“I can’t avoid it if I stay,” he said, “and I can’t stay and keep my self-respect. I just can’t stand the jealousy of the place anymore.”
“Then get out,” she said.
“But I’m making fifty thousand a year. That’s more money than we can make anywhere else.”
“We’ll get along,” she said. “We did before you went to work there.”
In 1921 he quit, virtually forced out. “I let him go not because he wasn’t good, but because he was too good—for me,” Ford later said.
Knudsen went to General Motors, where he was almost immediately put in charge of the company’s sluggish Chevrolet division. It was the perfect time to join GM. What Ford had once done better than anyone else, others now did as well or better; what he had never learned about business and marketing—there had been no need to learn because he could dictate style and taste—others now did with exceptional skill. Alfred P. Sloan of GM was putting together a modern automotive giant, building on Ford’s advances in simplifying the means of production and bringing to that manufacturing success the best of modern business practices. Within three years of Knudsen’s arrival, GM became a serious challenger to Ford.
As good men left in ever greater numbers and GM became an ever more formidable competitor, Henry Ford responded by turning in on himself and surrounding himself with thugs. His dealers, watching the rise of Chevy and sensing that Chevy was listening to its dealers and customers as Ford was not, pleaded with him to change. He turned a deaf ear. By the early twenties the rumblings from the dealers were mounting. In particular they wanted changes in the ignition system. Some of them were invited to Detroit to meet with Henry Ford.
“You can have them [the changes] over my dead body,” Ford said. “That magneto stays on as long as I’m alive.” Later that same day Bill Klann, one of Ford’s principal engine men, ran into Edsel Ford.
“Don’t you think your dad made a mistake?” he asked.
“Yes,” said Edsel, “but he’s the boss, Bill.”
At almost the same time some of the dealers asked Ford if he would vary the color of the Model T. “You can have them any color you want boys, as long as they’re black,” Ford answered.
A year later, in 1922, he listened to a group of Ford salesmen warn about the challenge from Chevy and then abruptly dismissed it. “Well, gentlemen,” he said, “as far as I can see, the only trouble with the Ford car is—that we can’t make them fast enough.”
He had become so egocentric that criticism of the Model T struck him as criticism of himself. Soon Chevrolet began to surge. Ford defiantly stayed with the Model T. Perhaps 1922 can be considered the high-water mark of Ford’s domination of the market. Sales were never higher, and with an average profit of $50 a car, the company netted more than $100 million. From then on it was downhill. As Chevy made its challenge, the traditional Ford response, simply cutting back on the price, no longer worked. The success of that maneuver had been based on volume sales, and the volume was peaking. From 1920 to 1924, Ford cut the price eight times, but the thinner margins were beginning to undermine Ford’s success. The signs got worse and worse. For the calendar year ending February 1924, the Ford company’s net profit was $82 million; of that, $29 million came from the sales of spare parts. If anything reflected the stagnation of the company, it was that figure.
In 1926 Ford’s sales dropped from 1.87 million to 1.67 million. At the same time, Chevy nearly doubled its sales, from 280,000 to 400,000. America’s roads were getting better, and people wanted speed and comfort. Chevy, unlike Ford, was responding. In the face of GM’s continuing challenge, Henry Ford’s only response was once again to cut prices—twice in that year. The Model T was beginning to die. Finally, in May of 1927, on the eve of the manufacture of the fifteen-millionth Model T, Henry Ford announced that his company would build a new car. The T was dead. His domination over a market that he himself had created was over. With that he closed his factories for retooling, laying off his workers (many of them permanently).
The new car was the Model A. It had shock absorbers, a standard gearshift, a gas gauge, and a speedometer, all things that Chevy had been moving ahead on and that Ford himself had resisted installing. In all ways it seemed better than its predecessor—more comfortable, twice as powerful, and faster. At first the nation seemed to hunger for the long-awaited new car from Ford. When it was finally ready to be revealed, huge crowds thronged around every showplace. In New York, 100,000 people turned up at the dealership to see the unveiling. In order to accommodate the mob, the manager moved the car to Madison Square Garden. Newspapers ranked the arrival of the Model A along with Lindbergh’s solo transatlantic flight as the top news story of the decade. The car was an immense success. Even before it was available there were 727,000 orders on hand.
Yet the Model A’s success was relatively short-lived, for once again Henry Ford froze his technology. Even the brief triumph of the Model A did not halt the downward spiral of the company. Henry Ford remained locked into the past. He grew more erratic and finally senile. At the end of his life he believed that World War II did not exist, that it was simply a ploy made up by the newspapers to help the munitions industry. No one could reach the old man anymore. It was a spectacular self-destruction, one that would never again be matched in a giant American corporation. It was as if the old man, having made the company, felt he had a right to destroy it.
With Knudsen’s departure the burden of trying to deal with Ford fell on his son, Edsel. Gentle and intelligent, Edsel Ford reflected the contradictions in his father’s life. He had been born while the Fords were still poor. (As a little boy Edsel had written Santa Claus a letter complaining: “I haven’t had a Christmas tree in four years and I have broken all my trimmings and I want some more.”) By the time he entered manhood, his father was the richest man in the country, unsettled by the material part of his success and ambivalent about the more privileged life to which his son was being introduced. Henry Ford wanted to bestow on his son all possible advantages and to spare him all hardship, but, having done that, he became convinced that Edsel was too soft to deal with the harsh, brutal world of industry, symbolized by nothing better than the Ford Motor Company.
Edsel Ford was not a mechanical tinkerer himself, but he had spent his life apprenticing in the auto business, and he knew who in the company was good and who was not; he was comfortable with the engineers and the designers. Edsel knew that times were changing and that the Ford Motor Company was dying. During his father’s worst years, he became a magnet for the most talented men in the company, who came to regard his defeats as their defeats. He was a capable and confident executive, and an exceptionally well-trained one. His apprenticeship was a full and thorough one—it lasted thirty years. Absolutely confident in his own judgment, about both people and cars, Edsel Ford was beloved by his friends and yet respected in the automobile business for his obvious good sense. “Henry,” John Dodge, Henry Ford’s early partner and later his rival, once said, “I don’t envy you a damn thing except that boy of yours.”
Edsel Ford was the first scion of the automotive world. He married Eleanor Clay, a member of the Hudson family, which ran Detroit’s most famous department store. They were society, and the marriage was a great event, the two worlds of Detroit merging, the old and the new, a Ford and a Clay. When the engagement was first announced, reporters flocked to Eleanor’s home to interview her. “We are going to live very simply,” she told them. They lived simply in Grosse Pointe (a thirty-room house), in Hobe Sound, Florida, and in Seal Island, Maine (where the house was so grand and the security against kidnappers so complete that Edsel’s son, Henry Ford II, later said that while growing up there during the summers he never saw anyone outside of his immediate family and the servants).
Henry Ford hated the fact that Edsel had married into the Clay family, of the Detroit elite, and had moved to Grosse Pointe. He knew that Edsel went to parties and on occasion took a drink with his friends, not all of whom were
manufacturing people and some of whom were upper-class—worse, upper-class citified people—and was sure all this had corrupted him. It was as if Edsel, by marrying Eleanor, had confuted one of Henry Ford’s favorite sayings: “A Ford will take you everywhere except into society.”
On top of all his other burdens, it was Edsel’s unfortunate duty to represent the future to a father now absolutely locked in a dying past. Genuinely loyal to his father, Edsel patiently and lovingly tried to talk Henry Ford into modernizing the company, but the old man regarded his son’s loyalty as weakness and spurned him and his advice, preferring instead the sycophancy first of Charlie Sorensen and then of Harry Bennett. Edsel, recognizing the growing force of the GM challenge and the professionalism of the management group that Alfred P. Sloan had put together, argued constantly for a new, professional managerial staff at Ford; the old man snapped back that if he wanted a job done correctly, he would always pick a man who knew nothing about it. Sometimes he would give Edsel permission to start a project and then, without Edsel’s knowing it, gleefully have the project stopped. On occasion he would give Edsel a chance, but even then it would turn out to be more of a half chance than a full one. Edsel, for example, pushed for hydraulic brakes, but his father hated them. He had tried them when he was young, he said, and a hose had come loose and the brakes had failed. Finally Edsel persuaded his father to drive one of several cars he had equipped with hydraulic brakes. Henry Ford got in, sat down, and started the car. It went a half mile and then stopped. That was it for hydraulic brakes as far as Henry Ford was concerned.
When everyone else in the company agreed that a particular issue had to be brought before the old man, Edsel became the designated spokesman. With Knudsen now gone, he usually stood alone. He was probably the only person who told the truth to his father. It was Edsel’s job to tell his father that sales were down, Edsel’s job to represent the six-cylinder engine, which the company desperately needed, Edsel’s job to speak for better suspension systems. Others, such as Sorensen, were supposed to come to Edsel’s defense during these meetings, but they never did. Sorensen, brutal with everyone else in the company, was the complete toady with the founder, and always turned tail in the face of Henry Ford’s opposition. Once when Edsel was to make the case for hydraulic brakes still again, he checked with Sorensen and Ed Martin, one of the top plant men, before the meeting, and they both promised Edsel they would support him. When Edsel started to make his pitch, Ford stood up and shouted, “Edsel, you shut up!” There was not a word from Sorensen or Martin.
All the while the competition was getting better faster. Alfred Sloan was a formidable administrator, and Knudsen was perhaps the ablest all-around manufacturing man of the twenties and thirties. Chevy was introducing styling, and offering different colors, thermostats for heaters, and improved brakes. Ford stood still. Gadgets and knickknacks, Henry Ford called them. He knew his customers, knew that they were simple, God-fearing people who would not want these corrupting luxuries and would not desert him. But it proved that he no longer knew his customers so well, and Sloan and his bright young managerial people knew them better. Chevy had hydraulic brakes in 1924; Ford added them fourteen years later. When Chevy went to a six-cylinder car in 1929, Edsel pleaded even more passionately with his father to modernize the Ford engine. A six, his father retorted, could never be a balanced car. “I’ve no use for an engine that has more spark plugs than a cow has teats,” he said. After all, he had built one back in 1909, and he had not liked it. The six-cylinder engine stood between the two Fords. The quintessential story about Henry Ford and the six-cylinder engine—for it reflects not just his hatred of the new but his contempt for his son as well—concerns a project that Edsel and Laurence Sheldrick, the company’s chief engineer, had been working on. It was a new engine, a six, and Edsel believed he had gotten paternal permission to start experimenting with it. He and Sheldrick labored for about six months, and they were delighted with the prototype. One day when they were just about ready to test it, Sheldrick got a call from Henry Ford.
“Sheldrick,” he said, “I’ve got a new scrap conveyor that I’m very proud of. It goes right to the cupola at the top of the plant. I’d like you to come and take a look at it. I’m really proud of it.”
Sheldrick joined Ford at the top of the cupola, where they could watch the conveyor work. To Sheldrick’s surprise, Edsel was there too. Soon the conveyor started. The first thing riding up in it, on its way to becoming junk, was Edsel Ford and Larry Sheldrick’s engine.
“Now,” said the old man, “don’t you try anything like that again. Don’t you ever, do you hear?”
In 1936, his company under mounting pressure, Henry Ford reluctantly built a six-cylinder engine. It went into production a year later. But moves like this were too late.
Those who had once been fervent admirers watched now in horror as he destroyed his own company. “The world’s worst salesman,” Fortune called him. He became more and more distant from the reality of his own company. As he became more senile and more threatened by growing pressure from a restive labor force, he began to cut back on the power of Charlie Sorensen and to grant it instead to Harry Bennett. Sorensen had been a brutal man, hated by many, capable of great cruelty, eager to settle most disputes with his fists, but at least he knew something about production. Bennett, head of the company’s security forces, was worse. He was an ex-sailor who had boxed professionally under the name Sailor Reese, and he had come to power in the days after World War I, when his assignment was to hire bullies and ex-cons and wrestlers and boxers to help control the plant and keep the union out. Bennett was well suited for that role. He kept a pistol in his office and often took target practice while talking with visitors. Those he could not crush he sought to co-opt. He might offer someone, as he did John Davis, a senior sales executive, a farm, or a house, or he might simply give someone a better car than the one he had. The first time John Bugas, a local FBI man, came to see Bennett, he found when he returned to the parking lot that his Ford had been replaced by a Lincoln, the Ford company’s luxury car. But Bennett greatly favored the stick over the carrot. For his was an empire within an empire, and that inner empire was built on fear. He padded his pockets with Ford money—the finances of the company were in chaos, and there was no coherent bookkeeping. He built at least four houses with his appropriated wealth. His rise exactly paralleled the decline of the old man, and he played on all the fears the old man had, especially fear of labor and fear of kidnapping. Ford had faith that Bennett, with his connections in the underworld, could stop any attempt to kidnap his son or grandchildren. Ford loved Bennett’s use of force to intimidate people. “Harry gets things done in a hurry,” he liked to say.
Bennett’s power over Ford grew almost without check in the 1930s, when Ford was in his seventies. His hold on the founder was almost complete, to the distress of Ford’s family. Board meetings were a travesty. Often Ford did not show up. Or he would walk in at the last minute with Bennett and after a few minutes say, “Come on, Harry, let’s get the hell out of here. We’ll probably change everything they do anyway.” Once the magazine writer William Richards was in a car with Ford and Bennett, and he asked Ford who was the greatest man he had ever known—after all, in so rich and varied a career he had known quite a few exceptional people. Ford simply pointed at Bennett and said: “Him.”
At the very end he used Bennett as his principal weapon against his son. The last years were truly ugly. Sure that he was protected by Ford, Bennett harassed Edsel mercilessly, to the old man’s obvious pleasure. Already emotionally beaten down by his father, Edsel had become a sick man. He had remained loyal to his father and endured his humiliations while healthy. Now, battling stomach cancer, he had less and less to fight back with. In 1942 Edsel got undulant fever from drinking milk from his father’s dairy; Ford disapproved of pasteurization. The old man blamed his illness on Edsel’s bad habits. Edsel’s last years were hard, as he struggled to expedite the war-production work his fat
her hated while at the same time resisting his ailments. In 1943 Edsel died. He was only forty-nine. Almost everyone who knew both Henry and Edsel Ford thought the son had really died of a broken heart. Four days after Edsel’s death the old man came to work, turned to Ernest Liebold, his secretary, and said, “I am going to fire everyone around here who worried Edsel.”
Reckoning Page 12
