed, he said, that men who worked in the oil fields always had good heads of hair. “They get their hands filled with the oil, and they are always rubbing their hands through their hair,” he said, “and that is the reason they have good hair.” One of the jobs of E. G. Liebold, his private secretary, was to keep a gallon of No. 10 light kerosene on hand for Ford’s hair, and constantly to watch that it did not become contaminated.

  His feistiness did not make him any less a folk figure. Indeed, there was a deliberate attempt to exploit his folksiness and to maximize the myth of Henry Ford for the benefit of the company. In his later years, if he injured his ankle at work, it was announced that he had hurt it playing football with his grandchildren. When he went to Atlantic City for the issuance of a stamp commemorating the life of his friend Edison, he did not, it appeared, have any money with him, and so there was a photograph sent around the world of the head of the Ford Motor Company, perhaps the richest man in the country, borrowing two cents from the mayor of Atlantic City in order to buy a stamp. Photographers who missed that shot could have one of him shooting craps with the porters on his private train. On one occasion someone noticed that his shoes did not match; he replied that every year on his birthday he put on one old shoe to remind himself that he had once been poor and might be poor again. At the height of his power and wealth, he visited Edward Stokesbury, a Morgan partner whose house had 145 rooms and 45 bathrooms. Reporters stopped him as he was leaving Stokesbury’s residence and captured the perfect quote: “It is a great experience to see how the rich live.”

  He was in some ways a shy man. In the old Ford factory his office had a window through which he used to crawl in order to escape visitors. Nonetheless, he was acutely aware that his name was the company name and that his personal publicity generally helped the company. All news from the Ford Motor Company was about him. At a time when few public figures got much mail, Henry Ford received as many as eight thousand letters a week. He was also a hard man, and he became harder as he became older. He distrusted friendship and thought it made him vulnerable—friends might want something from him. He used a company group called the Ford Sociology Department to check up on employees and find out whether they drank at home or had union sympathies. If they were guilty of either, they were fired. While it allegedly started to help workers with personal problems in finances or health, the department became a sinister means of spying on workers. For all of his populism, he always took a dim view of the average employee. Men worked for two reasons, he said: “One is for wages, and one is for fear of losing their jobs.” He thought of labor in the simplest terms—discipline. He once told a journalist named William Richards, “I have a thousand men who if I say ‘Be at the northeast corner of the building at four A.M.’ will be there at four A.M. That’s what we want—obedience.”

  Even in the days before he became isolated and eccentric, he liked playing cruel tricks on his top people. He loved pitting them against each other. One of his favorite ploys was to give the identical title to two men without telling either about the other. He enjoyed watching the ensuing struggle. The weaker man, he said, would always back down. His basic management style, said Frank Hadas, an employee in the Lincoln plant, was “‘Let’s you and him have a fight and see how we come out.’ If you decided to drop it, well, you were the weaker one.” He liked the idea of keeping even his highest aides anxious about their jobs. It was good for them, he said. His idea of harmony, his colleague Charles Sorensen wrote, “was constant turmoil.” Firings were often cruel and brutal. When Ford decided that he had had enough of Frank Kulick, the man who had favored larger valves and was humiliated for it, he turned the job of firing him over to Harry Bennett, his chief of security. Bennett led Kulick over to a car and asked him to listen to the magneto; something, said Bennett, appeared to be wrong. Kulick climbed onto the fender to listen. Bennett then raced the car out of the factory into the yard, and turned sharply so that Kulick was thrown to the ground. Bennett raced the car back into the factory and then locked the gates. Kulick was never allowed inside again. The same sort of thing was going on in the factories. The foremen, the men who ruled the factory floor, had once been chosen for their ability; now, increasingly, they were chosen for physical strength. If a worker seemed to be loitering, a foreman simply knocked him down. The rules against workers talking to each other on the job were strict. Making a worker insecure was of the essence. “A great business is really too big to be human,” Ford himself once told the historian Allan Nevins.

  Throughout the twenties, Henry Ford steadily lost touch. He had played a critical role in breeding new attitudes in both workers and customers. But as they changed, he did not, and he became more and more a caricature of himself. “The isolation of Henry Ford’s mind is about as near perfect as it is possible to make it,” said Samuel Marquis, a Detroit minister who had headed the Ford Sociology Department when its purpose had been to help the employees and who later became its harshest critic. If Ford was still known outside Detroit as a benefactor of the common man, that reputation had diminished in Detroit itself. There he was known as an owner who pushed men to the extremes of their endurance in order to serve his machines. His labor practices turned harsh and ugly, and he became bitterly antilabor. As the working population of the entire country became increasingly restless and sophisticated, he turned to the fist and the club to maintain his power. His treatment of the workingman, once so widely praised, now became the very symbol of oppression.

  Ford was a giant company run more and more by the whim of an aging, mean-spirited, often irrational eccentric. It was no longer a creative company focused on an exciting new idea and headed by an ingenious leader. Now, the more modern the idea the more likely Henry Ford was to oppose it. On occasion he would talk about trying something new, and there would be a flurry of activity, and then he would completely forget what he had started, and the idea would slowly die. For its engineers and designers, the Ford Motor Company, only a decade earlier the most exciting place to work in America, was professionally a backwater. Sycophants rose, and men of integrity were harassed. Rival companies were pushing ahead with technological developments, and Ford was standing pat with the Tin Lizzie. His own best people became restless under his narrow, frequently arbitrary, even ignorant policies. He cut off anyone who disagreed with him. Anyone who might be a threat within the company, because of superior leadership ability, was scorned as often and as publicly as possible.

  Eventually he drove out Big Bill Knudsen,
the Danish immigrant who was largely responsible for gearing up the Ford plants during World War I and was widely considered the ablest man in the company. Knudsen was a formidable production man who had been in charge of organizing and outfitting the Model T assembly plants; he had set up fourteen of them in two years. An admired man in the emerging society of industrial Detroit, he was immensely capable and hardworking, and he employed none of the tactics of intimidation used by so many of the other top Ford people. He cajoled and inspired rather than threatened; in an era of such primitive management, that set him apart, not entirely to his own good. Similarly, his prodigious work during World War I made him a target of perverse attacks by Henry Ford. Knudsen was a big, burly man, six-foot-three and 230 pounds, and he drank, smoked, and cursed, all of which annoyed the puritanical Ford. Worse, Knudsen was clearly becoming something of an independent figure within the company. He was also drawing closer to Ford’s son, Edsel, believing him a young man of talent, vision, and most remarkable of all, sanity. Together they talked of trying to improve the Model T. They were sure that the ability to change gears—which meant that the gears would operate with different ratios—was the coming thing, and they talked of amenities such as two front doors, not just one. All of this merely infuriated the senior Ford and convinced him that Knudsen was an intriguer and becoming too big for his place. Ford took his revenge by making a great show of constantly countermanding Knudsen’s production decisions. Knudsen became frustrated with these public humiliations and with the company’s failure to move ahead technologically. He finally told his wife that he did not think he could work there any longer. He was sure he was going to have a major confrontation with Henry Ford.