The People's Tycoon: Henry Ford and the American Century (Vintage) (11 page)

This financial lifeline had allowed Ford to complete the second version of his automobile by midsummer 1899. This prototype looked promising for production. An article entitled “Ford's Automobile Has New Features and Is a Novel Machine,” in the Detroit
Journal,
described the car in detail. Complete with one illustration of the whole car, and another of its chassis and gear mechanism, the article offered information on Henry Ford and his financial backers. It devoted most attention, however, to an extensive description of the “self-propelling carriage's” mechanical features and engine, and concluded with a reporter's account of a brief trip in the vehicle.
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With the appearance of this prototype, other Detroit investors began to crowd in around Ford and his original backers. They included William C. McMillen, scion of a wealthy family of capitalists who, among their vast holdings, owned the Detroit Dry Dock Company, where young Ford had worked years earlier; Dexter Mason Ferry, owner of a large seed firm; Alfred E. F. White, director of several McMillen and Ferry corporations and banks; Thomas W. Palmer, lumber magnate and U.S. senator from Michigan; Frank R. Alderman, a prosperous life-insurance salesman; Safford S.
DeLano, heir to the fortune his father earned as president of the Detroit Steel Works; and the aforementioned George Peck. In other words, the elite among Detroit's financial community stepped forward to put their capital behind the manufacture of Henry Ford's horseless carriage.
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But Murphy was the linchpin. Though Ford's other backers were certainly impressive, Murphy's towering reputation in Detroit commercial circles granted Ford instant credibility, and reassured other potential investors. Moreover, unlike the other investors, he took an active role in the Ford enterprise over the next few years.

Murphy had been born in 1855 in Bangor, Maine, in a long line of lumbermen. The son of a prosperous sawmill owner who migrated to Michigan, he had attended the University of Michigan before going to Boston to study business and music. Upon returning to the Midwest, Murphy took a position in his father's company at a mill in Bay City. This became his schoolroom for learning the lumber business, and after a few years he returned to Detroit to become involved in his father's endeavors. The family lumbering operation spread from Michigan to Wisconsin, and then to northern California with the organization of the Pacific Lumber Company. Growing profits gradually took the Murphys into real-estate investments—by the 1890s, along with the McMillen family, they owned large sections of downtown Detroit—and other commercial ventures included the formation of the Murphy Power Company, the Murphy Oil Company, and the Simon J. Murphy Company. The elder and younger Murphy, in a visible sign of their wealth and power by the 1890s, began construction on Detroit's first skyscraper, the Penobscot Building, which would reach thirteen stories by 1905 and forty-seven by the 1920s.

Of calm and dignified demeanor, well dressed, with thinning hair and spectacles, William H. Murphy projected a quietly powerful presence to the world. In his business affairs, as Ford would learn, he combined hard-nosed commercial judgment with attention to detail. Ironically, since Murphy had suffered from near-total deafness since boyhood, the great love of his life was music. As a youngster, he had tried to play the violin; as an adult, he organized and supported orchestras. Murphy became the leading force in the Detroit Symphony Society, pouring his money and time into creating the Detroit Symphony and building Symphony Hall. In 1925, four years before his death, the development of radio allowed him to have powerful speakers and headphones installed in his private box. To his joy, the sounds of the orchestral music that he loved, but had strained to hear only faintly for decades, now came through fairly clearly.

Murphy had a long-standing interest in horseless carriages. In 1883, he
traveled to Philadelphia to inspect a steam-engine fire wagon and was so impressed that he purchased a model for the Detroit Fire Department. Apparently, Ford had met Murphy many years earlier, when he was running his small sawmill on his father's property in Dearborn. In 1898, they became reacquainted through Mayor Maybury, who was boosting Ford's horseless carriage to anyone who would listen. This had set the stage for Ford and Murphy's pivotal automobile journey to Orchard Lake in July 1899.
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With Murphy's stamp of approval wiping away any doubts, Ford and his investors officially formed the Detroit Automobile Company on August 5, 1899. Papers for the corporation, filed with the county clerk on that date, indicated that the company was capitalized at $150,000, with $15,000 actual cash put into it in the form of fifteen hundred shares. Though a stockholder, Ford contributed no money: he was assigned shares on the basis of his mechanical expertise as architect of the company's automobile.

One final step remained. Ten days after the birth of Detroit Automobile, Henry Ford resigned from the Edison Illuminating Company to bet his future on the new world of the motorized vehicle. But in doing so, he indulged in an old habit. Just as he had once described his departure from William Ford's farm, he now cast his leaving the company as an escape from a disapproving authority figure. “My gas-engine experiments were no more popular with the president of the company than my first mechanical leanings were with my father,” he wrote. “The Edison Company offered me the general superintendency of the company but only on the condition that I would give up my gas engine and devote myself to something really useful.” As he observed dramatically, “I had to choose between my job and my automobile.”
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Again, however, Ford's need for mythmaking twisted the facts. According to all evidence, there was no angry split with Edison Illuminating, his employer for almost the last eight years. According to Alexander Dow, Edi-son's manager, he and Ford had an amiable discussion of the future in the spring of 1899. In Dow's words:

Once more, Ford's proclivity for portraying himself as the lonely, heroic individual triumphing over the odds had surfaced. Now it was relatively harmless. Later it would become a much more troublesome trait.
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The Detroit Automobile Company, after signing a three-year lease, set up operation in a three-story brick building at 1343 Cass Avenue. Clarence A. Black, Detroit city controller, was installed as president, and Frank R. Alderman became the company secretary. But the real powers behind the scenes were Murphy, McMillen, and Maybury, the trio who dominated the board of directors, and Ford, who directed production endeavors as mechanical superintendent. Within a couple of weeks, the organization had purchased a number of small machines and tools, and Ford assembled a manufacturing team of thirteen workers who began the task of preparing the plant for production.

The future looked rosy. Alderman, who served as the organization's spokesman, issued a confident statement to the Detroit
Free Press
on August 19, 1899, on the young company's prospects. Ford's vehicle, he announced, promised great things as it moved toward production:

But problems emerged. For reasons that are not entirely clear—his investors may have demanded a larger, more expensive model that would sell for a higher price—Ford had set aside his second car and was developing a third model. High-sided, enclosed with an overhanging roof, and much heavier than his earlier vehicles, it struck many who saw it as a horse-drawn delivery wagon without the horse. But newspaper stories waxed enthusiastic. On January 12, 1900, the Detroit
Journal
provided a long description of the automobile. Then, on February 4, a laudatory story appeared in the Detroit
News-Tribune
carrying the headline “Swifter Than a Race-Horse It Flew Over the Icy Streets.” This colorful narrative came from a reporter who took a ride in the new car with Ford. As they traversed the streets of the city in the heart of winter, this “thrilling trip on the first Detroit-made automobile” included acceleration to the heart-stopping speed of twenty-five miles an hour, a demonstration of the car's braking capacity, and the deft
evasion of pedestrians and horse-drawn vehicles. In the reporter's memorable phrase, as they arrived back and turned into the Cass Avenue plant, the auto “slipped like a sunbeam around the corner.” Thus, as the new century began, Henry Ford seemed poised to take the final step onto the summit of success. His new automobile appeared ready for presentation, and sale, to an enthusiastic public.
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But the spirit of optimism and anticipation at the Detroit Automobile Company proved to be an illusion. Behind the scenes, the real story was unfolding much less happily. For all the promise of Ford's automobile work, for all the wealth and prestige of his backers, and for all the public fascination with horseless carriages, the enterprise was floundering. It would become the first of several frustrating failures for Henry Ford, automobile manufacturer. Several problems plagued the new company, and most of them were his doing.

First of all, Ford's new prototype was simply not a very good vehicle. Despite the glowing newspaper accounts, the car had few virtues. In violation of his stated preference for a lightweight, sturdy, efficient automobile, this new “delivery wagon” model appeared big, heavy, even clunky. In addition, most of the time it didn't run very well, if at all. Many of its body and mechanical parts were being machined elsewhere, and they were slightly deficient and required reworking. An inexperienced workforce faced difficulties in correctly assembling these parts, because a number of minor problems had plagued the manufacturing process. Frederick Strauss, who had gone to work for Ford, described how the manufacturing team struggled continually with the vehicle's balky ignition and carburetion system. “We did get one of the engines to run on this car,” he stated, “but we had an awful time doing it.” Apparently, one of the few times Ford's automobile actually worked correctly was for the “sunbeam around a corner” newspaper story. More often, the appropriate metaphor would have been that of a candle feebly flickering in a dark room.
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Even more fatally, Ford was dallying and equivocating in finalizing the prototype for production. The nature of the problem was murky. According to some observers, Ford worked hard. William Pring, who joined the Detroit Automobile Company soon after it started up, insisted that his boss was deeply involved in the development of a prototype: “Mr. Ford worked right in the plant with us. He was more or less an instructor.” But others offered a different judgment. “Henry never put much time in the shop,” recalled Ford's old friend Strauss. “He might come in every day for an hour or two.” In fact, Strauss continued, when company president Alderman pushed Ford to get a car into production, the latter engaged in some trickery:

Oliver Barthel—Ford's old accomplice, who now worked for him—may have come closest to identifying the real problem. Ford, he asserted, never stopped changing various features as he strove to improve his automobile prototype. He refused to “freeze” the design. “Too many changes were made,” Barthel insisted. “They'd design something and build it, and then they'd discard it and build something else to take its place.”
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As this drama of delay and deception unfolded, Murphy began to play a larger role. According to observers, he stood as the bulwark of the company's financial structure, and Ford was especially concerned not to alienate him. But as Murphy paid closer attention to the troubling delays at the Cass Avenue plant, Ford concocted a ruse to fool him as well. A peculiar situation took shape—the most powerful business figure in the company was being systematically misled by its supervisor of manufacturing. Strauss explained how Ford temporarily misled Murphy by a show, rather than the substance, of progress. “We had parts for about a half-dozen automobiles. We had a long bench, and all the parts we had finished were on it,” Strauss explained. “Mr. Murphy and some of his friends would come along and see all these parts on the bench, and they were all machined perfectly, and it looked wonderful. They were very well pleased with them.”
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By the fall of 1900, however, such stratagems were failing to hide Ford's evident lack of progress in bringing a car to production. The situation deteriorated to the point of breakdown. As months went by with no automobiles appearing, some of the stockholders grew disgusted, jettisoned their holdings, and walked away, while others tried to shore up the enterprise. Maybury bought most of the malcontents' shares, and Murphy pumped additional cash into the enterprise to keep it afloat. Eventually, Henry Ford would spend about $86,000trying to develop a car with which he was satisfied. The patience of the company's remaining investors finally ran out completely. The board of directors convened a special meeting in November 1900and demanded that Ford present an accounting of the situation. But he got wind of the meeting in advance and told Strauss, “If they ask for me, you tell them that I had to go out of town.” With Ford's absence providing final evidence of the company's problems, the board decided to lay off most of the workforce and give up much of their shop space at Cass Avenue.