Saving Ford from Ford

The following is an article from Uncle John's 24-Karat Gold Bathroom Reader.

You may know the story of how Henry Ford put America on wheels. Here's the story of how he nearly ran the Ford Motor Company into the ditch.

WHEEL MAN

If you're a history buff or just like reading about automobiles, you probably already know how Henry Ford, the founder of the Ford Motor Company, used the moving assembly line and other mass-production techniques to revolutionize the auto industry. He drove the price of his Model T so low that ordinary people, even the workers on his assembly lines, could afford to buy cars for the first time. In the process, Ford, more than any other individual, ushered in the modern automobile age. By 1923, 57 percent of all the cars manufactured in the United States, and half of all the cars on Earth, were Fords.

What's less well-known about Henry Ford is how close he came to  destroying the Ford Motor Company in the later years of his life. The only reason you can still buy a Ford today is that the other members of the Ford family were able to wrest control of the family company away from him before it collapsed entirely.

MR. T

Ironically, it was Henry Ford's obsession with the Model T, his greatest success, that initially set the Ford Motor Company on the road to ruin. Ford introduced the Model T in 1908 and for nearly 20 years fought every attempt to improve it or to replace it with something better. For many years, Model Ts had no gas gauge. If you wanted to know how much fuel was in your car, you had to dip a stick into the gas tank. They had no electric starter, either. You started a Model T by turning a hand crank in front of the car. And they had no gas pedals. You controlled the speed with a throttle that was located on the steering column.

Even when Henry Ford did give in and make improvements, he did so several years after his competitors. Result: by the mid 1920s, the Model T was hopelessly outdated. For years Ford had terrorized every other auto company as he dropped the price of the Model T ever lower, from $825 in 1908 all the way down to $290 in 1924. But his refusal to update the car gave General Motors and other competitors the opening they needed. More than one auto maker battled its way back from the brink just by adding improvements to their cars that Henry Ford refused to add to his.

Ford finally announced in mid-1927 that it was ending production of the Model T in favor of the much-improved Model A, but the change came too late. That year Ford sold fewer cars than Chevrolet, GM's largest division. Strong sales of the Model A did put Ford back in first place in 1929 …but only for a year, and by 1933 it was in third place, behind both Chevrolet and Chrysler.

TROUBLE UNDER THE HOOD

By the early 1930s, the company itself was as decrepit as the Model T. It had taken Ford six months to retool its factories to manufacture the Model A, and the disruption cost the company $250 million -the equivalent of about $3 billion today. GM, by comparison, could retool its manufacturing plants in six weeks.

Ford's network of independent dealers was also a mess. Years of being forced to sell obsolete Model Ts on a cash-only basis (Henry Ford didn't believe in auto loans) had caused many Ford dealers to go under; other had abandoned Ford to become GM or Chrysler dealers. Many who did remain loyal to Ford were driven out of business by Henry Ford himself when they failed to meet the company's unrealistic sales targets.

The biggest problem of all was the Ford executive suite. The company was wholly owned by the Ford family, and executives who were not family members already knew they'd never hold the top job. Henry Ford made matters much worse by firing any executive who showed even a hint of independence or initiative. The most talented Ford executives soon became ex-Ford executives, working for GM, Chrysler, or other auto companies, and driven by the desire to get even with Ford.

THE HEIR

About the only top executive who didn't leave was the one who couldn't: Edsel Ford, Henry's only child. Edsel had been the company's president since 1919, but he was president in name only. Though Henry held no title and liked to say his only responsibility was to "let Edsel find something for me to do," he was firmly in control.

TOUGH LOVE

If anything, Henry Ford's ideas for how to work with Edsel were even more peculiar than his ideas about how to run an auto company. Edsel was a dutiful son, but Henry saw this as a weakness. He blamed himself for being soft on Edsel when he was growing up, and he believed the best way to toughen up the boy was to deliberately sabotage him as he tried to run the company. Henry routinely belittled Edsel in front of other executives, once shouting, "Edsel, you shut up!" after Edsel dared suggest in a board meeting that Fords should have modern hydraulic brakes. When Edsel decided to build coke ovens to process coal for steel production at a Ford plant, Henry feigned agreement even as he whispered to an aide, "As soon as Edsel gets those ovens built, I'm going to tear them down." The ovens were built. Henry tore them down.

When Edsel commissioned a new office building to house the company's accountants and sales staff, Henry cancelled the building, fired the accountants (he hated accountants), abolished the accounting department, and had its offices stripped bare. Then he told Edsel to put the salespeople where the accountants had been. Without any accountants to help with bookkeeping, some departments were reduced to weighing stacks of invoices as a means of accounting their costs.

Henry's meddling in his son's affairs didn't stop at the end of the business day. He even paid Edsel's domestic servants to spy on their employer. Once, when they told Henry, an outspoken teetotaler, that Edsel had liquor in his home, Henry went there while Edsel was away on business and smashed every bottle.

OUT OF GAS

"There was a twisted collusion in the sad game that father and son were to play throughout the 1920s and 1930s, and its cruelest twist was that time did not heal the process, it made it worse," Robert Lacey write in Ford: The Men and the Machine. "The more Edsel submitted, the more his father hurt him, and the more the boy was wounded, the more submissive he became."Edsel had joined the company straight out of school in 1913, when he was 20, and silently endured his father's cruelty for 30 years. In the 1930s, he began to develop ulcers, which Henry (of course) attributed to weakness. "Regain health by cooperating with Henry Ford" were Henry Ford's instructions to his son.

Edsel's stomach problems worsened, but he put off medical tests for more than a year. When he finally went to the doctor, he was diagnosed with stomach cancer that had spread to his liver and other organs. After surgery to remove half his stomach, Edsel (who was never told he had cancer) returned to work. Henry continued to belittle and undermine him until the very end. By the end of April 1943, Edsel could not go on. He took to his bed and died four weeks later at the age of 49.

HIS OWN WORLD

Henry Ford named himself as president of the Ford Motor Company after Edsel's death. Only months away from turning 80, he too was a sick man. He'd had strokes in 1938 and 1941 and was suffering from memory lapses, slowed speech and movement, and other signs of encroaching senility.

Many old men like to live in the past; Ford reconstructed his in bricks and mortar. When he was in his early sixties he'd had a 19th-century village and museum called Greenfield Village built in the countryside northwest of Dearborn, Michigan. Now as his faculties began to fail him, Ford spent more and more time wandering about his ersatz village instead of attending to business.

Greenfield Village (Image credit: Flickr user Thomas M Parsons)

Ford became convinced that his teenaged niece, Dorothy Richardson, was his own mother reincarnated. Mary Ford had died in 1876 when Henry was only 13, and hadn't lived to see the automobile age. Henry made up for lost time by dressing Dorothy in period clothes similar to those he remembered his mother wearing, and teaching her how to drive a Ford -his way of showing his mother what he'd made of himself.

ALL THIS AND WORLD WAR II

That the Ford Motor company was a dysfunctional, failing enterprise led by a dysfunctional, failing autocrat would have been bad enough in the best of times. But this was 1943, and the U.S. had been at war since the bombing of Pearl harbor in 1941. Civilian automobile production was suspended in 1942, and now the Ford plants were busy manufacturing jeeps, planes, and other materiel for the war effort. The switch from cars to war production had taken place while Edsel was still alive, and it had been chaotic. By 1943 production at Ford's B-24 bomber plant was six months behind schedule, and the federal government had no faith in Henry Ford's ability to turn things around. The government even considered seizing control of the Ford Motor Company and running it itself.

The idea was rejected in favor of discharging Edsel Ford's oldest son, 25-year-old Henry Ford II, from the Navy so that he could help his grandfather run the company. Henry II left the Navy as requested, but old Henry didn't have any more faith in his grandson than he'd had in Edsel. Locked out of Edsel's old offices, Henry II spent the war years wandering from one Ford department to the next and quizzing employees on how they did their jobs.

THE TROUBLE WITH HARRY

The expectation among Ford family members was that when Henry died, Henry II would become president. That expectation was shattered in 1944 when it was discovered that old Henry had added a codicil -an extra provision- to his will, saying that for 10 years after his death, the Ford Motor Company would have no president. It would instead be run by the board of directors, with one of the directors, a man named Harry Bennett, serving as secretary.

The codicil was Bennett's idea. "My Harry," as Henry liked to call him, was the old man's best friend and the only person in the company he trusted. Bennett was the head of the Ford Service Department, the 3000-man internal police force that Henry created to battle union agitators and maintain order in his factories. Bennett knew nothing about running an auto company; it was through scheming and brown-nosing that he had risen to become Henry Ford's right-hand man, wielding more influence than Edsel Ford. Indeed, Bennett was often the one who instigated, and then executed, Henry's orders to sabotage Edsel's work.

Now that Edsel was dead and old Henry was failing, Bennett's skill at manipulating the boss had made him the most powerful man in the company. He was also the most hated man, and no one hated him more than the rest of the Ford family. "Who is this man Bennett, who has so much control over my husband, and is ruining my son's health?" Henry's wife Clara had asked back in 1941.

Bennett burned the codicil to old Henry's will as soon as it was discovered, but the battle for the Ford Motor Company was on. Edsel's widow Eleanor now controlled Edsel's 41.9 percent share of the company's voting stock, and she threatened to sell her shares if Bennett succeeded in denying Henry II the presidency. "He killed my husband, and he's not going to kill my son," she vowed.

In April 1944, Henry II maneuvered to have himself named executive vice-president of the company, which made him superior to Harry Bennett …on paper. Bennett was still too powerful to confront directly, but Henry II used his new position to fire Bennett's cronies as he built his own alliances with people he trusted.

GRANDMA'S GIFT

In the end it may have been Henry Ford's wife, Clara Ford, who did the most the save the Ford Motor Company from ruin. As Henry slid deeper into senility, Clara ordered that when Harry Bennett called the house, he was to be told that her husband was not home. Cut off from the boss, Bennett was powerless to retaliate against Henry II as he fired one Bennett loyalist after another.

Clara's biggest contribution to the battle came when she spent the summer of 1945 gently persuading her husband to give up control of the company and let Henry II take the reins. Finally, on September 20, 1945, he gave in and told Henry II that the job was his. Wasting no time, Henry II scheduled a meeting of the board of directors the next morning. As soon as he was appointed president, Henry II marched into Bennett's office and fired him.

A NEW FORD

Before assuming the presidency of Ford, the largest organization Henry II had ever managed was was the Yale University rowing team. Yet in the years that followed, he proved himself a worthy successor to to his grandfather as he remade Ford into a modern, successful auto company. When Henry II retired in 1982 at age 65, the Ford Motor Company faced difficult new challenges as it struggled with quality-control problems and declining sales in the face of surging Japanese imports. That the company even survived long enough to face these threats, after many observers had declared it dead in the 1940s, may be Henry Ford II's greatest accomplishment of all.

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The article above was reprinted with permission from Uncle John's 24-Karat Gold Bathroom Reader.

Since 1988, the Bathroom Reader Institute had published a series of popular books containing irresistible bits of trivia and obscure yet fascinating facts. If you like Neatorama, you'll love the Bathroom Reader Institute's books - go ahead and check 'em out!