Chapter 3

1. Chapter 3 The Industrial Development of the United States, continued…

2. Review of American Industrialization • Trigger Industry: Railroads • Key Industry #1: Oil • Key Industry #2: Automobiles

3. THE AUTOMOBILE INDUSTRY • Who invented the automobile? • 1896: For developed his own automobile w/a gasoline motor, but he was using Benz’s idea.

4. What was Henry Ford’s contribution to the American Industrialization? • Not only was Henry Ford an American automobile manufacturer, he created efficient assembly line techniques to mass produce cars.

5. Ford Motor Company • 1903: Ford establishes the Ford Motor Company • 1908: Ford introduces the Ford “Model T” (also known as the Tin Lizzie) • Traveled at up to 70km/h • Reliable performance • Low cost

6. The Model T • Before the Model T was built, only a small number of cars had been built, and these were only for rich people. • But Ford & the Model T created a new era of automobile ownership • First Model T cost $850 • Within the range of the average person

7. How did Ford make the automobile affordable? • Assembly line methods • Mass production techniques

8. Where did Ford get these ideas? • We know that mass production techniques & assembly line methods were coming into use in both the British and American industrial revolutions • But Ford got his idea in the least likely place…the horse slaughterhouse • Apparently Ford was visiting a horse slaughterhouse one day, and he saw the efficiency in their system • Horses brought in • Killed • Skinned • Butchered for meat • Each step in the process was divided => increased efficiency => increased production rate

9. Ford speeds up the production rate • 1914: Model T is only offered in black • Other colours took too long to dry => slowed down the speed of the assembly line • Black dried the fastest • Vertical integration • Ford gained control of firms manufacturing component parts & raw materials

10. The Results • B/se the Model T was sold at such a low price, Ford sold more than 15 million automobiles b/wn 1908 & 1927. • Ford did not change the design of the Model T => this allows him to cut the costs even more. • Why? • By 1923, Ford can sell the Model T for $260! • Ford’s ideas made the United States the number one automobile producer in the world. • By 1927: the Ford company was producing 81% of all automobiles in the world

11. Producing Automobiles: USA v. Britain • 1927: • USA produces 81% of world’s automobiles, manufactures 3.5 million automobiles • Britain is the second largest producer, manufactures 212,000 automobiles

12. Why is automobile manufacturing important? • Uses products of many other economies => supports other economies • Raw materials required for automobile production?

13. Why is automobile manufacturing important? continued… • Think about the many companies that supply parts & services to car manufacturers – like the Ford Motor Company • Car manufacturers provide hundreds of thousands of jobs in North America. • With this in mind, what is the problem w/outsourcing automobile production? • Why do companies (like the Ford Motor Company) outsource?

14. Photographs from the collection of Henry Ford

15. High Mass Consumption • By making automobiles affordable for ordinary people, Henry Ford created an age of high mass consumption

16. Why is automobile manufacturing important? continued… • The automobile industry helped make the USA one of the world’s leading industrial powers. • The textbook says the USA still holds this position, but it was published in 1990, so I would say countries like Japan and China have overtaken the American automobile industry by now.

17. Labour troubles, 1914 • Early January, 1914: threats of labour troubles – factory workers are tired of the long days and little pay • Auto workers experience strain from assembly-line methods • Stop going to work in Ford’s factories • High turnover (Ford must hire 40,000 workers/year in order to keep 10,000 on the job) • Our textbook makes Ford sound like a revolutionary man when he introduces changes to the factory workers’ day on January 5, 1914. But in reality, he had no choice – he was facing a complete shut down of his factories.

18. Ford if forced to change: A New Day in the Life of a Factory Worker • January 5, 1914: Ford changes the day of a factory worker

19. Were Ford’s changes as good as they sounded? • Thousands of people rush to accept Ford’s “changes.” • But they find that Ford will pay only $2.60/day, plus a $2.40/day bonus if the worker remains at his automobile plants for 1 year. • All workers were required to do the following: • No smoking • No drinking • Must learn English • Become US citizens • Open bank accounts Relates to USA population growth at this time • Were these demands unreasonable?

20. Industrial Relations • Ford’s news made the headlines in every major newspaper b/se the changes were so revolutionary for the time. • Think back to Britain’s working conditions… • Began an era of industrial relations & made automobile workers one of the highest paid groups in the American economy.

21. The “Ford Idea” • Despite the fact that Ford was forced to make changes to his workers’ day, he was credited with making a revolutionary change. • Soon other industries implemented the so-called “Ford Idea.” • Result: consumer spending began to increase • Higher wages => greater purchasing power => increased sale of Ford automobiles

22. Philanthropist & Pacifist • Henry Ford was both a philanthropist & a pacifist. • Ford did not want US to get involved in the world war, but nevertheless changed production in his factories to support the war movement • Claimed his automobile plan produced a bomber an hour • Ford & Edsel (his son) established the Ford Foundation to donate money to poverty, human rights & justice, education, culture, international affairs, & population issues