Mass production at the Highland Park factory spelled the end of the primacy of the skilled worker. European factories still retained a high proportion of skilled labourers during the 1920s, but by the mid-1930s the economics of manufacture, coupled with the crippling effects of the Great Depression, only allowed niche luxury and sports models to be made by skilled craftsmen. While in 1914 most European car makers were generally producing cars at a rate of one per man per year, Ford’s factories were producing twelve cars per man-year – and this was before the moving assembly line had been fully perfected. As late as 1927, French car workers were taking on average three hundred man-days to make a car, whereas their American counterparts at Ford and GM needed only seventy.
The US, with its vast internal market, low raw material costs and no great tradition of skilled labour, was well suited to the techniques of mass production. The history of the car industry in Europe – and in particular in the cradle of the Industrial Revolution, Britain – can be directly linked to the painful erosion of the status and importance of skilled craftsmen. In America, however, that shop-floor war was never as charged or as significant. Yet the employment and wealth that Fordization brought came at a high price: the inevitable dehumanization of the workforce not only sounded the death knell for the skilled worker but also consigned thousands of car workers to a slave-like existence.
In his pursuit of mechanization, Ford enthusiastically adapted the fashionable new ideas of the time-and-motion pioneer Frederick Taylor, whose peculiar philosophy attempted to apply standardized scientific measurement to almost every aspect of life. But, at least at this stage, Ford was no Taylorist tyrant. He was also very keen to retain, and indeed to grow, his workforce, introducing a system of high wages and attractive benefits. In 1905 every Ford worker received a huge Christmas bonus of $1,000. In 1911 workers at Ford’s new British factory at Trafford Park, Manchester, were paid £3 for a six-day week – twice the average industrial wage in the UK. In 1913 wages in US plants rose on average by 15 per cent. In January 1914 Ford unveiled his greatest industrial relations coup yet: he publicly guaranteed a minimum rate of $5 for a day’s work, assuming the worker in question met his production targets. The $5 rate was significantly more than any other major employer was currently offering to semi-skilled industrial workers, and it won him worldwide publicity and applause. Yet Ford’s new payroll strategy was not born of altruism. He reasoned that, with more money to spend, his workers would lavish a substantial proportion of it on Ford cars. And the inflation of the wartime years meant that by 1918 the much-lauded $5 per day was actually worth only $2.80 in 1914 terms. In addition, in order to qualify for their $5 day, Ford’s workers had to knuckle down to the tough new regime being imposed at Highland Park. The camaraderie and cross-departmental relationships that had flourished in traditional engineering firms had gone, to be replaced by a system of snoopers, or ‘spotters’, who ensured that the new shop-floor regulations were rigorously observed. Workers were not allowed to sit, smoke or talk on the job. (Some learned to move their lips, in what became known as the ‘Ford whisper’, while keeping their faces immobile – the freezing of their features being nicknamed locally ‘the Fordization of the face’.) Ford officials even visited workers’ homes to check on their dietary and recreational habits, financial health and moral well-being. Any individuals who failed to conform to the Ford code, and were found guilty of ‘malicious practice derogatory to good physical manhood or moral character’, were sacked. In return for their new-found affluence, Ford’s workers were, for the most part, treated as automata.
Seeing that the assembly-line experiment at Highland Park had been a success, in 1916 Henry Ford began building a vast new automated complex on the banks of the River Rouge in western Detroit. The Dodge brothers – major shareholders in the Ford Motor Company who also ran their own, modest, car manufacturing business – tried to halt the expansion, alleging that Ford’s profits should be diverted as dividends to shareholders (such as themselves) rather than invested in a new plant. In 1917 Ford’s lawyers shrugged off the challenge, although they were unable to avoid the subsequent judgement that Ford should pay an extra special dividend – an unhelpful ruling that convinced the enraged Henry Ford to rid himself of all his minority shareholders. The Dodge brothers were not a thorn in Ford’s side for long, as they both died in 1920. By the time of their death Ford had successfully converted his growing car-making empire into a family-owned and family-managed business.
Ford did not have a good First World War. A rightwing populist pacifist by nature, he strongly opposed conscription and anything that smacked of benevolence towards the allied cause, at least until America’s own entry into the war. His much-vaunted Peace Ship Expedition to Europe in 1915, designed to publicize American isolationism and, rather more naively, to promote ‘universal peace’ between the warring European powers, predictably proved a political and public relations disaster. President Wilson took an instant dislike to the brash, opinionated car maker and wisely refused to sanction the project, while the media had a field day with Ford’s illconceived and incoherent press conferences. The Springfield Republican labelled him ‘God’s Fool’, while the New York Tribune responded to his bizarre proposal to organize a Europe-wide general strike of armies and workers on Christmas Day 1915 with the sardonic headline ‘GREAT WAR ENDS CHRISTMAS DAY: FORD TO STOP IT’. The ‘Peace Ship’, meanwhile, never sailed further than the neutral nations of Scandinavia, and none of Ford’s absurd pacifist ambitions was ever realized.
When, after America entered the war in April 1917, Ford did grudgingly lend his factories to the war effort, it was too late. The sixty Packard-powered, Eagle-class patrol craft that the Rouge River plant produced, out of an original US Navy order for one hundred boats, arrived too late to see action. By 1 December only seven had been delivered to the navy, which never asked Ford to supply it again. And while Ford had publicly affirmed that he would provide all Ford-made boats and munitions ‘without one cent of profit’, decrying those who accepted such ‘blood money’, he was later accused of making outrageous profits from the Eagles that were never delivered. These charges became even more resonant when it was revealed that Henry Ford’s only son, Edsel, had managed to avoid serving in the armed forces during the war. These draft-dodging accusations certainly helped Henry Ford lose the US senatorial election for Michigan in November 1918. Three years later allegations were made to the US Treasury that Ford had avoided paying any federal tax on his wartime profits – a tax bill that may have been as large as $29 million. The issue was still being hotly debated in the mid-1930s and remains unresolved to this day.
While Ford was creating the greatest industrial enterprise the world had ever seen, across the city of Detroit another automotive pioneer was binding a bizarre, ramshackle collection of struggling car makers into a cohesive conglomerate that would one day overtake Ford as the world’s biggest vehicle manufacturer.
William Crapo Durant died in April 1947, just a month before Henry Ford. But Durant’s was not a rags-to-riches story like Ford’s; his grandfather had not only been a rich and successful lumber merchant, but had risen to become governor of Michigan. Nor was Durant obsessed by cars, as Ford was. He invented many other machines – some successful, such as the Frigidaire electric icebox; and some not, like the Samson tractor, which you had to walk patiently behind – but always remained an enthusiast rather than a zealot. Ford was a businessman who loved to run his manufacturing empire and was loath to let it go; Durant was a fast-talking salesman who tired of businesses once he had acquired and developed them. His business strategy was exactly the opposite of Ford’s: he believed in consumer choice, rather than in selling the same single product at a rock-bottom price. And Durant was very different from the calculating, bullying tycoons who dominated the car industry after 1945. He was charming, handsome, creative – and easily distracted. Unlike contemporaries such as Ford, Chrysler or Chevrolet, he was also surprisingly modest and reticent. He has be
en called ‘the Great Gatsby of car making’. He made and lost two fortunes, and on his death was worth a mere $250.
Durant grew up in the little town of Flint, Michigan, the subsequent growth of which into one of the principal motor centres of America was largely his doing. He graduated from making delivery carts, which he soon made into the town’s biggest industry, to making cars, capitalizing the fledgling Buick company and making Flint one of the fastest-growing towns in America.
David Dunbar Buick was a Scottish plumber turned inventor who became a car maker at the relatively advanced aged of forty-five. Born in Arbroath, on Scotland’s east coast, his parents emigrated to America when David was two years old. Aged fifteen, Buick began to work for a plumbing fixtures firm in his native Detroit, which in 1882 he was able to rescue after it folded. Selling the firm in 1899, he invested in engine manufacture with his partner, Walter Marr, and together they built the first Buick car in 1903. Buick himself was never a ruthless businessman in the mould of countless Scots-American emigrants. In 1900 he had actually sold Marr the rights to the Buick Automobile name, and in 1903 sold 99 per cent of the rights in the new Buick Motor Car Company to the Briscoe brothers, Frank and Benjamin. Yet he and Marr were nothing if not persistent, and in 1904 they came up with the first saleable Buick, the Model B. Attracted by the Model B, William Durant offered to help bankroll the struggling new car maker, and in 1906 he built a new factory in Flint which was then the largest and most modern in the world.
Durant’s flair, energy and seemingly inexhaustible self-belief helped him to establish a small dealership network for Buick. However, he soon became convinced that only by the large-scale capitalization of an alliance of leading car makers could the fledgling US motor industry find the investment necessary to make a big success of the automobile. Accordingly, in the winter of 1907–8 Durant began negotiations with the fabulously wealthy and successful banking house of J. P. Morgan with a view to securing multi-million dollar backing for a group of manufacturers, which he called the United Motors Corporation. Durant later discovered that a United Motors Car Company already existed in New Jersey, and he and his partners thereupon agreed on the straightforward if insipid name of General Motor (GM).
J. Pierpont Morgan was the nation’s premier banker. Born in 1837, the year Queen Victoria came to the throne, he had built up an enormous banking fortune over sixty years, and in 1895 his personal guarantees had saved President Cleveland’s administration from bankruptcy. Morgan originally believed the automobile was a passing fad, and after his first meeting with the Tigger-ish Durant he dubbed the auto entrepreneur ‘an unstable visionary’. Durant nevertheless eventually convinced him otherwise, and was able to proceed on his quest with qualified backing from Morgan. What followed was a period of astonishing growth, as the banks nervously financed Durant’s rapid assembly of the world’s first car combine. Oldsmobile’s Fred Smith later declared that no one else but Durant, ‘the master salesman of all time’, possessed the vision to recognize that a ‘strong combination’ was exactly what the auto industry needed, and affirmed that Durant was the only man who could have created such an ambitious conglomerate: ‘No man ever lived who could sell such a variety of commodities in so short a space of time, cigars, buggies, automobiles and himself, believing wholeheartedly in his wares and in the last item especially.’
On 16 September 1908, Durant incorporated GM in New Jersey and sold Buick to himself as GM’s first car marque. He then swiftly bought the W. F. Stewart body plant in Flint, Albert Champion’s Detroit spark plug factory, and the nearby Oldsmobile plant, and additionally made the first cross-marque transfer, giving Oldsmobile the bestselling Buick Model 10 to rework as a premium product. Within months he had also purchased the Oakland Company, a car maker sited in Pontiac, to the north of Detroit, and run by his friend Edward M. Murphy, a former buggy maker whom Durant had helped to convert to the idea of automobile manufacture in 1907. Murphy was actually less than enthusiastic with the buyout than his eager partners, but found he could not argue with the $201,000 offer that Durant’s GM made for his tiny company, which in 1926 was formally renamed Pontiac. Within months, Durant had also added the budding auto manufacturer Cadillac to his growing portfolio of brands. In this instance, however, the indefatigable impresario found that he was facing a far tougher opponent than Murphy – one who, while seemingly at the end of his professional life, could still drive a hard bargain.
In 1893 the fifty-year-old precision toolmaker Henry M. Leland, who ran a company making bicycle gears and steam-tram power units, opened an automotive workshop on Detroit’s Trombly Avenue. In 1899 he merged his firm with the newly bankrupt Detroit Automobile Company and named the resulting business the Cadillac Automobile Company. In 1903 Leland unveiled his first Cadillac car, with the Sieur de Cadillac’s antique coat of arms fixed to the radiator cap. By 1908 Leland’s premium-priced Cadillac 30 was selling exceptionally well, emboldening the car maker to devise what became the brand’s enduring slogan: ‘The Standard of the World’. Leland also attracted the attention of the irrepressible Durant, who in 1909 found he had to offer far more for Cadillac than the $201,000 with which he had snared Oakland. The final negotiated price for Cadillac was $4.5 million, which even the resourceful Durant needed ten days to find.
By the beginning of 1910 GM was selling fifty thousand cars annually. But this was still way short of the 170,000 Model Ts that Henry Ford was producing every year. Nevertheless, in a gesture of amazing effrontery, Durant attempted to raise $8 million to buy the Ford Motor Company from under Ford’s nose. Ford’s directors agreed, but Henry Ford himself held firm and successfully blocked the deal.
Seeking other outlets for his expansionism, Durant floated a milliondollar stock issue and made his first overseas purchase, Bedford Motors, in London, which formed the kernel of what by 1912 was known as Bedford Motors (Europe). Not all of Durant’s purchases were as perceptive, though. He bought many companies for the engines or parts that they made, only to find that the businesses were on the brink of collapse and needed an injection of far more cash than they were worth.1 At the same time, Durant eschewed cash reserves, relying on income from sales to pay his operating expenses and to seal new acquisitions.
By the summer of 1910 the General Motors empire comprised twenty-five companies. Predictably, Durant’s seemingly endless spending spree and GM’s lightning growth had unsettled the banks. Durant’s creditors estimated Buick’s debt alone to be worth in the region of $7 million dollars, and at the end of 1910 resolved on a stop to new acquisitions and ‘a restriction of enthusiasm’. The Buick, Cadillac and Oldsmobile factories were temporarily closed. Durant went on the road and managed to borrow $8 million from an assortment of small country banks, dazzling their executives with his boundless enthusiasm and the paper value of GM’s constituent elements. But the big banks refused to play ball. Summoned to meet key investment bankers at the Chase National Bank on 25 September 1910, Durant was repeatedly upbraided for his debts and was refused any further loans. GM was only saved from receivership by an expertly professional presentation by Henry Leland, whose Cadillac division was at the time the most profitable part of the combine. The bankers decreed that GM be put into the hands of five trustees – bankers all, led by the deeply conservative ‘Boston Brahmin’ James Jackson Storrow – with Durant retained only as vice president.
Durant was predictably dismayed to lose control of his own creation. Thirty years later, in notes he wrote for an autobiography which, typically, he never finished, he remembered: ‘I saw some of my cherished ideas laid aside, never to be revived. Opportunities that should have been taken care of with quickness and decision were not considered. The things that counted so much in the past, which gave General Motors its unique and powerful position, were subordinated to “liquidate and pay”.’
GM had been saved – in a year in which eighteen car manufacturers collapsed. But its founder had been marginalized. One of the principal authors of Durant’s downfall, G
M’s new president, James Storrow, later astutely (if condescendingly) recalled Durant as an irresponsible enthusiast: ‘In many respects he is a child in emotions, in temperament and in mental balance, yet possessed of wonderful energy and ability … He is sensitive and proud, and successful leadership, I think, really counts with him more than financial success.’ Storrow himself did not last long. Having established a GM listing on the New York Stock Exchange, after only two months at the helm he reluctantly ceded the GM presidency to Charles Nash, who was supported by a raft of Detroit businessmen who thought they knew more about car making than the Boston banker.
In the meantime, Durant had found himself a new playpen. He bought the old Flint factory where Buick had started, hired a former Buick manager, and launched the Mason Car Company in August 1911. In the same year he met Louis Chevrolet, a man whose press releases described him as ‘one of the speed wonders of the day’. It was subsequently announced that the two would ‘establish a factory in Detroit for the manufacture of a new high-priced car’.
Louis Chevrolet looked just like a caricature Frenchman. He was a huge, bear-like man, built like a rugby prop-forward, sporting a bristling moustache and seeming to have a cigarette permanently attached to his lower lip. Chevrolet was actually Swiss by birth, though the son of a watchmaker of French origin; his family had moved to the French town of Beaune, in the heart of the Burgundy wine country, when he was only eight years old. There the young Louis discovered his passion for engineering, assisting a blind wine merchant by building him a revolutionary new wine pump. Chevrolet never lost that childish glee at being able to dismantle and reassemble a machine. In 1900 he emigrated to Montreal to work as a mechanic and as a chauffeur, before moving again, this time to New York. Here the ever-restless Chevrolet began working in the Brooklyn workshop of the French manufacturer De Dion-Bouton, at that time the world’s largest car maker.
Life of Automobile, The Page 3
