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Explore the evolution of the automobile industry in the United States through key figures like Henry Ford, the Ford Motor Company, and the Model T. Discover how innovative assembly line techniques revolutionized mass production, making cars affordable to the average person. Learn about the significant impact of the automobile industry on the nation's economy and industrial power. Delve into labor issues faced by auto workers and the social implications of Ford's factory worker policies.
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Chapter 3 The Industrial Development of the United States, continued…
Review of American Industrialization • Trigger Industry: Railroads • Key Industry #1: Oil • Key Industry #2: Automobiles
THE AUTOMOBILE INDUSTRY • Who invented the automobile? • 1896: For developed his own automobile w/a gasoline motor, but he was using Benz’s idea.
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.
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
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
How did Ford make the automobile affordable? • Assembly line methods • Mass production techniques
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
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
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
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
Why is automobile manufacturing important? • Uses products of many other economies => supports other economies • Raw materials required for automobile production?
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?
High Mass Consumption • By making automobiles affordable for ordinary people, Henry Ford created an age of high mass consumption
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.
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.
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
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?
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.
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
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