The People's Tycoon: Henry Ford and the American Century (Vintage) (69 page)

In addition, an abiding bitterness among Ford dealers prevailed throughout the decade. The 1920 recession in the American economy had caused a serious decline in the automobile market, and Ford responded decisively. He lowered the price of the Model T and demanded further economies in the production process at the Highland Park and River Rouge plants. More important, however, he pressured Ford suppliers and dealers by sending them new shipments of automobiles whether they requested them or not and demanding that they pay the company for them. Dealers were forced to procure loans from local lenders to cover their consignments, thus shifting the financial burden from the company to its representatives in the field. As one observer commented, “Instead of borrowing money himself, Ford compelled his dealers to borrow.” While allowing his company to survive economic hardship, Ford's move created much rancor among his dealers. Years later, they were still complaining, in the words of one, that the “Ford dealer is of but not in the Ford organization. Let him pledge his home, borrow the last penny he can at his bank, and then things continue…. Let him turn to the Ford organization and he will find that there is no balm in Gilead; no, not for him.” The fact that many dealers felt saddled with an outdated car only increased their doubts about the future.
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Ford's ambitious proposal concerning waterpower in the Tennessee River Valley was another source of lingering controversy. In 1921, his interest in hydroelectric energy led him to propose to lease several inefficient installations near Muscle Shoals, Alabama—two nitrate-producing plants and an electricity-generating facility owned by the federal government—for ninety-nine years at a cost of $5 million. He proposed to modernize the plants and produce ammonium nitrate for fertilizer, and to install updated power machinery at the dam to develop hydroelectric power for distribution in this economically depressed region. The Chamber of Commerce, the American Federation of Labor, and the Farm Bureau Federation, among many other groups, immediately endorsed Ford's proposal. Rural organizations and farm magazines also threw in their support. Ford explained his vision of waterpower fueling economic development with factories, new cities, and modernized farms. His populist impulse surfaced when he stressed that the Muscle Shoals project would help liberate the power industry from the clutches of big financial interests. “Wall Street will have no part either in financing or operating Muscle Shoals if I can help it,” he promised. “The great private financiers own the bulk of the country's coal mines. The financiers, centered in Wall Street, have a stranglehold on the industry and transportation of the country…. I am consecrated to the principle of freeing American industry.”
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Conservative Republicans in the Harding administration were critical when electric-power companies and chemical corporations complained that Ford would be awarded an unfair advantage in the marketplace. Progressives such as Senator George W. Norris advocated public ownership of the water resources of the Tennessee Valley. They argued that turning over Muscle Shoals to Ford would grant to an individual rights to public resources that would last for several generations. Such a huge gift of the people's property would be unconscionable. Debate and indecision in Washington dragged on, and then another imbroglio muddied the waters. In late 1923, Calvin Coolidge—now president, after Harding's death— made public statements implying that he and Ford had made a deal: Coolidge agreed to back the Muscle Shoals project when Ford promised to stand down from the upcoming presidential race. The subsequent uproar caused Ford to withdraw his proposal in October 1924. Thus the Muscle Shoals project not only alienated portions of the American public, but suggested that Ford had overreached himself.
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This growing set of problems appeared even more threatening when critics, as never before, began to question the Ford Company and its future, its founder and his values. Such criticism came increasingly from some of the leading intellectuals and organs of opinion in the United States. Reinhold
Niebuhr wondered about the man who had become “the hero of the average American.” Ford's popularity, he argued, was based on the perception that he had accumulated his fortune and created his vast enterprise without being ruthless. Niebuhr argued that the facts—Ford's opposition to organized philanthropy, a stagnant rate of pay for his workers, the tendency of his company to dismiss older workers when they had outlived their use-fulness—told a different story. At the Ford Motor Company, “human material is used with a ruthlessness and a disregard of ultimate effects which may be matched, but is not surpassed, by any industry.” Though Ford's image as a benevolent reformer may have swayed public opinion, Niebuhr was determined to pursue “a thankless but an important task to set history against mythology.”
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Rexford G. Tugwell, a prominent political economist who would assume a key role in the New Deal within a few years, wrote a searching review of
Today and Tomorrow
(1926). After examining Ford's business and social philosophy, he concluded, “Much of what he says is sound, and some of it illuminating … [but] some of it is nonsense.” He compared Ford's social theorizing to the shallow ideas of college freshmen “of which they have to be disabused before they can begin, if they ever do, to think.” Tug-well condemned Ford's simplistic views on banking and finance, his myopic denunciation of any kind of business regulation, his misunderstanding of the nature of the labor market, and his primitive attitudes toward the function of capital in a modern economy. Full of sensible views on matters involving mechanics and industrial production, Ford excelled when he could discuss facts, techniques, and concrete situations. But he stumbled badly, Tugwell concluded, when attempting to discuss matters involving ideas, values, and contingencies. Ford displayed “a mind alert and effective within its range, unusually suspicious and frightened outside it, a mind which conceives things simply or not at all.”
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Many prominent publications brought attention to another difficulty in the Ford empire—its leader's absolute control over the organization. The New York
Times
ran a lengthy story entitled “The Mussolini of Highland Park” that described Ford as an “industrial Fascist.” Written by Waldemar Kaempffert, it depicted “the world's outstanding example of complete autocratic control of a vast industry.” It showed how Ford controlled everything in his giant enterprise—treatment and wages for workers, the design of every part in his automobile, the setting of prices and costs, the nature of sales and marketing strategy. “His despotic control over the greatest manufacturing organization that the world has ever seen is the expression of a fearless independence,” the article noted. “Ford brooks neither opposition
nor dictation from others…. Ford yields nothing. He is either all right or all wrong.”
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Some of Ford's own managers also delicately questioned his decisive style of leadership, wondering “whether it is not a curious instinct rather than a logical reasoning that leads to his swift decisions.” An essay in
The New Republic
explored this issue and reached a less diplomatic conclusion. It asserted that the “pioneer atmosphere” of the early Ford Motor Company, with its spirited self-made men, “has been replaced by something much more like the court of an oriental monarch in its combination of sycophancy and ruthlessness.”
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Edmund Wilson, already establishing his reputation as a trenchant social critic, skillfully dissected the Ford psyche as well as the Ford Company. He offered the usual accolades, describing Ford as “a mechanical and industrial genius” who had created an inexpensive, indestructible car for ordinary Americans. But he also decried the fact that as the years went by Ford seemed to care less and less about his workers' welfare, had become increasingly addicted to self-advertising, and had surrounded himself with yes-men who feared to disagree with him. The discrepancy between declining wages and a speeded-up assembly line for employees on the one hand, and Ford's image as a benefactor of the workingman on the other, constituted a fraud at the heart of his reputation. In Wilson's view, the automaker's public pronouncements also revealed that “his mind is illogical and volatile; his genius seems purely intuitive. It is as if he had been born with a special sense of materials and mechanical processes…. He is, however, completely naïve in dealing with other things and of an extreme instability of opinion.” Ford, Wilson concluded, had become “The Despot of Dearborn,” whose great talent and force of will, originally focused on developing his vast enterprise, had now degenerated into a kind of tyranny.
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Mounting criticism of Ford also came from former supporters in the business community. B. C. Forbes of
Forbes
magazine wrote a scathing article in May 1927 that described Ford as “a democrat turned autocrat.” For years, he confessed, “I swallowed unquestioningly all the encomiums I read about the Detroit manufacturer,” before the growing volume of complaints from Ford workers and dealers around the United States became impossible to ignore. After investigating these charges of brutal treatment, Forbes issued an indictment: “I know of no employer in America who is so autocratic. I know of no employer who adopts a more dictatorial attitude toward associates. Time was when Ford was the most democratic of men. He is no longer.” Power and wealth, Forbes charged, had corrupted this great industrial innovator. Since he was surrounded by lackeys and free to indulge his
every whim, Ford's “sense of his own might has become grotesque,” Forbes wrote. This had become manifest in his high-handed treatment of his executives, his relentless demands for productivity from his workers, and his determination “to compel the buying public to take exactly what he chooses to offer them” with the outdated Model T. For Forbes, however, Ford's narcissism may have appeared most clearly in the grandiose social theorizing in his books. There he appeared to be “posing as a writer when all the world knows that—well, that he is not a writer.”
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The recurring words in these critiques—“despot,” “monarch,” “fascist,” “autocrat,” “dictator”—suggested the essence of the company's looming problems. The idea had taken root that Henry Ford, for all of his innovations and spectacular successes over the first two and a half decades of the twentieth century, had become too powerful. Insulated and unchecked, he worked according to his own lights and decided according to his own whims. This difficulty was compounded, many observers believed, by the fact that Ford's choices reflected outdated thinking. Ironically, he seemed to be falling out of touch with the society he had played such a large role in developing. Henry Ford's power appeared all the more grating because it served anachronistic ends.

This was nowhere more evident than in Ford's engagement with the American consumer. By the late 1920s, the pioneering figure in defining modern notions of the good life had become uneasy with the onrushing development of consumer culture. The forces of material abundance he had helped unleash twenty years earlier were now rushing headlong into the future, as Americans explored new areas of self-fulfillment and adopted new social, cultural, and economic strategies for buying goods and achieving happiness. Ford found this transformation to be confusing, deeply unsettling, and, ultimately, dangerous.

In many ways, Ford maintained a snug relationship with consumer society throughout the 1920s. Early in the decade, he reassured Allan L. Benson that although people should work diligently they “should also have time for home and recreation.” A few years later, in
Today and Tomorrow,
he repeated his long-standing belief in the centrality of consumerism and leisure to the modern industrial economy. “What is really bothering most people is how to put in their spare time. That used to bother only what was called 'the leisure class,' ” Ford argued. “Now, we find in our own industries that eight hours a day through five days a week gives all the production that is necessary…. Our workmen have leisure.” This situation, he concluded,
demanded that manufacturers continually ask themselves a simple question: “How can I best serve the consumer?” As Charles Sorensen observed, Ford had shaped his life's work “to demonstrate the superiority of an economy of abundance over one of scarcity, and to begin the elevation of a standard of living to a height never before dreamed of.” The 1920s seemed to mark the zenith of this endeavor.
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In a 1928 series of articles in
Forum
magazine, Ford fully revealed his consumer orientation. Modern mass production, he pointed out, was not only providing an unprecedented volume of goods but liberating women and children from their former exploitation as laborers in the industrial system. Husbands, wives, and youngsters were now entering the marketplace seeking new products as manufacturers and merchants scrambled to supply them. “Human demands are increasing every day and the needs for their gratification are increasing also. This is as it should be,” Ford wrote. A key factor in this new consumer economy, he continued, was the emphasis on endeavors outside the workplace. “There was a time when leisure was regarded as lost time,” Ford wrote. “We, in America, have changed our thoughts in this regard very much during the last few years. We have come to see that leisure is not waste time…. It has been discovered that the workingman very soon finds a desirable and healthy way to use his leisure time to his own personal advancement and for the greater happiness of his family.”
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