The People's Tycoon: Henry Ford and the American Century (Vintage) (35 page)

A significant social development exacerbated the work-discipline problem at Ford. In the early days of the company, it had employed American-born workers of Anglo and German descent, most of whom had trained as mechanics. By 1913, however, Highland Park and its assembly lines were relying increasingly on new immigrants. Detroit, like urban areas throughout the United States, had seen a massive influx of people predominantly from eastern and southern Europe in the early twentieth century. In particular, it absorbed large numbers of Poles, Russians, Hungarians, Romanians, Italians, Greeks, Lithuanians, Ukrainians, and Finns. By November 1914, such foreign-born workers constituted 71 percent of the sixteen thousand employees at Highland Park. The problem, of course, was that the demands of the assembly line required conformity, clear communication, and synchronization of effort. The fact that many Ford workers now spoke little or no English hindered this process. So, too, did the preindustrial, rural, and village background of many southern and eastern European workers, which ill suited them for the discipline of the assembly line. Facing such barriers, Ford managers found it difficult to enforce standards of efficient production.
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In short, the company's labor problem stemmed from its inability to make human efficiency as great as technological and organizational efficiency in the production of the Model T. Ford managers tried to ameliorate the situation. Since nearly its founding, the company had established a tradition of humane treatment of workers, with a regular bonus system and a medical department. By the 1910s, it had implemented additional programs, such as the Ford Motor Band for musicians among the workers,
Ford Times
to foster a sense of cooperation and common purpose, and a twenty-acre park with athletic fields, playgrounds, and a bandstand for workers and their families. In 1913, under Lee's prodding, the company went further by increasing wages by 15 percent and tying them to a new
“skill-wages-classification system,” creating an Employees' Savings and Loan Association, and establishing a new employment department that mediated disputes between workers and foremen.
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Thus Ford's electrifying announcement of the Five-Dollar Day did not appear out of the blue. Rather, it was the culmination of a process of study and problem-solving. Based on the general approach indicated by the Lee investigations, this reform offered a dramatic incentive for workers to cement their loyalty to the company and increase their effort. Enhanced productivity would be the payoff.

Yet there was more to it. As Henry Ford made clear at the time—in fact, he much preferred talking about this aspect of the move—the Five-Dollar Day concept also flowed from his genuine desire to share the company's prosperity with its workers. Here was an impulse rooted not so much in bottom-line calculations of business profit, but in Ford's instinctive world-view. His sympathy for working people, and his sincere desire to spread the benefits of consumerism to them, helped fuel the revolutionary wage increase.

In his brief comments to reporters at the press conference announcing the Five-Dollar Day, Ford provided a glimpse into his own thinking about the new policy. “Mr. Ford said simply that he had determined upon a plan to share his prosperity with his employees,” reported the Detroit
Free Press.
He also clearly expressed his appreciation for the workingmen who made the company a success. “The commonest laborer who sweeps the floor shall receive his $5per day,” Ford noted with quiet earnestness. He promised that under the new guidelines no factory foreman would be able to fire a worker arbitrarily, and that the company would strive to find suitable jobs for all who wished to put in an honest day's work. Then Ford made the striking statement that was picked up by newspapers around the country: “We believe in making 20,000men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment million-aires.”
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Ford had privately expressed the same sentiments in meetings leading up to the announcement. In early January, he had called together Couzens, P. E. Martin, John R. Lee, Harold Wills, Norval Hawkins, and Charles Sorensen. This conclave considered budgetary and production matters for the upcoming year, but discussion turned quickly to deeper issues. Ford was concerned with the morale and performance of workers at Highland Park. A recent walk through the factory had made him a witness to a fistfight
between two men, an incident that left him depressed. Now, at this meeting of top managers, Ford began to write wage figures on a blackboard and compared them with anticipated company profits. The obvious discrepancy prompted discussion, and Ford scribbled higher and higher wage figures. He first put down a raise in wages to $3.00 a day, then raised it to $3.50, then to $4.00 and $4.50, and then, finally, to $5.00. Although some at the meeting remained skeptical, there was general consensus in favor of this dramatic hike.
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Fundamentally, Ford believed that high wages helped business in the long run by enhancing workers' ability to consume. In later years, he insisted that “the real progress of our company dates from 1914,” because with the wage increase “we increased the buying power of our own people, and they increased the buying power of other people, and so on and on. It is this thought of enlarging buying power by paying high wages and selling at low prices which is behind the prosperity of this country.” At another point, Ford said that with the Five-Dollar Day “we really started our business, for on that day we first created a lot of customers.”
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But the Five-Dollar Day also stemmed from a populist strain that colored his thinking throughout adulthood. His career as an automaker had been marked by a loyalty to working people and suspicion of financial power. Several episodes in Ford's life had illustrated this: the clash with early investors who sought to restrict his initiative and build a vehicle for the wealthy, the concept of the Model T as a car for the average citizen, the cultivation of a folk-hero image as a man of the people, and the struggle against the forces of monopoly capital in the Selden suit. Ford drew upon an American tradition of populism supporting the interests of ordinary citizens against the malefactors of great wealth, a tradition that had flourished with the assault by rural radicals in the Populist Party on the “money power” of urban industrialists in the nineteenth century, and lingered in the Progressive movement's attempts to regulate the power of capital and big business in the nation's affairs. The Five-Dollar Day sat atop this political foundation.
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However, a cultural version of populism proved especially crucial to shaping Ford's worldview. This tradition bestowed social dignity and economic independence upon the average citizen and defended a kind of old-fashioned, property-owning individualism. As Richard Hofstadter, a perceptive student of this movement, has noted, cultural populists upheld “a life lived close to nature and the soil, the esteem for the primary contacts of country and village life, [and] the cherished image of the independent, self-reliant man.” In his many public statements during this period, Ford revealed his kinship with this spirit of cultural populism. The Five-Dollar
Day, he sincerely believed, would enhance the prosperity of workers in his company and help protect them from powerful financial interests in industrial society. Ford also hoped that such reforms would help rural as well as urban workers in modern America. “What I want to do is to make the farmer as independent as I am; independent of the trusts, independent of the banks, the railroads,” he explained in phrases borrowed from the populist rhetoric of the late nineteenth century. “I think the normal life for a man is to get back on the land. The land is the healthiest way to be.”
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In newspaper interviews throughout 1914, Ford contended that his new wage policy flowed from several populist principles.

First, it expressed the notion that “good will” toward working people was the key to harmonious relations in industrial society. “I have been accused of being a philanthropist. I am not. I am an ardent believer in the gospel of good will,” he told journalists. “Because I happen to be the head of a factory that employs an army of men who are working to make profits for me is no reason why I should look upon them as chattels.” Yet this notion did not reflect an impulse of self-sacrifice. As Ford made clear in his statements, the attitude of goodwill kept his army of workers “contented, prosperous, and faithful …[thereby] increasing the greatest assets a factory can have—that of the ability to produce better goods for less cost.” The drastic pay raise was, in Ford's words, “a piece of efficiency engineering, too. We expect to get better work, more efficient work, as one result.” Goodwill, in Ford's realistic formulation, was a reflection of enlightened self-interest.
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Second, Ford drew upon a benevolent philosophy of wealth that became a mainstay of his social philosophy. To the dismay of businessmen and financiers throughout the country, he insisted that profits were not the property solely of capitalists. Instead, he offered a theory of stewardship. “The money I have gathered together is not mine to do with altogether as I please. I do not own it. It is mine to control simply as the steward of it. The men who have worked with me have helped to create it,” he asserted. Programs such as the Five-Dollar Day would pass back to them their fair share. Ford offered another declaration: “No one made himself wholly what he is: in a sense all humanity cooperated in the success that some men think they won alone.” Here was a challenge to individualist profit-seeking of which any populist would be proud.
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Third, Ford insisted that manufacturers and capitalists must recognize the simple humanity of industrial laborers in modern society. His new policy, he asserted repeatedly, pursued this objective by giving workers “wages that will support them without constant worry as to making both ends meet.” Five dollars per day “made in many homes the difference between pinching penury and a wage that permits pleasure and a little savings
besides.” Anyone who worked, Ford argued, deserved ”sufficient wages to keep him out of debt, to keep him in comfort, to give him a good home, and to educate his children.” At bottom, this position rested on a roughly drawn, but deeply felt, social egalitarianism. When factory owners ”realize that their laborers are human like themselves and should be treated humanely, the dawn of the ideal will approach,” Ford believed.
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Fourth, and finally, Ford's perspective was more beholden to old Populist Party attacks on financial power than he ever admitted, or even recognized. The automaker indignantly denied that his policy had any ideological components. Annoyed that some had defined his wage policy as socialism, he told reporters, “As for this plan of mine, it has nothing to do with any ‘ism’ whatever. Our company is making money enough to do some good in the world, and I'm glad to do it.” But Ford's debt to the Populist Party became evident in his explicit attack on one of its favorite bugaboos: wealthy financiers and banks. In New York a few days after the Five-Dollar Day announcement, Ford lashed out at Wall Street bankers, many of whom had criticized his $5.00 day. “Wall Street can't control the automobile industry,” he exclaimed angrily. “Most of the automobile manufacturers ‘under’ Wall Street are closed down in Detroit, because the money they needed to use in their business went elsewhere. Then they had to wait for the money market to get in a proper condition for them to borrow.” Ford's conclusion was defiant: “I'm not ‘under’ Wall Street.” Such rhetoric—contrasting the sweaty virtue of common workers with the greedy manipulations of big financiers—could have been lifted from any populist speech of the late nineteenth century.
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Many of Ford's most striking pronouncements appeared in national magazines. Popular journals such as
Everybody's Magazine
and
Harper's Weekly
were full of expressions of his high regard for, and identification with, workers. “You can trust your employees every time if you give them half a chance…. I have been a workman myself, and I know,” he declared in one piece. “Whatever I leave behind [in terms of wealth] I would rather leave to those boys out in the factory who have helped me make it than hand it out to a lot of relatives who never helped to earn a dollar of it.” At one point, Ford let slip that his sympathy for the lower classes even extended to hired ex-convicts at his factory. In the reporter's words, “Nobody knew it but himself and the judges and the police. He personally vouched for them in the beginning and went good for their board to get them started. They were turning out very well. ‘People are all right,’ he announced.”
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When asked about potential problems at Highland Park between an intelligent, educated managerial class and an ignorant workforce, he rejected such an assumption outright. Though a gap might exist between
these groups, he replied, “there is less difference than we might imagine. What one can do another may.” Ford “refused to think it [his workforce] unintelligent at all. He could take a man off the street, out there, quite raw, and make a good molder of him in a few weeks. He knew because he had done it.”
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