Reckoning

by David Halberstam

  It was the final malevolent chapter in Henry Ford’s own life. Not only had he destroyed his son and all but ruined a once-great industrial empire, but also as World War II approached, he was treating the government of the United States as if it were an enemy. When Bill Knudsen, by then the head of war production, came out in 1940 to talk to him about building Rolls-Royce airplane engines at Ford for the British Spitfires, Ford turned him down.

  “You’re all right, William,” he said, “but you’re in with a bad bunch down there.”

  By the middle of the war, the Ford Motor Company was in such poor shape, teetering on collapse, that high government officials pondered whether to take it over, for the government had to keep the giant going. Without the stimulus of the war and the work it eventually brought the company, it is possible that Ford might have failed completely. As the government debated, two women stepped forward. Clara Bryant Ford and Eleanor Clay Ford, one Henry Ford’s wife and the other Edsel’s widow, had watched it all with dismay—the old man’s senility, the crushing of Edsel, the rise of Bennett—but with a certain helplessness. “Who is this man Bennett who has such power over my husband and my son?” Clara Ford once asked. She had hated it when Bennett and Sorensen had spoken for Henry against Edsel and had participated in and encouraged his destruction. Now both women feared that the same forces might prevent young Henry, Edsel’s son, from ascending and assuming power.

  Henry Ford II had been serving in the navy during the war, enjoying a taste of personal freedom. But in August 1943, thanks to intervention by his mother and grandmother, he got orders sending him back to Detroit; the nation’s highest officials feared that after Edsel’s death, Harry Bennett might actually take over the company. He returned reluctantly, but he was the firstborn of Edsel Ford, and familial obligation demanded it. He had no illusions about the challenge ahead. He knew that the struggle would be difficult, and that except for a very few men the Ford Motor Company was a corrupt and corrupting place.

  Bennett and Sorensen immediately began belittling him, Bennett by undoing what young Henry was attempting to do each day and Sorensen by demeaning him in front of other people and by always calling him “young man.” “He might just as well have called me Sonny,” Henry later told friends. Henry Ford II might have titular power—he was named vice-president in December 1943—and the power of blood, but unless his grandfather moved aside and Bennett left the company, he would never be able to take control. Even as he returned, Bennett was in the process of destroying Sorensen, and young Henry seemed very vulnerable. Again Eleanor Clay Ford put her foot down and forced an issue. Widowhood had stirred in her the kind of indignation her husband had always lacked. He had been too loyal to challenge his father, but now Edsel’s company stock was hers to vote, and she felt a great deal less loyalty. She threatened to sell her stock unless old Henry moved aside in favor of his grandson. Her son would not be destroyed as her husband had been. Clara Bryant Ford backed her completely. They fought off the old man’s excuses and his delaying ploys. With that threat, and a sense that these women were intensely serious, Henry Ford finally, furiously, gave up, and Henry Ford II took control.

  Henry Ford had outlived his era and his usefulness. Once a popular figure with the average man, he had become known as one of the nation’s leading labor baiters. He had helped usher in a new era of economic dignity for the common man, but he could not deal with the consequences. His public statements during the Depression, while millions suffered—including thousands upon thousands of his own workers—were perhaps the most pitiless ever uttered by any capitalist. He repeatedly said that the Depression was good for the country and the only problem was that it might not last long enough, in which case people might not learn enough from it. “If there is unemployment in America,” he said, “it is because the unemployed do not want to work.” His workers, embittered by his labor policies, marched against him in the thirties, and were put down by Bennett’s truncheons and guns. His security people were so vicious that when Ford’s workers marched, they wore masks over their faces to hide their identity—something rare in America.

  In business he was overtaken by General Motors, which relentlessly modernized its design, its production, and its marketing. GM fed the appetites Henry Ford had helped create. In addition, GM inaugurated a dynamic that haunted the Ford company for the next fifty years; buyers started out driving Fords when they were young and had little money and slowly, as their earnings rose, graduated to more expensive GM cars. As a workingman’s hero, he was replaced by Franklin Roosevelt. What had once been charming about his eccentricity now became contemptible.

  His legacy was a complicated one. Forty years after his death few remembered the ugliness of his final years. The harshness of his actions had been softened by time. He became again the classic symbol of what a simple man with the right idea could do. He was also, in casual recollection, still the personification of the modern industrial era, in which the common man was paid well enough to consume as well as produce. That, along with his role in accelerating mass production, was his most vital contribution to the world. But within Detroit and the Ford Motor Company, his legacy remained in many ways much darker. In his first decade and a half he had been brilliant—charmed, really, his every move the right one—but what he had done to the company in his next thirty years still sorely burdened it.

  Nothing reflected his failures more tellingly than the fate of the River Rouge manufacturing complex. It was an industrial masterpiece, and it should have stood long after his death as a beacon to the genius of its founder. But the treatment of human beings there had been so mean and violent, the reputation of the Rouge so scurrilous, that in the postwar era it stood as an embarrassment to the new men running Ford, a reputation that had to be undone.

  The bequest had other unfortunate aspects. By fighting the unions so intransigently, Ford and the other Detroit industrialists had ensured that when the unions finally won power they would be as strong as the companies themselves, and that there would be a carryover of distrust and hatred which would make them—even in the postwar years when the unions became a junior partner—an adversarial, distrustful junior partner. There were other, more concrete, burdens as well. Because he had been locked in the past and had frozen his technology, the company was on the verge of bankruptcy. Worse, he had done something that was truly cruel and, in a family company, professionally ruinous—he had destroyed his own heir, one who was, in Detroit’s phrase, a damn good car man. There was no doubt in the minds of the ablest Ford men of that day, and of their competitors at GM, that if the old man had stepped aside, Edsel Ford would have improved the company tremendously. But he never got the chance. He was crushed, and a whole generation of good men were forced out, which put a heavy weight on the succeeding generation.

  When the passage of family leadership took place, it was to Edsel’s son. The second Henry Ford was twenty-eight years old when he took over in September 1945, and he had had only the scantest apprenticeship in this vast and complicated world. No one who knew the young Henry Ford over the next thirty-five years ever doubted his shrewdness, or his toughness, or his single-minded purpose—to save, secure, and strengthen the Ford Motor Company. Nor did they doubt that, having taken over the company very young, he had handled himself well, choosing able, older executives, putting his ego aside and deferring to them. But in the years that followed, the fifties and the sixties, the top car people in that company sensed in Henry Ford a doubt about his own automotive instincts. It was a lack of feel, and it was expressed in his caution and conservatism. He was a good, serious businessman, but he had no natural touch. He had never served a real apprenticeship.

  Probably no major industrial company in America’s history was ever run so poorly for so long. Only its sheer size saved it, that and, in the war, the government’s dependence upon it for military production. A smaller company managed so badly would surely have closed. By the beginning of 1946, it was estimated, Ford was losing $10 million
a month. The chaos was remarkable, but some of it, at least, was deliberate. The old Henry Ford hated the government and in particular the federal income tax, and by creating utter clerical confusion he hoped to baffle the IRS. He also hated bookkeepers and accountants. As far as he was concerned, they were parasitical, and from time to time he enjoyed arbitrarily getting rid of them. There was almost a ritual to it.

  “What do these people do?” he would ask his aide as he strode into a room filled with white-collar workers.

  “They’re accountants, Mr. Ford,” the aide would say.

  “I want them all fired,” he would say. “They’re not productive, they don’t do any real work. Get them out of here today.”

  Fired they would be, though some of them might later slip back into the company. The result was a bookkeeping nightmare.

  When Arjay Miller, who later became president of the company, joined Ford in 1946, he was given an assignment by Ernie Breech, then the executive vice-president. Breech, who had just come over from Bendix, was both an accountant and an industrialist, and the first thing he wanted was the profit forecast for the next month. So he sent Miller to get it. Miller went down to the office building, where the financial operations were kept. There he found a long table with a lot of older men, who looked to him like stereotypes of the old-fashioned bookkeeper. These men were confronted by bills, thousands of bills, and they were dividing them into categories, A, B, C, D. The piles were immense, some several feet high. To Miller’s amazement the bookkeepers were actually estimating how many million dollars there were per foot of paper. That was the system, if it could be called a system.

  Twenty years earlier it had been worse. Bothered by their inability to keep up with the bills, they had broken them down into two categories, those under $10 an item and those over. Serious investigation had shown that the average figure for bills under $10 was $2.43, and so they used that figure to multiply against the gross weight of the paper.

  Miller, on his mission, asked what the estimates for the following month’s profits were. Charles Martindale, one of the men working there, looked at him and asked, “What do you want them to be?”

  “What?” asked Miller,

  “I can make them anything you want,” said Martindale.

  He meant it, Miller decided. It was truly a never-never land.

  Harry Bennett’s last stand took place on the farms that Henry Ford had established in Dearborn to remind him of his origins. There a man named Ray Dahlinger, a surviving warlord from the Bennett years, was ensconced, and he ran the farm as if it were his empire. He had several hundred people on his payroll, which came to about $500,000 each year. Though Dahlinger had been a Bennett deputy, he had stayed on long after the others had been fired. He was, it seemed, a close friend of Henry Ford’s widow. Indeed, Dahlinger’s wife, it was said by many, including her son, who later wrote a book on the subject, had been Henry Ford’s mistress. Clara Ford had in time taken her revenge on Henry in an odd, indirect fashion—by being exceptionally protective of Dahlinger, the mistress’s husband. Thus secure, Dahlinger treated everyone, including the new regime of Henry Ford II, with a special imperiousness, and indulged himself freely. He was the last vestige of the days when Bennett and his people, as their whim directed, siphoned off company money for their own personal use. He had his own valet and his own barber and a legion of gardeners. The gardeners did not work in vain, for the terraces that they tended were wonderful. The grapes in the greenhouse were huge, each bunch hand-tied to give it more sun. It was a lovely life for Ray Dahlinger—gargantuan grapes, beautiful roses, breathtaking terraces, a striking waterfall; a luxurious, unmolested existence, all of it paid for by the Ford Motor Company.

  Young Henry Ford wanted to end this dukedom. So in 1947 he called in Arjay Miller, by then an assistant treasurer.

  “Arjay,” said Ford, “you’ll be pleased to know that Dahlinger now works for you.”

  “Does he know this?” Miller asked.

  “No,” said Henry Ford. So it was decided that Ford would write a letter advising Dahlinger that he worked for Miller. That was done, and although Miller was a man clearly on the rise, Dahlinger treated him with contempt.

  “Young man,” he said, “you may not remember a time when another financial officer, a fellow named Burt Craig, came and told me we were losing more than five million a year, and I told him if he didn’t like it he could stick his nose up my ass.”

  That might be, Miller said, and then tried to suggest that things were going to be done a little differently from then on, that all expenditures would be countersigned in the treasurer’s office, and that if Dahlinger had any questions he could call Henry Ford. Dahlinger grumbled but accepted the new system.

  About three years later, Clara Bryant Ford died. Henry Ford was in New York at the time, and he picked up the phone and called Arjay Miller in Detroit.

  “Arjay,” he said, “I have just one message for you—fire Dahlinger.”

  Miller did that, finding the mighty Dahlinger unexpectedly meek. Miller told him he had twenty-four hours to get off the property. With that the old era finally ended.

  Henry Ford had hated accountants so much that he left his grandson a company in absolute financial disrepair. It was not surprising, then, that the young Henry Ford, seeking to bring sense to the madness he found all around him, turned to an entirely new breed of executive, the professional managers, the bright young financial experts who knew, if not automobiles and manufacturing plants, at least systems and bottom lines. To them Henry Ford II gave nearly unlimited power. Thus again did the past influence the future. For the past was always present. If the old order had been more sensible, perhaps the new order would have been more sensible as well.

  PART THREE

  6. THE VICTOR

  THE FIRST AMERICAN VISION of Japan in the postwar years was a liberal one. It came, ironically, from a deeply conservative man, Douglas MacArthur, the Supreme Commander for the Allied Powers. His was the first and last American raj. He had a powerful sense of both his nation’s destiny and his own; like Charles de Gaulle, whom as a leader he greatly resembled, he saw no difference between the two. Difficult, egocentric, vainglorious, he demanded complete loyalty from those beneath him but did not always bestow comparable loyalty on those above him. He saw himself without living peers; the only men, he thought, from whom he might learn were Lincoln and Washington. His belief in his own vision and fate was so strong that few other men dared challenge it. Politically that made him something akin to a live hand grenade. “Douglas,” Franklin Roosevelt once told him in a moment of insight, “I think you may be our best general, but I believe you could be our worst politician.” He was almost incapable of saying anything respectful of any general who had fought in the European theater, most particularly Dwight Eisenhower, his former aide, whose strengths were precisely MacArthur’s weaknesses. For Eisenhower was gifted at restraining his own ego and blending the talents of diverse, headstrong people for a common purpose.

  No civilian who ever dealt with MacArthur relished the assignment, and during the Korean War, Secretary of State Dean Acheson (who called him “the Oracle”) said of him, “While General MacArthur had many of the attributes of a foreign sovereign...and was quite as difficult as any, it did not seem wise to recognize him as one.” Harry Truman, angered by MacArthur’s challenge to civilian authority, once pointed to a portrait of him and told Carlos Romulo of the Philippines, “You know who that is? That’s God.”

  “Mr. President,” Romulo answered, “there are millions of Filipinos who think he is just that.”

  He was alternately capable of nobility and of remarkable pettiness. Obeyed and revered, he grew in stature; disputed, he became mean and petulant, given to sulks. In some ways Japan, then, was the perfect stage for him; it was a country where authority was respected and his word would be law. There, as was not the case in America, the head of government and the legislature would not lightly confront him; there they would rubbe
r-stamp his wishes. There he would go unchallenged, at least directly, by either Americans or Japanese. (If an American journalist wrote something that displeased him, he would not censor that correspondent, but, since he controlled entry to Japan, he would make sure that the offending reporter did not reenter his domain.) It was the perfect situation for him, and it evoked at the end of a distinguished but often contentious military career his best qualities.

  He knew his was a historic role, and his vision for the Japanese was generous. He intended to take this militaristic, authoritarian society, many of whose practices were still feudal, and bring it into the modern age. It was his finest hour, and certainly one of his country’s. His country behaved generously in no small part because he forced it to.

  He was, like de Gaulle, the complete thespian. His every move was studied; he was always aware of his position and the symbolism of his deeds. Vain about his appearance, he worked endlessly to cover his baldness with his remaining wisps of hair. Although he almost always wore glasses, he refused to be photographed wearing them. (De Gaulle, facing the same problem late in his career, held presidential press conferences before which questions had been handed out to friendly reporters. That allowed him to memorize the answers so that—in those days before TelePrompTers—he would not have to squint at cue cards or stumble through impromptu answers.) Everything MacArthur did was about impact and about the theater of being a general. “If MacArthur had ever gone on stage, you never would have heard of John Barrymore,” said Rear Admiral James Doyle, who had watched MacArthur persuade the reluctant navy to undertake the amphibious landing at Inchon. “I seem to have more confidence in the navy than the navy has in itself,” MacArthur had said at the meeting. “The navy has never let me down in the past, and it will not let me down this time.” The star of the show would always be Douglas MacArthur. “He does not intend that any other actor shall walk on the stage and receive any applause if he can help it,” said General Robert Eichelberger, one of the officers who knew him best. For him to play his own role to the fullest, others would have to see their roles diminished. That quality made him endless enemies.