Henry Ford and the American system

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Henry Ford and the American System

Part I……………………………………………………………….4

Part II……………………………………………………………… 9

Part III……………………………………………………………..13

Exercises………………………………………………………….19

Winston Churchill and the American Diaspora

Part I……………………………………………………………….28

Part II………………………………………………………………33

Part III……………………………………………………………..39

Exercises………………………………………………………….46

Walt Disney and American Entertainment

Part I………………………………………………………………..53

Part II……………………………………………………………….59

Part III………………………………………………………………65

Exercises…………………………………………………………..71

Alan Greenspan and the American Banker

Part I………………………………………………………………..78

Part II……………………………………………………………….83

Part III………………………………………………………………88

Exercises…………………………………………………………..93

Lucky Luciano and the American Criminal

Part I………………………………………………………………..99

Part II………………………………………………………………104

Part III……………………………………………………………...108

Exercises…………………………………………………………..114

Использованная литература…………………………………. 120

Henry Ford and the American System

PART 1

Henry Ford was a maverick inventor and entrepreneur rather than a capitalist, with all the virtues and of the old and isola­tionist Midwest. He hated Wall Street even more than he loathed labor unions. He distrusted stocks and shares and therefore resolved to keep his company private. He refused to join associations of industrialists, suspect­ing that they conspired against innovation, just as the other car manufactur­ers of Detroit tried to use patent law to block his infant company. He was hailed as a hero in the infant Soviet Union, the first major American industri­alist to invest there. And although his cars were perhaps the principal instru­ment in the destruction of the traditional way of life, the project dearest to his elderly heart was the building of Greenfield Village.

Today, it might be called "a heritage center," a loving reconstruction of a preindustrial village, from which cars were banned and visitors toured in horse-drawn carts. When he built it in the 1930s, from a sixteenth-century Cotswold cottage dismantled in England and carefully rebuilt outside Dearborn, Michigan, complete with a flock of Cotswold sheep and the reconstructed building where Abraham Lincoln had practiced law, it was seen as a rich man's whim. The only car allowed was kept in a barn on theoutskirts ofthe village, the first car Ford ever built. On occasion, dripping fuel into its cylinder feed from an eyedropper, he would start the engine and watch it run. The place was also a shrine to his hero, friend, and early employer, Thomas Edison, whose Menlo Park workshop in New Jersey was lovingly rebuilt in Ford's own magic kingdom.

The man who built the quintessential machine of the modern industrial economy, which would not have been possible without the assembly-line technique he developed, was a revolutionary who found as if by instinct the way to refute Karl Marx's prediction that a mass working class would revolt against its exploitation and its misery. Quite simply, Ford realized that there was little point producing a million cars a year unless there were a million consumers. Mass production required a mass market, which meant that ordinary people, farmers and workers, had to be able to buy them. Ford, to the outrage of hisfellow employers, paid his workers unheard-of sums. John Gunther, theauthor of the classic and best-selling compendiums Inside Europe and Inside U.S.A., suggested that of the two seminal events of 1914, the outbreak of World War I and Ford's announcement of a five-dollar-a-day minimum wage, he suspected Ford's pay rate might in the long run be the more significant.

"Most of the babies of the period were conceived in a Model T Ford, andnot a few were born in them," suggested the novelist John Steinbeck, tongue not entirely in cheek. The Model T was in itself a social revolution, the culmi­nation and the catalyst for a series of dramatic changes that defined the twen­tieth century. The private car required an oil industry with a distribution and retail system that could put a gasoline pump in every small town and village across the country. Roads were needed to connect the gas stations, and dealer­ships to sell the cars and a far-flung army of mechanics to ensure that they kept running. The automobile transformed the face of the American country­side, making the horse redundant and forcing farmers to grow new crops to replace the hay the horses used to eat. It force-fed a financial revolution to provide the decentralized credit system that allowed customers to buy them; they did so in such numbers that the Model T itself refuted that gloomy 1906 political vision of Woodrow Wilson: "Nothing has spread socialist feeling in this country more than the automobile—they are a picture of the arrogance of wealth with all its independence and carelessness."

Ford was born one of eight children on a Michigan farm in 1863. Abra­ham Lincoln was president, the Civil War still raged, and fewer than one

American in five lived in a city. By the time of Ford's death, eighty-three years later, two out of three Americans lived in urban households, and most of them had a car. He went to a one-room schoolhouse for eight years and spent his summers bringing in the harvest, a classic tale of the American farm boy who makes good. Or so he chose to remember, claiming that his great career began by leaving home to walk to Detroit to look for work at the age of sixteen, just three years after his mother died in childbirth. Her death was a stunning shock, but soon afterward, already fretting at his father's assump­tion that he stay on the farm, he became inspired. Driving with his father in a horse-and-buggy rig one day, he saw a steam engine proceeding toward him. "I remember that day as if it were yesterday," he told a court decades later, and he even recalled the 200 rpm that its driver told him was the engine speed. Fascinated, he left home for Detroit and found work as an apprentice in the Dry Dock Engine Works.

That was the legend. In fact, it seems that he got his first job with family friends in the Flower Brothers Machine Shop. After some months, he moved to Dry Dock, pioneers of metal shipbuilding and the Bessemer steel process. He then became a jobbing repairman of farm engines for Westinghouse, gave up the city, and moved back to the farm, where he married and then ran a tim­ber business in the hard years of falling farm prices and agricultural depres­sion. He remained a tinkerer, fascinated by machines and watches, building a homemade "farm locomotive" powered by steam. On occasion, he traveled to Detroit on business and once to examine one of the new gasoline engines. But when the timber had all been cut, what took him back to the city was not the engines but the even more thrilling new power of electricity. He got a job run­ning the workshop at the Edison Illuminating Company, and in his spare time, he tinkered with scraps to make a gasoline engine of his own.

On June 4, 1896, he took his quadricycle for its first ran, and it broke down, eliciting hoots of derision from the drunks outside the Cadillac Hotel. It was an extraordinary vehicle, essentially two bicycles side by side, with a seat, steering bar, and an engine. Much lighter than most other experimental cars, it could go much faster, up to twenty miles per hour. He attracted promi­nent local backers, and in 1899, with the mayor of Detroit among the investors, the Detroit Automobile Company was launched with capital of $150,000, and Ford as mechanical superintendent. It folded the following year. Ford claimed it was because he was a perfectionist, always looking to make a better car, rather than go into production with his successful proto­type. And his tinkering was inspired, producing the first spark plug and devel­oping a way to cast an engine block in two easily assembled halves.

His backers remained faithful when Ford's workshop produced another car in 1901, which stunned the small world of automobile enthusiasts by beating the then speed champion Alexander Winton in his 40-horsepower Winton Special in a ten-mile race. They put up sixty thousand dollars to found the Henry Ford Company, but the mechanic after whom it was named lasted only four months before he was let go with a nine-hundred-dollar settlement. Again, Ford wanted to keep on designing rather than manufacturing. The firm continued under a name that became famous as the Cadillac Automobile Company, manufacturing a car designed by Ford.

Another backer emerged, a local coal merchant named Alex Malcolm-son, who installed a bookkeeper and production supervisor, James Couzens, who was able to keep Ford focused on his latest design, the Model A. Much of the manufacture was subcontracted to a machine shop run by the two Dodge brothers, John and Horace, who also became shareholders in the Ford Motor Company. Their first buyer on July 15, 1903, was a Dr. E. Phennig. He paid $850, when the infant company had only $223.65 in the bank. Within three months, the company was turning out twenty-five cars a day, and by the end of 1905, it was offering a range of cars, up to the two-thousand-dollar Model B. This was how most other small car manufacturers operated, and the way Malcolmson wanted to continue. But Ford was convinced that the future lay with cheap cars costing less than five hundred dollars, which could be sold in much greater numbers.

"I will build a motor car for the great multitude," Ford vowed. "It will be large enough for the family, but small enough for the individual to run and take care of. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one."

He and Couzens launched the Ford Manufacturing Company, forced Malcolmson to sell out, and developed the Model N, which in 1907 sold for six hundred dollars and became an immediate success. Within eight months, they had sold 8,243 cars and had made a profit of $1 million, which was plowed back into the next project. The focus remained on lightness and speed, as it had with the original quadricycle. The breakthrough came when Ford read of a new lightweight French alloy, vanadium steel, which was far stronger than ordinary steel. That was used to make the crankshaft. Then Ford developed the magneto as an alternative to the dry battery for delivering sparks to the cylinders; he devised a way to insulate it with heavy varnish, stewed in maple-syrup kettles. Then Ford developed his new "planetary" sys­tem for lightweight gears, installed the huge and flexible springs to handle the bumps of dirt roads, and the Model T was born. When it went on sale in 1908, it was an immediate success, advance publicity generating a thousand

inquiries a day. It cost $825, almost a year's pay for a schoolteacher, and ten thousand of them were sold within the first year.

"No car under $2,000 offers more," said the publicity campaign, and for a reliable and weatherproof family-size car, this was true. But it was also a sturdy and simple car, with interchangeable parts that could be fixed or replaced by a country blacksmith, for which the still-half-rural American market with its woeful roads had been waiting. On the Western Front of World War I, a Model T took Gertrude Stein about her duties as a volunteer nurse. Within ten years, half of all the cars running in the world were Model Ts. Ten years after that, when the production of the Model T finally stopped in 1928, over 15,500,000 had been sold in the United States, another 1 million in Canada, and 500,000 in Britain.

PART 2

And all the time, the price of the Model T was ground relentlessly down­ward as Ford took to tinkering with the production process. By 1914, the car was selling for $440, and by 1924, the price was down below $300. In the first year of production, it took over twelve hours to assemble each car from the various components. By 1914, it could be done in ninety-three minutes. By 1925, a car was rolling off the assembly line every twenty-four seconds. It was not just that the Model T was a simple design of genius but also that Ford himself had become so much more than a classic American inventor with an entrepreneurial gift. He had become something far more crucial to America's eventual dominance of the manufacturing process. He had become, like a handful of gifted Americans around him in other new fields, such as electric power and oil refining, something altogether new and distinctive, developing a skill that took the old British industrial revolution to an entirely new dimen­sion. Ford had become a systems engineer.

This, rather than the cars or the innovative designs or the vision that a mass market was out there waiting for them, was the essence of Ford's genius and of his significance. He saw the entire process—of design, manufacture, mass market—as a single system to be planned and managed. Ford's revolu­tionary Highland Park, Michigan, factory, known as the "Crystal Palace" because of its plentiful windows, may not have been the first example of sys­tems design. The eighteenth-century British Royal Navy, with its mass-produced ships and cannon, its factories for ropes and sails and barrels, its professional officers and craftsmen, and its network of communications through coded flags, was the pioneer. But Ford slowly but surely incorporated his entire manufacturing system into the single new plant at Highland Park.

The grand design was not born overnight. There were separate assembly lines for the engines, the magnetos, and the transmissions, all converging into the final assembly shop. They were coming in such numbers that these subassemblies began to pile up too fast for the final assemblers to cope. So within the year, there was another assembly line for the chassis.

"Every piece of work in the shops moves. It may move on hooks, on over­head chains, it may travel on a moving platform or it may go by gravity, but the point is there is no lifting or trucking," Ford explained. "Save ten steps a day for each of 12,000 employees and you will have saved fifty miles of wasted motion and misspent energy."

Conveyor belts carried the identical and interchangeable parts to each of the assembly lines at precisely the point when the moving lines would be ready to receive them. Railway lines snaked into the plant, bringing coal and raw materials and the subcontracted items like the tires and upholstery. To avoid having to cast metal parts, he bought the Klein Company of Buffalo for its technology in stamping. When a strike stopped production, he shipped the giant stamping machines to Highland Park, got them working within three days, and incorporated them into what became a triple system: the inputs, the manufacture and output, and distribution through the chain of dealerships.

It was all designed to be run by unskilled labor, since, as was usual at the time, labor turnover was extraordinarily high. In 1913, it was running at 360 percent, which meant hiring over nine hundred men in order to keep one hun­dred. At Christmas 1913, when the company decided to award a special bonus to workers with three years of service, it was found that of 15,000 employees, only 640 qualified. That was the spur to the five-dollar-a-day breakthrough, a wage that meant a Ford assembly-line worker could buy one of his own prod­ucts with thirty-two weeks' pay. The five dollars was not basic pay, and almost half of it came from a profit-sharing system. Along with the cash, the simul­taneous Ford innovation that stunned business America was the reduction to an eight-hour day.

"Economic blunders if not crimes," thundered the Wall Street Journal. But there was method to Ford's apparent madness. Previously, his factory had run two nine-hour shifts a day. With an eight-hour day, it could run three shifts, thus increasing production yet further into a market still unappeasably hungry for more Model Ts.

Even as Highland Park was revolutionizing the nature of industrial pro­duction, Ford was planning the next great leap, the design of an even bigger and better and more comprehensively planned plant at River Rouge, Michi­gan. This infuriated his major stockholders, the Dodge brothers, who thought the expansion reckless and complained that the endless price-cutting was reducing their dividends. Although by now manufacturing cars of their own while still holding Ford stock, they took Ford to court in 1916, and on appeal in 1919, he lost the case. But then he bought out the Dodge brothers and five other major stockholders for the extraordinary sum of $106 million, plus over

$20 million in dividends. He reorganized the Ford Motor Company under a new charter, and he and his family held all the shares. Now there were no brakes on his ambition, and River Rouge went ahead.

Ford had been infuriated by the Highland Park plant's dependency on other suppliers, particularly when World War I meant shortages and delayed deliveries. He had been forced to accumulate large inventories, which added to his costs, so the River Rouge plant was designed to be virtually self-sufficient. Ford became an integrated company, buying sixteen coal mines, 700,000 acres of forest and sawmills, glass plants in Pennsylvania, and iron mines in Min­nesota, as well as building the Ford ships and railroads, which carried all the necessary materials to River Rouge.

This was the Ford system, the product of his perception of the way sup­ply and production, workforce and markets could all be measured, planned, and combined into a giant whole that led to the concept, as much social and political as industrial, that Germany and Soviet Russia came to call "Fordismus." It had many roots. One of the strongest came from the job that had attracted Ford to Detroit, the new market for electricity spurred by Edison's lighting system. Ford's boss had been Alex Dow, who went on to establish a national reputation as a utility manager in this strange new industry, whose product could not be stored. The supply of electricity always had to match demand, even though that demand varied with the time of day and the sea­sons of the year. It was not simply a matter of mass-producing energy; it also involved tailoring it to a variable market. The American way of doing so required the deliberate expansion of demand, which was accomplished by hiring hordes of door-to-door salesmen to sell the mushrooming household electrical appliances that required electricity.

There were several different ways of organizing the supply of electricity. In Britain until the 1920s, small and decentralized electricity companies gen­erated large profits from a small number of customers. In Germany, large electricity companies focused on their big industrial clients and left the house­hold market until later. In the United States, visionaries akin to Ford, such as Samuel Insull, a British immigrant who became Edison's personal secretary, built a system that generated vast profits, accumulating in tiny amounts from a massive number of customers. Hence the need to sell vacuum cleaners and washing machines, fans and refrigerators and electric irons. Until discredited at the time of the Wall Street crash of 1929, Insull rivaled Ford as one of the giants of modern industry. By the 1920s, with Commonwealth Edison, Peo­ples' Gas, Northern Illinois Public Service, and Midland of Indiana, Insull controlled a utilities conglomerate worth $3 billion. It had 600,000 stockhold­ers and 4 million customers and produced 12 percent of the electricity and gas consumed in the United States. And he still found time to design Britain's

National Grid in the 1920s, when Insull's homeland realized that America was organizing its electricity system in a fundamentally different but far more rational way.

The international vogue for the ideas and manufacturing systems inher­ent in Fordismus was reinforced by Frederick Winslow Taylor, whose book Principles of Scientific Management was published in 1911. Within two years, it had been translated into Russian, German, French, Italian, Japanese, Swedish, Spanish, and Dutch. "In the past, man has been first; in the future, the system must be first" was the essence of Taylor's teaching.

Taylor came from a wealthy family of Philadelphia Quakers, went to Phillips Exeter Academy, joined the Philadelphia Cricket Club, and became a national tennis champion, but forwent a college education to become a shop-floor worker and then a foreman at the Midvale Steel Company. With the sup­port of its president, William Sellers, an innovative engineer and designer of machine tools, Taylor resolved to demonstrate that he had learned on the shop floor how to make work more efficient. In 1882, he began measuring specific items of work with a stopwatch, thereby launching into a three-year battle with his suspicious fellow workers.

"My sympathies were with the workmen, and my duties lay to the people by whom I was employed," he told a congressional committee thirty years later. Taylorism was not simply a matter of measuring work and standardiz­ing its component parts and then planning and timing a manufacturing process that took the division of labor to its logical conclusion. It included redesigning the work space, the work flow, and the machines and improving the lighting, ventilation, and working conditions, including the provision of toilets. It meant paying higher wages for higher output, with careful supervi­sion and training. But like Ford's standardized car parts, Taylorism also meant the end of craftsmanship. Work was no longer a complete skill that took metal from raw ingot to finished tool, but instead a set of component actions that, with the right tools and training, could be executed by semi­skilled workers who had no need of a long apprenticeship.

"So there you are, wage-workers in general, mere machines—considered industrially of course," said the labor leader Samuel Gompers. "Not only your length, breadth and thickness as a machine, but your grade of hardness, malleability, tractability and general serviceability can be ascertained, regis­tered and then employed as desirable. Science would thus get the most out of you before you are sent to the junkpile."

PART 3

The twentieth century was to be shaped to an extraordinary degree by Taylor, Insull, and Ford, because the markets, the machine tools, a new kind of education, and a new kind of skill were all falling into place around them.

One key component was added the year before Ford's birth, when in 1862 Congress passed the Morrill Act to provide funds to states that would estab­lish colleges for agriculture and for the mechanical arts. In 1870, there were 100 engineering graduates, but by 1914 4,300 were graduating annually from 126 engineering colleges. The number of American graduate engineers rose from 45,000 in 1900 to 230,000 by 1930, and increasingly included chemical and electrical engineers, each with their own professional association. By 1924, the great corporations of Du Pont, General Motors, General Electric, and Goodyear were run by four engineers who had been classmates at the Massachusetts Institute of Technology. Taylor was elected president of the American Society of Mechanical Engineers in 1906, although perhaps more for his work on metallurgy than on the theory of organization. From this pul­pit, he spread the word of social transformation through systematic organiza­tion based on sound and proven engineering principles.

"The same principles [of scientific management] can be applied with equal force to all social activities, to the management of our homes, the man­agement of our farms, the management of the business of our tradesmen large and small, of our churches, our philanthropic institutions, our universi­ties and our government departments," Taylor preached.

A thrill of discovery, an almost messianic sense that at last humanity had found the key to organizing its progress into a new age, runs through the writ­ings of Ford and Taylor. It runs as well through the work of those touched by them in the arts and letters. Artists, from the Italian Futurists to the Soviet Expressionists, celebrated the wonders of industrial design as the Renaissance had celebrated the human form.

"In all the constructions of man's past, there is nothing to equal these," said the Mexican artist Diego Rivera when he first laid eyes on the vast car plants of Detroit. Rivera had been commissioned by Ford's son, Edsel, to cover the interior courtyard of the Detroit Institute of Art with murals of the industry. Rivera saw America itself as the inspiration, as opposed to the faded grandeur of Europe. "Here it is—the might, the power, the sadness, the glory, the youthfulness of our lands."

Poets hailed the electricity pylons in England and the Maginitogorsk electric plant in Russia and the Grand Coulee Dam in the United States. Architects thrilled to the potential of design systems and rational new forms now made possible by the blending of steel and concrete, with so many new commissions coming for the giant new factories and the engineers and busi­nessmen who made fortunes from them. Financiers hurried to harness the rivers of cash that ran through the electricity supply companies and the end­lessly churning factories. And politicians rode this same tide, convinced, like

Teddy Roosevelt and Woodrow Wilson, that rational and planned reform could deliver prosperity and decent social conditions to an ever-swelling American population.

Everything seemed new and was made possible by these innovators of the American manufacturing system and the almost godlike systems engineers. Ford wanted to title one of his own books The Great Today and the Even Greater Tomorrow (until he was persuaded that Today and Tomorrow carried more punch). But the system was morally and politically neutral. It could pro­duce terror as well as plenty, the autocracy of production as well as the democ­racy of the market. And the system proved particularly well suited to world war and to the Soviet state. Even as Ford got the Model T production time down to less than two hours, his assembly lines and Taylor's principles of work organization and quality control were being applied in the vast new munitions plants of Britain, France, and Germany to churn out the shells required for the Western Front. The ingenuity that designed, as well as the systems that manufactured, tractors to cross plowed and muddy fields were swiftly applied to create the tank, and the new chemical engineers devised poison gas.

"The Soviet Republic must at all costs adopt all that is valuable in the achievements of science and technology," wrote another fan of the American manufacturing system, Vladimir Ilyich Lenin, just four months after the Bol­sheviks had seized power. "The possibility of building socialism will be deter­mined precisely by our success in combining the Soviet government and the Soviet organization of administration with modern achievements of capital­ism. We must organize in Russia the study and teaching of the Taylor system, and systematically try to adapt it to our purposes."

There was a sense in which Fordism was compatible with the Soviet sys­tem. The man who had outraged Detroit's fellow employers by paying five dollars a day was unhappy with the way his workers lived. Always a spiritual man, he believed in reincarnation, and he was never afraid of a quixotic ven­ture for a good cause, like his much-ridiculed 1915 Peace Ship to stop the slaughter of the war. This hopeful attempt to sail to the neutral countries of Europe and inspire public opinion to end the war and persuade the munitions makers to produce Ford tractors instead failed when President Woodrow Wil­son declined to join the trip. After a press conference in a Norwegian hotel, Ford sailed home. Inspired by the humanitarian homilies of Ralph Waldo Emerson, Ford told his local pastor, the Reverend Samuel Marquis:

There are thousands of men out there in the shop who are not living as they should. Their homes are crowded and unsanitary. Wives are going out to work because their husbands are unable to earn enough to support a family. They fill up their homes with roomers and boarders in order to help swell the income. It's all wrong—all wrong. It's especially bad for the children.... Give them a decent income and they will live decently, be glad to do so. What they need is the opportunity to do better, and someone to take a personal interest in them.

Thus was born the Ford Sociological Department, a strikingly paternalis­tic and intrusive system of fifty inspectors who were each given a Model T to make house calls on Ford employees. They checked on the cleanliness of the home, the health of the family, the absence of boarders, and the family diet. Failure to keep the home properly could jeopardize that half of take-home pay that came from the profit-sharing bonus. The inspectors had to be pro­vided with interpreters to translate the dozens of languages and dialects spo­ken by the largely immigrant workforce, so Ford established English schools at the plant. It was almost a colonial kind of capitalism, but it helped trans­form Detroit, with its reputation as a lawless boomtown of bars and brothels, into a solidly respectable and prosperous city of legendarily well-paid and secure workers.

Despite the sinister overtones of the inspectors as the boss's spies, there was a social conscience about Ford's employment policies. One in four of Ford's workers was handicapped, including the blind and deaf and dumb, each on full pay and assigned to a job tailored for his or her abilities, based on a work-organization survey. By arrangement with local judges, he usually had some five hundred ex-convicts in the plant, and Ford claimed that simply by hiring and trusting them, they worked better than the average hand. This was the systems theory applied to social engineering, the power of the thoughtful employer to so improve the lot of his workers that they became less a prole­tariat vulnerable to Marxist agitation and more a stable, prosperous, and steadily employed class of family men, encouraged to buy their own homes.

"The combination of the Russian revolutionary sweep with American efficiency is the essence of Leninism," wrote Joseph Stalin, whose own ideas of social engineering were somewhat different. If American capitalism could transform new immigrants into highly paid industrial workers and build giant factories on the fields of Michigan, then the Soviet Union could organize its own instant industrialization. Lenin even found that Taylorism could be com­patible with socialism; Taylor was interested not only in increasing profits but in increasing production through making the worker more comfortable and thus more efficient. Ford may have been one of the richest men on earth, but he had become so by giving mobility to the masses.

Within three years of its writing, Ford's My Life and Work had been translated and had gone through four printings in Russia. "Ford means America and all that America had accomplished to make her a model and an ideal for this vast and backward country," reported Walter Duranty from Moscow for the New York Times. By 1927, claimed Ford's publicity machine, 85 percent of the cars and tractors in Russia had been built by Ford. "The most popular word among our forward-looking peasantry is Fordson," enthused Trotsky. In 1929, Ford signed contracts with the Supreme Economic Council to build two Ford plants, one in Moscow and a second, larger factory in Nizhni Novgorod, to manufacture Model A cars and Ford AA trucks.

By this time, Ford needed the Russian contracts. Even before the Wall Street crash and the Depression, his dominance had disappeared. His insis­tence on retaining the Model T for so long, and then on offering only the color black, gave competitors like General Motors the chance to use his meth­ods, catch up, and then overtake him. Ford aged; doubtful that his son, Edsel, would run the business as the old patriarch wished, he allowed his veteran security man Harry Bennett to take increasing charge of the day-to-day administration. The result was that by 1940, Ford had fallen to third in U.S. sales, behind General Motors and Chrysler, with but 19 percent of the market.

Bennett was a former sailor, a bizarre figure with close connections to the criminal world, who cooperated closely with J. Edgar Hoover's FBI to pro­vide lists of "subversive" labor activists in Detroit and hired gangsters to keep the labor unions out of the Ford plants. He installed a target in his office so he could practice with his revolver, and he took great personal care of Henry Ford. When the old man went to a state fair and mourned the replacement of the old farm implements with machinery, Bennett had changes made. He drove his employer back the next day, where Ford found a bucolic scene of gamboling lambs, haystacks, plow horses, and contented farmhands in antique clothing surveying a fine fresh crop of waving corn. "That's nice, Harry," said the old man. But by now, the great corporation was faltering, and the five-dollar-a-day wage was cut to four dollars in the hard times of the Great Depression. And the Ford plants that had been models of enlightened employment now saw the shotgun blasts and beatings of Bennett's war on the labor unions.

It would take the giant military contracts of World War II, when Ford's Willow Run plant began turning out a B-24 bomber every hour, and a total of $5.26 billion in war-supply payments to keep the Ford Motor Company alive. And it was the war veterans, whiz kids like Robert McNamara from the Office of Statistical Control, who joined young Henry Ford II to revive the com­pany's fortunes. They did so with the same scientific management and statisti­cal techniques that had built the Ford empire in the first place.

EXERCISES

HENRY FORD AND THE AMERICAN SYSTEM

PART 1

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