Automobile pioneer Henry Ford played a key role in both the Roaring Twenties and the Great Depression. Initially, the Ford Motor Company paid workers very well. Potential laborers from all over the country flocked to Detroit to secure a $5 per day wage. In fact, Ford paid its workers so well that many of them could afford the cars they produced, either outright or, more often, on credit. The scale of Ford's industry was incomparable; it was Detroit's largest employer. Working conditions were initially pleasant relative to the time. Waiting lists and lines for employment stretched to months or even a year. Ford himself was cutting wages and increasing production speed on the assembly lines. What used to be one of the best paying factory jobs now paid less than competitors GM and Chrysler. To further compound matters, the cheap and versatile Model T was finally running out of steam. In 1927, Ford laid off masses of workers as customers stopped buying the Model T. Ford eventually came back with the Model A, also initially a major success. However, working conditions and pay continued to worsen. Talking and whistling on the job was not only prohibited, but enforced. Employees could no longer afford the cars they built as this point. As demand for cars dropped and dropped, Ford kept its workers employed, which resulted in major overproduction. As losses mounted, workers were finally thinned and the existing workers were forced to work even harder. Finally, as unemployment soared to 30% then 50% and Henry Ford was blaming the workers for their joblessness, a group of approximately 3,000 unemployed people marched on Ford's Rouge plant. An unfortunate turn of events ensued, when police unleashed tear gas against the protesters, who began throwing stones. At the end of the skirmish, police had fired at she crowd and injured dozens, killing four.
Another tidbit of information: Henry Ford's anti-Semitic beliefs were printed in his paper, The Dearborn Independent. Hitler's sentiments were influenced by this; copies of the newspaper were found in his office during the thirties.
An ironic point about Ford was that he was against the urban lifestyle, yet was largely responsible for facilitating it.
Source: http://www.youtube.com/watch?v=IQ_lizW5zSI
Nice post Brandon! Its really interesting to see how the auto market grew and grew, until it finally collapsed in the great depression. The unemployment amount is just staggering. you can see why people thought capitalism had failed.
ReplyDeleteNice post! This is a really good example of the typical pattern of the economic panics that we have seen so far. In each of them, the demand for a certain product or industry peaks, but production does not, so the supply of goods far outstrips the amount of consumers. We saw this in the Panic of 1819 and overspecualtion, and the Panic of 1857 with the decrease of foreign demand, and even more recently in the real estate market.
ReplyDeleteInteresting post. However, although you did give many facts about Ford's management of his employees and some of his own beliefs, you never truly stated how they are interconnected, or if they even are. You may have given a small explanation about his feelings during the actual depression, but you did not explicitly state why conditions in the factories continually worsened.
ReplyDelete@Alvina Ford Initially had a near monopoly of the auto market but as time went on and other automakers (GM, Chrysler) released new models which surpassed the performance of the Model T, Ford was forced to reduce prices to remain competitive. This meant that manufacturing efficiency had to be improved in order for the company to remain profitable.
ReplyDeleteThis was an interesting post! It reminded me of this one quote by Roosevelt that "symptoms of prosperity may become portents of disaster!". This economic panic is certainly a trend that has repeated several times such as the panic due to land speculation. Whenever someone benefits someone seems to become miserable and I think trends are a big part of that. It's also closely interrelated with inflation.
ReplyDeleteThis is such an interesting post; I just wanted to clarify though, the decline of Ford's success correlated with the severity of the recession? That's an interesting contrast between Ford's business and his actual beliefs about society. I wonder how he'd compare against other business giants like Morgan and Carnegie
ReplyDeleteWow, it is incredible how much of an effect Ford and other car companies affected the market. Capitalism did look extremely bad when so many people went unemployed because of the sudden drop in demand, and I think that continuing to produce was about the worst thing that Ford could've decided to do because the long term affects were clearly negative. Unfortunately the protests ending the way that they did further emphasized the lack of foresight during this time and indefinitely led to the excessiveness of the depression.
ReplyDeleteYou can connect the big 3 American car manufacturers struggling during the Great Depression to the bailout of General Motors during the Great Recession. A couple days ago, the bailout of GM finally ended, costing taxpayers 10.5 billion dollars. The government sold its last stock of the company.
ReplyDeletehttp://www.bloomberg.com/news/2013-12-09/gm-bailout-ends-as-u-s-sells-last-of-government-motors-.html