Shakespeare would have loved the Fords. Their story is an epic that sweeps across decades, and now a century, filled with villains and heroes and tragic flaws.
The story begins outside a shed on Bagley Avenue in Detroit. It is early morning. Inside the sounds of tinkering can be heard. It is June 4, 1896.
The noise increases. Banging. The wall of the shed shudders, and gives way. Thirty-two-year-old Henry Ford drives his first "car," the Quadricycle, through the hole, pinching the fuel valve between his thumb and forefinger to regulate the mixture of air and gas in the engine and keep things running.
It wasn't much, just a buggy frame mounted on four bicycle tires and powered by a four horsepower gas engine. But is was the start of the amazing story of the Fords and their company, the Ford Motor Company that celebrated its one hundredth birthday just last week.
The company was incorporated in 1903 when Ford and eleven other investors put together $28,000 in start-up capital. The company's first big success was the legendary Model T.
The Model T was wildly popular. Ford would sell more than 15 million of them in the US alone. But early on that couldn't happen because the production system of the day couldn't keep up with the demand for cars.
In the beginning it took about twelve hours to produce a single Model T. Henry Ford knew there had to be a better way. He found it in Chicago.
That's where Ford visited Swift & Company and watched as a moving line made the production of packaged meats faster and easier. It wasn't exactly an assembly line, though, because part of the process involved cutting up the meat carcass. Ford thought he could reverse the process and build Model Ts a whole lot faster.
That turned out to be an understatement. By 1913, Ford's Highland Park plant used moving assembly lines for sub-assemblies and for the car itself to turn out a Model T about every 90 minutes. Henry Ford's idea was to build a "car for the great multitude" and that meant low prices. By streamlining production and increasing volume, Ford was able to reduce the $600 price of a Model T by almost half within four years.
Ford also decided to do his part to create part of the great multitude he expected to buy his cars. At the time the prevailing daily rate for work in Detroit was around $2.50. In 1914 Henry Ford increased the rate at his company to $5.00. Not only that he cut the then standard nine-hour workday to eight, and instituted breaks during the shift.
In one swift action Ford had done two things. First he had created a stable workforce for the Ford Motor Company which would allow him to steadily increase production. And he had helped create a class of consumers for his product.
In the next few years Ford kept increasing production. He took complete control of the company from other investors. He began acquiring resources so he could control the production of his cars from raw materials to final sale.
At one point the company owned facilities in thirty-three countries that produced wood and iron ore and sap from rubber trees. It owned facilities that sawed and finished the wood, refined the ore, and turned sap into rubber. And it acquired all of that without borrowing a penny. The profits from the Model T were enough.
All that success made Henry Ford think he could do no wrong. But, of course, he could. He constantly attacked his son, Edsel, who was the nominal head of the company. Edsel absorbed the abuse while he tried to get his father to change things so the company could be competitive. But Henry Ford was stubborn.
He stayed with things that had worked in the past while other manufacturers moved ahead. So Ford cars had mechanical brakes while other cars had hydraulic ones, an eccentric transmission while other makers standardized their transmissions and nothing but black while other lines offered a choice of color.
In the 1930s Ford fell behind General Motors in sales and stayed there. This was also the decade of battles with the United Auto Workers Union (UAW) which was organized in 1935.
General Motors and Chrysler came to terms with the Union, but Ford held out. In 1937 his security forces attacked UAW organizers who were handing out leaflets at the River Rouge plant. Pictures of bloody UAW members made the papers all across the country.
During the next four years Ford's internal security teams terrorized anyone they thought might have union leanings. The company fired thousands of workers who had either joined the union or were suspected of joining. Then, in 1941, the UAW called a strike at the River Rouge plant. 50,000 workers walked out.
Henry Ford was going to close the plant, rather than give in to the union. Some accounts say that the only reason he didn't close the plant was that Clara, his wife since 1888, threatened to divorce him unless he settled. Ford did, calling it the greatest disappointment of his life.
In 1943 Edsel Ford died of stomach cancer. Henry, by now eighty years old and failing himself, took over the company again. It was too late for him to do much for good or ill. America was at war and the Ford Motor Company wasn't producing domestic cars anymore. It was producing jeeps and tanks.
In 1945 a weakened Henry Ford handed over the company to Edsel's son, Henry Ford II. The company was a mess.
The company was far behind market leader General Motors. Labor relations stank. And administrative practices were almost non-existent. The company was estimating its accounts payable by weighing invoices on a scale. Henry II set about fixing things and saving the company.
He brought in a team called "The Whiz Kids" that included a young man named Robert McNamara. They were among the first operations researchers and they'd had great success in the military by using tools of systematic decision making and quantitative methods to improve the way things worked. They'd cut inventories, streamlined operations, and generally brought order and cost-effectiveness out of chaos.
Near the end of the war the Whiz Kids decided that they could increase their own market value if they sold themselves as a package. That was just fine with Henry II who hired them and turned them loose on the Ford Motor Company.
The Whiz Kids analyzed procedures, changed them and wrote manuals to make the changes standard. They analyzed inventories and supplier relationships. They helped Henry II turn Ford into a modern company.
Before Henry II retired in 1980 the company had improved sales and created two memorable cars, the Thunderbird (1954) and the Mustang (1964). Of course there was also the most spectacular failure in automotive history, the Edsel (1957) and the explosive little Pinto. The company went public in 1956 in what was the largest public stock offering up to that time.
There was a new kind of tinkering, too. If Henry I had tinkered with machines to make them better, the Ford Motor Company of Henry II tinkered with product design and generally made it worse. The Thunderbird evolved from a snappy little two seat sports car to a lumbering sort-of luxury land yacht. The Mustang added option after option and then became the Mustang II, a horrid little car that was mercifully put out of its misery in 1978.
By then the company had changed, too. It had policies and procedures now, books and books of them. And it had professional management, seventeen layers of it, compared with Toyota's five. Ford had great financial controls, which told management that their labor costs were 65 percent higher than the average for US industry and that the company had lost $2.2 billion in 1980, the largest corporate loss up to that time.
What all those policies, procedures, controls and professionals couldn't seem to do was design a car that anyone really wanted to drive. The company was a mess.
The new chairman, Phil Caldwell and CEO Donald Petersen went to work on all the problems, but they gave priority to product. They figured that if the company could build a car they were proud of and that people wanted to drive, everything else would take care of itself. They created Team Taurus.
For years Ford's designers had been producing "A Car Just Like Last Year" for management while they stuck their ideas for good looks and driver-friendly design in the bottom drawer. That changed the morning Don Petersen looked over a bunch of new designs they'd brought to him and asked, "Is this the car you'd like to drive?"
Jack Telnack, the Chief Design Executive, responded, "I wouldn't want that car parked in my driveway." Petersen encouraged the designers to bring up their ideas. Later there were involvement meetings at all levels throughout the company where issues like quality and work rules were discussed.
Team Taurus produced the designs for the Taurus and Sable in record time. The driving public loved the cars. Design was part of the reason. So was the increased quality that Ford began to deliver. The effects on the bottom line were dramatic.
In 1986 Ford profits beat GM's for the first time since 1924. In 1987 they were higher yet, a record, and Ford quality had moved to first among American car makers and third among all US companies. It was one of the greatest turnarounds in US business history.
Things seemed pretty good for a while until, in the mid-1990s, cracks started showing up in the corporate structure. They began with the Firestone tire/Ford Explorer controversy.
Accident data showed that Ford Explorers seemed to have more single-vehicle accidents than other vehicles. Many were rollovers. Ford blamed the Firestone tires it put on the Explorers. Firestone blamed the Explorers. Charges and counter-charges flew back and forth. Personal injury attorneys and investigative journalists were drawn like flies to honey.
In the end there was more than just bad publicity. Ford and Firestone severed a relationship that had continued since the founders of their companies, Henry Ford and Harvey Firestone had first established it decades before. The recall cost Ford over $3 billion. It was the sort of thing that couldn't possibly sit well with the Ford family.
Look around at other car companies for the families of the industry pioneers. Families with names like Dodge and Chevrolet and Olds and Chrysler have retired to clip their coupons or to explore other fields. But the Ford family still controls forty percent of the voting stock of the Ford Motor Company. In 1999 William Clay Ford, Jr., great-grandson of Henry Ford, took over the Chairman's role.
The Fords have an emotional and financial stake in how the company does. So it's logical that they would get a little nervous when someone was running the company in a way that might damage its heritage, reputation or profitability. At the end of the 90s, that someone was Jacques Nasser.
In the beginning Nasser and Billy Ford looked like great buddies. But then there was the Explorer thing. And Nasser was spending a lot of money on acquisitions. Some of them were car companies, like Volvo and Land Rover, that don't seem to make much strategic sense. Others were retail and Internet companies that made even less sense. Nasser was tinkering with the whole business model and it didn't work.
To make matters worse, the car business was not so good after the hot years of the 1990s. Ford was losing money on every car it sold. It was dead last among all auto makers in quality. The had lousy labor relations and huge pension obligations. The company was a mess, again.
And so it came to pass that on October 29, 2001, 42-year-old Billy Ford brought Nasser into his office and fired him. Then Billy took over the CEO role. Now what?
It's been eighteen months since Billy Ford took over the company whose name he bears and so far he's responding like Ford's leaders of the past. He's cutting jobs, thousands of them, only thus far the UAW hasn't agreed with him on how that will happen.
Billy has a lot of good will he can use. He's as popular as the top boss can be with the rank and file. Folks on the board and in the industry generally like him. But that won't be enough.
Billy Ford says he's going "back to basics". That means focusing on cars again, or, rather, cars and trucks. Plans are to release a new version of Ford's F-150 pickup and a couple of other new designs.
For now we don't know how this will all come out. All we can do is stand outside the Ford doors and wait to see what happens. Billy Ford is inside and you can hear the sounds of tinkering.
