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Speaker 1: Pushkin too quick. No, it's perfect Pushkin stuff. You got it.

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Speaker 2: Business History is not only a show about the history

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Speaker 2: page in Apple Podcast. And to be clear, we are

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Speaker 2: delighted to have you listen to the show in whatever way.

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Speaker 1: You want to listen to it. Thank you for your

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Speaker 1: attention to this.

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Speaker 2: Matter, Robert Smith. Today we're going to the Mount Rushmore

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Speaker 2: of Business History let's do it. Henry Ford amazing invented

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Speaker 2: the assembly line as we know it, transformed cars from

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Speaker 2: toys for rich people to tools for the masses. Created

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Speaker 2: the Model t the car that turned cars from toys

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Speaker 2: for rich people into tools for everybody, which would have

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Speaker 2: been enough to make him one of the al time grades.

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Speaker 2: But he did much more than that. Henry Ford invented

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Speaker 2: modern mass production. He drove this shift from a world

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Speaker 2: where manufactured goods were expensive and scarce to the world

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Speaker 2: we live in now, where manufactured goods are everything, abundant, cheap.

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Speaker 1: We're tripping all.

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Speaker 2: Over him, and yet Ford didn't really understand the magnitude

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Speaker 2: of this transformation. He didn't understand that once you teach

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Speaker 2: people to buy stuff, they just want to keep buying more.

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Speaker 2: Henry Ford invented mass production, actually called it Fordism, but

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Speaker 2: he never understood mass consumption. And that is why in

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Speaker 2: the end Henry Ford got beat.

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Speaker 1: I'm Jacob Goldstein and I'm Robert Smith, and this is

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Speaker 1: Business History.

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Speaker 2: A show about the history of business. This is the

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Speaker 2: first of two episodes we're doing about Ford, General Motors

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Speaker 2: and the invention of the modern consumer. A car race,

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Speaker 2: if you will, I will first thing to know about

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Speaker 2: Henry Ford. In some ways, the man was a slacker.

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Speaker 2: Give us this paragraph from his autobiography.

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Speaker 1: I was born on July thirtieth, eighteen sixty three, on

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Speaker 1: a farm at Dearborn, Michigan. And my earliest recollection is

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Speaker 1: that considering the results, there was too much work on

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Speaker 1: the place. And that is the way I still feel

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Speaker 1: about farming.

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Speaker 2: And this is actually going to be important. And fortunately

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Speaker 2: for him, he was born at a moment when people

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Speaker 2: were figuring out that machines could do work, could do

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Speaker 2: farm work. And Ford gets into tinkering with these machines

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Speaker 2: when he's a teenager on the farm. There are these

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Speaker 2: primitive farm machines that are basically like steam engines on

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Speaker 2: wheels that you can roll over to your farm and

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Speaker 2: use them to power a sawmill or a thresher. I

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Speaker 2: actually had to look up what a thresher was.

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Speaker 1: Do you know? It separates the wheat from the chaff,

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Speaker 1: and the chaff is like the stem and all the

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Speaker 1: other stuff you.

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Speaker 2: Don't want, the part of the weight that you don't want.

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Speaker 1: Yeah.

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Speaker 2: So Ford grows up tinkering, gets married, starts farming, runs

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Speaker 2: a saw mill. He's there you know in Dearborn, Michigan,

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Speaker 2: seeming destined for this very ordinary life, but he's restless,

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Speaker 2: And when he's twenty eight years old, he and his

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Speaker 2: wife Clara leave the farm and Ford gets a job

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Speaker 2: working in Detroit at the Edison Illuminating Company.

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Speaker 1: Shout out Edison for Edison series. How many careers did

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Speaker 1: that man launch?

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Speaker 2: It's a fun question how many did he destroy? So

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Speaker 2: Ford is a brilliant machinist. He's good at his job.

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Speaker 2: He loves to tinker, but he's still kind of a slacker.

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Speaker 2: He still doesn't want to just go punch the clock

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Speaker 2: every day and work for the man. Don't actually know

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Speaker 2: if people punched clocks yet. At this point, one of.

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Speaker 1: Edison's protegees had to invent the time clock.

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Speaker 2: Yeah, Henry Ford finds this basement room across the street

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Speaker 2: from the Edison shop where he can go during the

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Speaker 2: work day and slack off with his buddies and tinker.

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Speaker 1: To be clear, a lot of us might just go

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Speaker 1: to the bathroom and spend an extra ten minutes in there.

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Speaker 2: But yeah, Ford also has this basically a shed behind

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Speaker 2: his house where he's tinkering at night and on weekends,

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Speaker 2: and so this is the eighteen nineties. And if you're

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Speaker 2: into tinkering with machines in the eighteen nineties, you are

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Speaker 2: going to get into cars. It is this kind of

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Speaker 2: Cambrian explosion of kind of model cars. You know, people

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Speaker 2: are building them in garages, and there are steam powered cars,

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Speaker 2: and there are electric cars and their internal combustion engines

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Speaker 2: coming along. There is a new car magazine title The

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Speaker 2: Horseless Age, Oh beautiful, still published today. The Horseless Aage

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Speaker 2: is now called Automotive Industries. I wish it was still

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Speaker 2: called the.

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Speaker 1: Horseless it's horselessless.

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Speaker 2: Is somebody doing driverless age. This is why we call

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Speaker 2: them now autonomous instead of driverless cars.

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Speaker 1: Oh nice.

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Speaker 2: And Ford goes to the eighteen ninety three Chicago Worlds

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Speaker 2: Fair and sees Auto Daimler's gasoline buggy Damler of you

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Speaker 2: know Damler.

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Speaker 1: Benz, because at this time he had worked mostly with

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Speaker 1: steam engines, and so the gasoline engine is an innovation. Yeah.

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Speaker 2: Yeah, this car has two cylinders, top speed eleven miles

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Speaker 2: an hour. It is a little buggy with a little

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Speaker 2: gas engine on it.

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Speaker 1: You can go fast on a bicycle.

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Speaker 3: Yeah.

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Speaker 2: And this was around the time of the bicycle boom. Right,

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Speaker 2: there was a bike boom at this time that we

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Speaker 2: talked about in the Seer show. Four gets inspired by

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Speaker 2: Daimler's gasoline engine. So he goes home and he starts

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Speaker 2: tinkering in a little shed behind his house on this

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Speaker 2: little toy gas engine he's building from spare parts. And

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Speaker 2: on Christmas Eve eighteen ninety three, as his wife Clara

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Speaker 2: is cooking the Christmas Eve dinner, he busts into the

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Speaker 2: kitchen with this little toy gas engine he built, and

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Speaker 2: he's like, look, honey, I built an engine. He bolted

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Speaker 2: to the kitchen sink and he asks Clara to slowly

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Speaker 2: trickle a gas into the engine. He's turning I guess

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Speaker 2: the flywheel and it doesn't work, and he's messing with it, and.

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Speaker 1: Then it comes on.

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Speaker 2: It runs and it's shooting flames out the back and

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Speaker 2: it breaks after thirty seconds. But Henry Ford has built

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Speaker 2: an internal combustion engine.

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Speaker 1: There arose such a clatter. This is like the night

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Speaker 1: before Christmas for industrialists.

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Speaker 2: Yeah, somebody came to see what was the matter. It

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Speaker 2: was Henry Ford building an engine. Well, I don't know

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Speaker 2: anything about how Christmas Eve dinner comes out it was amazing.

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Speaker 2: It was amazing historically certainly. And so now Ford starts

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Speaker 2: working on a bigger engine with his buddies and he

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Speaker 2: is obsessed with this. But crucially to Ford, I think

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Speaker 2: it doesn't feel like work. He's not a man at

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Speaker 2: a certain level who loves to work. He loves to play.

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Speaker 2: And for him this is play. Is he's in a

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Speaker 2: flow state.

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Speaker 1: We say it. We see this again and again in

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Speaker 1: business history. We saw what Thomas edis and we saw

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Speaker 1: it with Warren Buffett, like these are people who want

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Speaker 1: him to slack off, and by slack off mean transform

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Speaker 1: the world.

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Speaker 2: Yeah, Warren Buffett, slacking off is taking a trade on

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Speaker 2: a Saturday to go knock on the door of an

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Speaker 2: insurance company and talk to the vice president.

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Speaker 1: Yea.

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Speaker 2: For Henry Ford, it's building a little gas powered buggy

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Speaker 2: in the shed behind his house with his buddies, which

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Speaker 2: he does, and it takes him a few years. It's

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Speaker 2: not like he goes and does this in a week

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Speaker 2: or a month. It's it's a year's long project. And

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Speaker 2: finally on June four it's worth eighteen ninety six. Henry

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Speaker 2: Ford thinks it's ready. He thinks I can build this

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Speaker 2: gas powered quadricycle they called it, and I can drive it,

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Speaker 2: and I can drive it. So this thing, it's like

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Speaker 2: a four wheel bike. I guess that's why they call

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Speaker 2: it the quadricycle with a little buggy seat in the middle.

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Speaker 2: Apparently there were no brakes, which I love.

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Speaker 1: I don't exactly.

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Speaker 2: It did have a horn, so maybe it's just hogog

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Speaker 2: out of the way.

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Speaker 1: I mean, eleven miles an hour, you can just bail twenty.

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Speaker 1: This one goes twenty.

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Speaker 2: Okay. Can you be like, yes, you could build that

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Speaker 2: is like a bike. It's like a bike when you're

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Speaker 2: going kind of fast. Okay, it's ready. I've built this thing.

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Speaker 2: I'm gonna take it for a drive. Problem won't fit

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Speaker 2: out the door. It's like a ship in a bottle.

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Speaker 2: So he takes an axe and knocks the bricks out

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Speaker 2: of the wall so he could get the car out.

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Speaker 2: And it works. It's loud, it scares the horses, but

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Speaker 2: it's a car that he has built. I still got

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Speaker 2: this day job at the Edison Illuminating Company. Months after this,

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Speaker 2: he goes to a meeting in New York and meets

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Speaker 2: the man himself. Meets Thomas Edison at a dinner young

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Speaker 2: Henry Ford, who is a nobody approximately, and Ford actually

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Speaker 2: talks to Edison. This is like great moments in business history,

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Speaker 2: you know, this meeting, and Edison at this point was

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Speaker 2: interested in electric cars. This is the time when it's

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Speaker 2: not clear or sort of what technology is going to win.

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Speaker 2: But Edison is very encouraging. Ford sketches a design of

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Speaker 2: I guess the engine or the car on the back

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Speaker 2: of a menu. Had to be clear.

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Speaker 1: Everyone probably came up to Thomas Edison at this time

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Speaker 1: and say I got an invention. They got to do

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Speaker 1: the thing.

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Speaker 2: But Edison, to his credit, was really encouraging to Ford.

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Speaker 2: It wasn't go away, kid, you bother me. It wasn't

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Speaker 2: I'm working on electric and that's gonna win. Edison, according

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Speaker 2: to Ford, said you have the thing, keep at it,

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Speaker 2: and this was huge for Ford.

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Speaker 1: Well. Famously, Edison became sort of Ford's mentor his dream,

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Speaker 1: and Ford Wood would eventually create a replica of Edison's

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Speaker 1: laboratory in Michigan that people could visit. Have you been there,

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Speaker 1: I have been there. It's like it's flawless, and in

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Speaker 1: fact Edison himself saw it and said it's perfect, except

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Speaker 1: it's too clean.

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Speaker 2: Grease it up, Henry.

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Speaker 1: Yeah.

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Speaker 2: They would go on these road trips every year. That

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Speaker 2: became famous with Firestone, I guess the tire of the

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Speaker 2: rubber Magne. Like one time a president came and joined

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Speaker 2: them on their road trip. It was partly marketing for cars.

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Speaker 2: Really interesting relationship and interesting to think about them as innovators.

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Speaker 2: Edison and we did this series about all the different

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Speaker 2: things Edison did. Edison could not stay on one idea,

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Speaker 2: you know. He invented the phonograph and then just bailed,

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Speaker 2: didn't even make one to sell. He was on to

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Speaker 2: the next thing.

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Speaker 1: He wouldn't spend a year in.

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Speaker 2: A garage, He wouldn't building one thing. He wouldn't spend

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Speaker 2: a month building one thing. He was always building a

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Speaker 2: million things. Ford, as we're gonna hear, he's always into cars,

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Speaker 2: and he will build one car famously for fifteen years,

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Speaker 2: will be his great thing. So who's the hedgehog and

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Speaker 2: who's the Fox? I always get confused. Fox must be

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Speaker 2: many different things, right, Fox's Edison? Forda's hedgehog knows one thing.

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Speaker 1: Yeah.

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Speaker 2: So Ford is inspired by this meeting with Edison, goes

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Speaker 2: back to Detroit and ends up not long after that,

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Speaker 2: quitting his day job at the Edison Illuminating Company, and

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Speaker 2: on August fifteenth, eighteen ninety nine, Henry Ford creates the

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Speaker 2: Detroit Motor Company.

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Speaker 1: Now there are at this time a number of people

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Speaker 1: building cars in Detroit. It's not just that Henry Ford

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Speaker 1: happened to grow up close by Detroit that Detroit became famous.

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Speaker 2: So this is an interesting subject. This is functionally why

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Speaker 2: did Detroit become the car capital of the world in

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Speaker 2: the twentieth century.

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Speaker 1: It's like our Silicon Valley question.

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Speaker 2: It is, and it definitely seems contingent. So if we

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Speaker 2: step back a little bit, there are hundreds of car

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Speaker 2: companies at this time. You know, we think of a

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Speaker 2: car company as this giant economy of scale thing that

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Speaker 2: hasn't been invented yet. That's what Ford is going to

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Speaker 2: invent later in this episode. At this time, the car

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Speaker 2: company is a few guys in a shop building one

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Speaker 2: car at a time, and it costs a lot of money.

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Speaker 2: And around the Midwest, in particular, across the industrial heartland

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Speaker 2: really like in Massachusetts as well, but a lot around

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Speaker 2: the Great Lakes, like in Cleveland, other places, there are

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Speaker 2: little car companies and there's a few reasons for that.

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Speaker 2: The Midwest, the Upper Midwest has become this kind of

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Speaker 2: industrial heartland.

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Speaker 1: Part of it because of the Erie Canal. It's all

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Speaker 1: connected to the ocean and to New York, and it's

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Speaker 1: connected to coal which can come into the Midwest and

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Speaker 1: iron ore.

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Speaker 2: And there is this interesting history of work on agricultural machinery,

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Speaker 2: like we talked about at the beginning, building stuff for

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Speaker 2: local farmers to use as simple machines on their farm.

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Speaker 2: So it was very likely that the capital of the

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Speaker 2: car industry was going to be in the Upper Midwest somewhere.

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Speaker 2: I don't think it had to be Detroit. You have

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Speaker 2: Ford there around this time, basically because he grew up nearby.

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Speaker 2: David Dunbar Buick starts Buick in Flint, Michigan, which is nearby.

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Speaker 2: You have Ransom Olds whose mobile oldsmobile things started nearby

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Speaker 2: and moved to Detroit. And so partly because in a

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Speaker 2: general way it was probably going to be somewhere around there,

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Speaker 2: but in a more specific way, kind of because of happenstance,

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Speaker 2: you get this incredible agglomeration.

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Speaker 1: But as you're listening to these names, people shouldn't think

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Speaker 1: that there are factories littering the lands.

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Speaker 2: Guy in a garage.

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Speaker 1: Yeah, it's a bunch of small teams working on.

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Speaker 2: Often making you know, dozens of cars. So Ford gets

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Speaker 2: into this game. He starts the Detroit Motor Company, notably

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Speaker 2: is not the Ford Motor Company, the one we know.

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Speaker 2: In fact, the Detroit Motor Company is the first of

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Speaker 2: two failures he's going to help before he succeeds, maybe

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Speaker 2: one and a half, depending on how you count it.

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Speaker 2: It is a few guys in a shop making cars,

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Speaker 2: one at a time. And the way they make cars

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Speaker 2: is they order parts from other little shops and the

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Speaker 2: parts are not uniform size. Each part is a little

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Speaker 2: different from every other part. They're largely handmade. And so

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Speaker 2: you take a part you're building a car. It doesn't

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Speaker 2: quite fit, and so you have in fact, the guys

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Speaker 2: doing this are called fitters, because the things don't fit,

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Speaker 2: and so they might machine it a little, they might

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Speaker 2: file it a little, and they put it on. They

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Speaker 2: get it to fit, and they put it on. And

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Speaker 2: this is artisanal work. This is a skill, kind of

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Speaker 2: an art. Each car is different, Each car is a

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Speaker 2: little different, and in fact, people would order be spoke cars.

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Speaker 2: They say, like I want it like this and like this,

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Speaker 2: and you could do that because you're building the cars

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Speaker 2: one by one. But of course this makes them expensive.

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Speaker 2: You got highly skilled artisans building cars one by one.

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Speaker 1: This is an.

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Speaker 2: Expensive fine tool. And it might be an industrial machine

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Speaker 2: that is useful for a business and can pay the

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Speaker 2: high price. It might be a toy for a rich guy.

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Speaker 2: It is definitely not something for the masses. And so

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Speaker 2: Ford's Detroit Motor Company is building an industrial machine. It's

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Speaker 2: building a delivery wagon. It's kind of like a box

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Speaker 2: of cube on wheels, very square, has a tiller to

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Speaker 2: steer in the back, or it just goes, you know,

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Speaker 2: I think it comes like like I like if you're

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Speaker 2: sitting in the driver's seat. It comes from the back

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Speaker 2: and you hold it like if you're on a boat,

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Speaker 2: on a little boat.

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Speaker 1: YEA.

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Speaker 2: For to not stop tinkering with this delivery wagon to

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Speaker 2: the point where the guys funding the company are like,

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Speaker 2: come on, let's start selling something. You know, if it

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Speaker 2: was today, they'd be like minimum viable product, Yeah, ship it,

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Speaker 2: And for it is like almost almost.

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Speaker 1: There's even this amazing moment.

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Speaker 2: When the funders come to the factory and he has

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Speaker 2: the workers actually machine a bunch of parts so that

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Speaker 2: it looks like they're in production, but they're not. He's

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Speaker 2: just fooling the funders. And eventually the funders catch on,

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Speaker 2: let's be both putting up the money for this, and

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Speaker 2: they get tired of it and they say, that's it.

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Speaker 2: Let's just dissolve the company. Let's give up. There's no product.

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Speaker 2: The Detroit Motor Company ceases to exist.

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Speaker 1: Wow. Because of his perfectionism.

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Speaker 2: And this is in a way a classic mistake, right,

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Speaker 2: not getting to market fast enough, running out of money

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Speaker 2: before or you get to market. So that's failure Number one.

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Speaker 2: Cars are still a big deal. Ford still loves cars,

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Speaker 2: wants to get back in the game. But all he's

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Speaker 2: done is waste a bunch of money and not actually

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Speaker 2: sell a car. So the way he decides to get

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Speaker 2: back in the game is to restore his name by

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Speaker 2: winning a car race.

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Speaker 1: Wow.

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Speaker 2: Yeah, yeah, so there's this car race.

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Speaker 1: Clear, he doesn't have a lot of experienced race I

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Speaker 1: guess nobody has experienced racing, just admitted cars he's built there.

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Speaker 1: He's built a few sort of you know, prototype cars.

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Speaker 2: But yeah, that first, I think the first car race

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Speaker 2: in the history of Michigan is about to happen, and

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Speaker 2: he's like, yes, I'm going to enter this race, and

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Speaker 2: if I win, then I'll be famous again and I'll

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Speaker 2: get money and start another car.

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Speaker 1: So he builds this.

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Speaker 2: Little race car. So now I look at it and

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Speaker 2: I think of a cricket. It's made of wood, it's

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Speaker 2: painted green. There's no doors, no windshield. The driver sits

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Speaker 2: up on this little padded perch. There's a steering where

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Speaker 2: by this time not a tiller is made of brass.

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Speaker 2: Ford's going to be the driver.

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Speaker 1: Does he paint Ford on the side? Don't know. Good question,

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Speaker 1: because that would be the first racing advertising, right pens oil, Yeah, right,

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Speaker 1: he doesn't.

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Speaker 2: He paints like Murray's Cheese Shop or whatever. Who's actually Penguin. No,

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Speaker 2: I don't know what he paints on it. Shout out

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Speaker 2: Murray's Cheese Shop. Great detail about the way race cars

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Speaker 2: worked at this time. There is a second guy who

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Speaker 2: stands on the running board on the side of the

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Speaker 2: car and a like leans out to the side, kind

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Speaker 2: of like they do on sailboats, you know, on a

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Speaker 2: catamaran keep it from sliding out on the turns. So

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Speaker 2: day of the race comes October tenth, nineteen oh one.

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Speaker 1: It's a huge deal.

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Speaker 2: They're running special trains out to the race track, and

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Speaker 2: you know, there's still all different kinds of cars. There's

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Speaker 2: a steam car race and an electric car race. Although

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Speaker 2: in the electric car race apparently the top speed was

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Speaker 2: fifteen miles an hour and the drivers talk to each

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Speaker 2: other as they were going. Electric cars quiet, yeah, but

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Speaker 2: it didn't quite work out then. But the interro combustion

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Speaker 2: engine car is the main event. It's the fastest one,

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Speaker 2: and a bunch of drivers drop out just before the

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Speaker 2: race starts. Cars are hard to build. They don't work

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Speaker 2: very well still, and in the end there's only two

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Speaker 2: cars in the race. One Henry Ford's car, the other

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Speaker 2: one built by a guy named Alexander Winton. Winton was

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Speaker 2: from Cleveland, Ohio, also built cars now they're kind of

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Speaker 2: great Lakes car builder. And he was famous because he'd

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Speaker 2: recently set the world speed record for the mile one

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Speaker 2: minute and fourteen seconds, not quite sixty miles an hour.

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Speaker 2: It's like that's fast a lot fast, yeah, n one,

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Speaker 2: So when's the heavy favorite world record holder? But Ford is,

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Speaker 2: you know, hometown boy, Detroit's own Henry Ford and the

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Speaker 2: race starts and Winton zooms out to a big lead,

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Speaker 2: but after a few.

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Speaker 1: Laps, one to the lad here comes Outrea Ford.

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Speaker 2: Wind's engine starts smoking. We got smoke coming off the track,

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Speaker 2: and Ford blows past him. The crowd goes wild. Lady screams,

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Speaker 2: if I had fifty dollars, I'd bet it on Ford.

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Speaker 2: Another guy throws down his hat and stomps on it,

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Speaker 2: which was a thing at the time.

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Speaker 1: People. I always I don't know if this movies are what,

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Speaker 1: but I always hear about people taking their hats off,

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Speaker 1: throwing it down and stomping on it.

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Speaker 2: So I guess it was like a culturally sanctioned It

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Speaker 2: was like a high five or something, like a thing

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Speaker 2: you did if you got really excited.

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Speaker 1: Yeah, that guy must be really excited. That's an expensive

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Speaker 1: hat and he's stomping on it.

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Speaker 2: Ford wins, Woo, He's in all the papers. He's a

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Speaker 2: local hero and his publicity stunt works investors do, in

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Speaker 2: fact want to give him money, and the month after

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Speaker 2: he wins the race, he creates the Henry Ford Company.

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Speaker 2: So this time the problem is he's got the racing bug.

402
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Speaker 2: All he wants to do is build another.

403
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Speaker 1: Race car should have done the delivery van.

404
00:19:55,320 --> 00:19:57,240
Speaker 2: He should have done a delivery van seems like a

405
00:19:57,240 --> 00:20:00,080
Speaker 2: good idea sweet and building a race car is out

406
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Speaker 2: of business, and so just three months after that company

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Speaker 2: is founded, Henry Ford gets pushed out of the Henry

408
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Speaker 2: Ford Company and so that is a failure for Ford.

409
00:20:10,440 --> 00:20:14,040
Speaker 2: But the investor keep the company going and a little

410
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Speaker 2: while later they rename it after the founder of Detroit

411
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Speaker 2: Antoine de la Mouth Cadillac.

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Speaker 1: Cadillac Cadillac Daddy.

413
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Speaker 2: They start building cars, and as we will talk about

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Speaker 2: in our next episode about GM, they get bought by GM.

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Speaker 1: In nineteen oh nine.

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Speaker 2: Henry Ford is out of a job again and so

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Speaker 2: he's got to move now. He builds a race car,

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Speaker 2: wins another race, gets more money, and in nineteen oh

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Speaker 2: three he founds the Ford Motor Company, the one.

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Speaker 1: The same company we see today.

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Speaker 2: Yes, yes, Ford aka Ford And now Ford wants to

422
00:20:52,320 --> 00:20:54,600
Speaker 2: try something new. And I don't know exactly why. You

423
00:20:54,600 --> 00:20:57,359
Speaker 2: were asking me why now, and I couldn't exactly figure

424
00:20:57,359 --> 00:21:00,320
Speaker 2: out why now, but we can talk about it. He

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00:21:00,400 --> 00:21:07,280
Speaker 2: wants to build a standardized, simple, cheap car for the masses. Really,

426
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Speaker 2: something that would have been for him for his family

427
00:21:09,920 --> 00:21:11,720
Speaker 2: when he was a farm kid who thought there was

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00:21:11,720 --> 00:21:14,200
Speaker 2: altogether too much manual labor on the farm.

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Speaker 1: And he thinks.

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Speaker 2: About it as a business proposition as well. Right here

431
00:21:19,359 --> 00:21:22,159
Speaker 2: read this, there's this great quote from Ford about.

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Speaker 1: This, there are a lot more poor people than wealthy people.

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Speaker 1: We'll just build one car for the poor people. And

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Speaker 1: you know, you could see like, oh, maybe it's principled

435
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Speaker 1: or something, but you know, I kind of think with

436
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Speaker 1: all of these hundreds of car manufacturers, and he's been

437
00:21:34,840 --> 00:21:37,280
Speaker 1: in the racing world and everything, maybe he just sees

438
00:21:37,560 --> 00:21:40,919
Speaker 1: that it's a market opportunity. There's too much competition building

439
00:21:41,000 --> 00:21:43,960
Speaker 1: the race cars and building the rich man's car for sure.

440
00:21:44,040 --> 00:21:48,159
Speaker 2: That and as we'll talk about more really both today

441
00:21:48,200 --> 00:21:52,600
Speaker 2: and in the next episode, it does suit him as

442
00:21:52,640 --> 00:21:56,399
Speaker 2: a person, like, you're right, it is a good business opportunity, incredible,

443
00:21:57,160 --> 00:22:01,479
Speaker 2: But also Henry Ford does have this value system that

444
00:22:01,600 --> 00:22:04,879
Speaker 2: is I think it is almost Victorian. It's very practical

445
00:22:04,960 --> 00:22:07,919
Speaker 2: and simple and direct. That certainly is who he is

446
00:22:07,960 --> 00:22:10,840
Speaker 2: in many ways. And this idea of one simple car

447
00:22:10,880 --> 00:22:12,960
Speaker 2: for everybody is a great fit.

448
00:22:12,840 --> 00:22:13,520
Speaker 1: With who he is.

449
00:22:14,359 --> 00:22:16,720
Speaker 2: But it's hard to do. It's obviously a good idea

450
00:22:16,760 --> 00:22:19,160
Speaker 2: he's probably not the only one who thought about it.

451
00:22:19,080 --> 00:22:20,959
Speaker 1: And he's not the best person for the job at

452
00:22:20,960 --> 00:22:23,199
Speaker 1: this point because he's a man who can't deliver, a

453
00:22:23,240 --> 00:22:24,440
Speaker 1: man who wants perfection.

454
00:22:24,840 --> 00:22:27,560
Speaker 2: He has failed. He has literally failed time and again.

455
00:22:28,080 --> 00:22:31,680
Speaker 2: And to succeed, he's not just gonna have to build

456
00:22:31,680 --> 00:22:33,480
Speaker 2: a car. He's gonna have to invent a whole new

457
00:22:33,600 --> 00:22:35,000
Speaker 2: kind of manufacturing.

458
00:22:35,480 --> 00:23:24,800
Speaker 3: That is what we're going to talk about in a minute.

459
00:23:02,400 --> 00:23:04,960
Speaker 2: And we're back. The Ford Motor Company is a thing

460
00:23:04,960 --> 00:23:07,840
Speaker 2: in the world. Henry Ford isn't going to squander this one.

461
00:23:07,960 --> 00:23:08,520
Speaker 2: As we know.

462
00:23:08,840 --> 00:23:10,360
Speaker 1: He has a whole team of people try to come

463
00:23:10,400 --> 00:23:12,320
Speaker 1: up with a catchy name for his first car, and

464
00:23:12,359 --> 00:23:15,000
Speaker 1: they call it the Model A. Brilliant.

465
00:23:15,440 --> 00:23:17,040
Speaker 2: We got to get all the way to t but

466
00:23:17,080 --> 00:23:18,400
Speaker 2: we're not going to talk about everyone.

467
00:23:18,480 --> 00:23:18,920
Speaker 1: Don't worry.

468
00:23:19,720 --> 00:23:23,359
Speaker 2: The Model A costs eight hundred dollars for a two seater,

469
00:23:23,480 --> 00:23:27,040
Speaker 2: nine hundred for a four seater, which is something like

470
00:23:27,320 --> 00:23:29,600
Speaker 2: twice what a typical worker makes.

471
00:23:29,359 --> 00:23:29,760
Speaker 1: In a year.

472
00:23:29,840 --> 00:23:32,359
Speaker 2: So today what is medium wage day, like sixty thousand,

473
00:23:32,359 --> 00:23:34,399
Speaker 2: so that'd be like one hundred and twenty thousand today.

474
00:23:34,920 --> 00:23:39,720
Speaker 2: Obviously not a car for the masses, but cheap enough

475
00:23:39,760 --> 00:23:41,679
Speaker 2: that there is a market for it, cheap enough that

476
00:23:41,720 --> 00:23:44,240
Speaker 2: it is a car you can build and profitably sell.

477
00:23:44,760 --> 00:23:47,440
Speaker 2: And Ford knows all this. He knows it's too expensive.

478
00:23:47,880 --> 00:23:50,600
Speaker 2: And the key problem really is that the Model A

479
00:23:50,880 --> 00:23:54,720
Speaker 2: is still built a lot like the cars that have

480
00:23:54,760 --> 00:23:57,760
Speaker 2: been built for you know, a decade for it's buying

481
00:23:57,760 --> 00:23:59,399
Speaker 2: most of the parts from other companies. And at the

482
00:23:59,440 --> 00:24:02,800
Speaker 2: factory you'd see like fifteen different stations set up around

483
00:24:02,800 --> 00:24:03,640
Speaker 2: the floor.

484
00:24:03,520 --> 00:24:04,760
Speaker 1: And a crowd of people around them.

485
00:24:04,800 --> 00:24:06,840
Speaker 2: Imagine right, like there's a team at each one, you know,

486
00:24:07,640 --> 00:24:09,360
Speaker 2: fitting parts one by one.

487
00:24:09,480 --> 00:24:11,959
Speaker 1: They're like, oh, we need a door. Somebody walks over

488
00:24:12,200 --> 00:24:14,639
Speaker 1: to the door, pile brings it back. Yeah, I guess so.

489
00:24:15,119 --> 00:24:18,120
Speaker 2: And you know, it's obvious that this is expensive. Slightly

490
00:24:18,200 --> 00:24:21,239
Speaker 2: less obvious, but quite interesting and important is there is

491
00:24:21,280 --> 00:24:24,560
Speaker 2: no economy of scale. If you want to build ten

492
00:24:24,600 --> 00:24:26,959
Speaker 2: times as many cars, you basically have to have ten

493
00:24:27,040 --> 00:24:30,000
Speaker 2: times as many workers gathered around ten times as many cars.

494
00:24:30,240 --> 00:24:32,800
Speaker 2: The marginal car does not get a lot cheaper here.

495
00:24:33,920 --> 00:24:37,040
Speaker 2: And this fundamentally is the problem that Ford is setting

496
00:24:37,080 --> 00:24:40,280
Speaker 2: out to solve. He's selling cars now the Model A works,

497
00:24:41,040 --> 00:24:43,600
Speaker 2: and he's taken all the money plowing it back into

498
00:24:43,640 --> 00:24:46,879
Speaker 2: the company, trying to get more efficient, which reminds me

499
00:24:46,920 --> 00:24:49,160
Speaker 2: a little bit of Amazon. There's that Amazon era where

500
00:24:49,160 --> 00:24:52,000
Speaker 2: they're doing that. He's coming up with new models, new

501
00:24:52,040 --> 00:24:55,200
Speaker 2: ways to build cars. And there's a really interesting book

502
00:24:55,320 --> 00:24:57,760
Speaker 2: about a lot of this that was interesting to me

503
00:24:57,800 --> 00:24:59,360
Speaker 2: in the context of working on the show. It's called

504
00:24:59,359 --> 00:25:03,320
Speaker 2: from the American System to Mass Production by a historian

505
00:25:03,400 --> 00:25:06,600
Speaker 2: named David Houndshell. He talks about this time and he

506
00:25:06,600 --> 00:25:08,840
Speaker 2: says the Ford Motor Company did not want to make

507
00:25:08,920 --> 00:25:12,119
Speaker 2: money as much as it wanted to build cars, and

508
00:25:12,160 --> 00:25:14,840
Speaker 2: Reford love to tinker, and now what he's tinkering with

509
00:25:15,160 --> 00:25:18,520
Speaker 2: is how to make a cheaper car. By the time

510
00:25:18,520 --> 00:25:21,640
Speaker 2: they get to the model N Well on our way,

511
00:25:22,760 --> 00:25:26,840
Speaker 2: he's really into this idea of interchangeable parts, which Hounschel

512
00:25:26,880 --> 00:25:28,080
Speaker 2: actually writes a lot about.

513
00:25:28,040 --> 00:25:31,000
Speaker 1: This in this history book. It seems obvious now, but

514
00:25:31,320 --> 00:25:33,800
Speaker 1: there was an actual invention of this. Is right when

515
00:25:33,880 --> 00:25:36,760
Speaker 1: gun manufacturers, i think it started with, started to say, oh,

516
00:25:36,840 --> 00:25:40,920
Speaker 1: if you could somehow build parts that were identical enough

517
00:25:40,920 --> 00:25:42,800
Speaker 1: that you could swap parts of a gun or a rifle.

518
00:25:42,960 --> 00:25:46,440
Speaker 2: Yes, yes, So before that it wasn't even an idea,

519
00:25:46,560 --> 00:25:50,720
Speaker 2: right The idea that you could take one part and

520
00:25:50,760 --> 00:25:53,760
Speaker 2: it would fit in every single gun was not a thing.

521
00:25:53,800 --> 00:25:56,639
Speaker 2: You built guns one by one, and it in fact

522
00:25:56,680 --> 00:25:59,000
Speaker 2: took a long time. It took in some ways one

523
00:25:59,040 --> 00:26:01,800
Speaker 2: hundred years of people figuring it out and developing new techniques.

524
00:26:01,800 --> 00:26:05,920
Speaker 2: It's actually quite hard to make everything exactly the same.

525
00:26:06,000 --> 00:26:07,760
Speaker 1: And I think we'll do a future show on this, right,

526
00:26:07,800 --> 00:26:10,920
Speaker 1: Eli Whitney, Samuel Colt, the whole.

527
00:26:10,760 --> 00:26:14,760
Speaker 2: Gun, Ringfield Armory. The US government funded a lot of this. Yes,

528
00:26:14,840 --> 00:26:16,879
Speaker 2: we will come back to it. Put it on the list.

529
00:26:17,480 --> 00:26:18,000
Speaker 1: On the list.

530
00:26:18,480 --> 00:26:22,720
Speaker 2: So Ford gets interchangeable parts, religion, pushes it onto a suppliers,

531
00:26:22,760 --> 00:26:25,639
Speaker 2: makes them all work to the same gauge. So I

532
00:26:25,640 --> 00:26:26,879
Speaker 2: don't know what the tolerance was.

533
00:26:26,920 --> 00:26:29,040
Speaker 1: A quarter inch is a quarter inch for everybody? Or

534
00:26:29,119 --> 00:26:31,280
Speaker 1: was not six sigma at this point, maybe one or

535
00:26:31,280 --> 00:26:31,800
Speaker 1: two sigma.

536
00:26:31,920 --> 00:26:33,960
Speaker 2: And he brings more manufacturing in house so that he

537
00:26:34,000 --> 00:26:38,199
Speaker 2: can have more quality control. And just to put a

538
00:26:38,240 --> 00:26:43,320
Speaker 2: point on what a big new idea interchangeable parts was

539
00:26:43,520 --> 00:26:47,320
Speaker 2: or were at this point. Ford in fact runs an

540
00:26:47,400 --> 00:26:49,760
Speaker 2: ad in a trade journal to brag about it.

541
00:26:50,240 --> 00:26:53,600
Speaker 1: We are making forty thousand cylinders, ten thousand engines, forty

542
00:26:53,640 --> 00:26:57,600
Speaker 1: thousand wheels, twenty thousand axles, ten thousand bodies, ten thousand

543
00:26:57,640 --> 00:27:02,240
Speaker 1: of every part that goes into the car, all exactly alike.

544
00:27:02,400 --> 00:27:05,280
Speaker 1: How is it done? I love that. That's an ad.

545
00:27:05,480 --> 00:27:08,240
Speaker 1: It's not we're different, it's you don't understand we're doing

546
00:27:08,280 --> 00:27:11,600
Speaker 1: something harder than being different. We're being exactly the same.

547
00:27:12,160 --> 00:27:16,560
Speaker 2: Think same. And now we get to the Model T.

548
00:27:17,080 --> 00:27:19,359
Speaker 2: In nineteen oh nine, the Model T comes out, the

549
00:27:19,400 --> 00:27:22,359
Speaker 2: Model T is going to be the thing that changes everything,

550
00:27:22,440 --> 00:27:23,960
Speaker 2: is going to be the best selling car in the

551
00:27:24,000 --> 00:27:27,320
Speaker 2: world for what sixtieth years until it gets beat by

552
00:27:27,359 --> 00:27:31,120
Speaker 2: the Beatle, which we talked about. But in nineteen oh nine,

553
00:27:31,680 --> 00:27:33,919
Speaker 2: the Model T isn't all the way there yet. It

554
00:27:34,000 --> 00:27:36,879
Speaker 2: costs nine hundred and fifty dollars about what the Model

555
00:27:36,920 --> 00:27:40,760
Speaker 2: A cost, still too expensive to be Henry Ford's dream car,

556
00:27:40,920 --> 00:27:44,200
Speaker 2: but he's still obsessed with tinkering his way to a

557
00:27:44,280 --> 00:27:49,200
Speaker 2: cheaper car. And now with interchangeable parts, somebody at Ford

558
00:27:49,200 --> 00:27:51,919
Speaker 2: realizes like, oh, we don't have to stay with that

559
00:27:52,119 --> 00:27:55,480
Speaker 2: same system where it's a team of guys building the

560
00:27:55,520 --> 00:27:58,600
Speaker 2: whole car with the fitters. With the fitters, we can

561
00:27:58,680 --> 00:28:01,720
Speaker 2: have each guy's job be to put on one part.

562
00:28:01,920 --> 00:28:04,960
Speaker 2: So one guy puts on the carburetor on one car,

563
00:28:05,040 --> 00:28:06,880
Speaker 2: and then he goes to the next stand where there's

564
00:28:06,880 --> 00:28:08,520
Speaker 2: another car, and he puts on the carburetor there.

565
00:28:08,680 --> 00:28:11,119
Speaker 1: And if you've ever done any sort of repetitive movement,

566
00:28:11,160 --> 00:28:13,840
Speaker 1: you know you get and faster at it becomes muscle memory.

567
00:28:13,920 --> 00:28:16,800
Speaker 2: So they get more efficient out of this. And I

568
00:28:16,800 --> 00:28:20,840
Speaker 2: should mention that Ransom Olds the Oldsmobile guy love that

569
00:28:21,640 --> 00:28:24,280
Speaker 2: I had done kind of a less refined version of

570
00:28:24,320 --> 00:28:27,639
Speaker 2: this a few years before, this idea of workers moving

571
00:28:27,680 --> 00:28:30,280
Speaker 2: from car to car, but Ford is about to push

572
00:28:30,320 --> 00:28:33,840
Speaker 2: it way further. They notice that going from car to

573
00:28:33,960 --> 00:28:36,560
Speaker 2: car takes a little bit of time, and more importantly,

574
00:28:37,240 --> 00:28:40,280
Speaker 2: there are these traffic jams, if you will, among the workers,

575
00:28:40,320 --> 00:28:42,800
Speaker 2: where the fast worker catches up to the next car,

576
00:28:42,840 --> 00:28:45,920
Speaker 2: but the slow worker is still there. And that is inefficient.

577
00:28:46,840 --> 00:28:48,040
Speaker 2: And so now you know.

578
00:28:48,080 --> 00:28:50,560
Speaker 1: I'm rubbing my hands to gentlemen, the moment we've been

579
00:28:50,600 --> 00:28:51,080
Speaker 1: waiting for.

580
00:28:52,280 --> 00:28:55,200
Speaker 2: They think, what if instead of having the guy move

581
00:28:55,320 --> 00:28:59,760
Speaker 2: to the car, we have the car move to the

582
00:28:59,800 --> 00:29:02,560
Speaker 2: guy to the assembly line.

583
00:29:03,120 --> 00:29:06,920
Speaker 1: The assembly line, And initially it's not the assembly line

584
00:29:06,960 --> 00:29:09,080
Speaker 1: you picture when you close your eyes and picture a

585
00:29:09,080 --> 00:29:09,719
Speaker 1: car assembly line.

586
00:29:09,880 --> 00:29:12,320
Speaker 2: It actually takes them. It takes them months to fear out.

587
00:29:12,320 --> 00:29:16,120
Speaker 2: They start with individual parts, and it's not exactly clear

588
00:29:16,280 --> 00:29:18,960
Speaker 2: who comes up with the idea or where it comes from,

589
00:29:19,120 --> 00:29:21,080
Speaker 2: but also like a lot of ideas, it kind of

590
00:29:21,120 --> 00:29:22,080
Speaker 2: comes from everywhere.

591
00:29:22,600 --> 00:29:24,400
Speaker 1: Like for sure, at least.

592
00:29:24,280 --> 00:29:26,520
Speaker 2: One guy for it had actually been to visit a

593
00:29:26,640 --> 00:29:29,880
Speaker 2: meat packing plant in Chicago where they would hang a

594
00:29:29,960 --> 00:29:32,480
Speaker 2: cow up I guess, on a hook and like push

595
00:29:32,520 --> 00:29:37,120
Speaker 2: it around the plant and it would get disassembled piece

596
00:29:37,160 --> 00:29:41,840
Speaker 2: by piece. It was a disassembly line, and brewers and millers,

597
00:29:42,320 --> 00:29:45,520
Speaker 2: we're doing things with moving the product around the factory.

598
00:29:46,200 --> 00:29:49,120
Speaker 2: And at Ford, as far as we can tell, the

599
00:29:49,160 --> 00:29:56,000
Speaker 2: first thing they tried like this was the magneto, which

600
00:29:56,400 --> 00:29:59,240
Speaker 2: he was a Marvel character, I guess, but is also

601
00:29:59,440 --> 00:30:02,400
Speaker 2: a thing that spins around to create an electrical current.

602
00:30:02,480 --> 00:30:04,240
Speaker 2: So a magneto is about as big around as a

603
00:30:04,280 --> 00:30:08,600
Speaker 2: dinner plate. And one day in nineteen thirteen, somebody thinks,

604
00:30:09,040 --> 00:30:12,400
Speaker 2: what if we put like a waist high counter down

605
00:30:12,440 --> 00:30:16,520
Speaker 2: through the area where the guys build the magnetos, And like,

606
00:30:16,600 --> 00:30:19,840
Speaker 2: the first guy puts a piece on the magneto and

607
00:30:20,000 --> 00:30:21,960
Speaker 2: passes it down to the second guy who puts on

608
00:30:22,000 --> 00:30:24,440
Speaker 2: the next piece and passes it down to the third

609
00:30:24,480 --> 00:30:27,320
Speaker 2: guy and they just slide it down like that. Previously

610
00:30:27,360 --> 00:30:30,520
Speaker 2: it had taken about twenty man minutes to put together

611
00:30:30,560 --> 00:30:34,600
Speaker 2: a magneto that first day. It took thirteen. And over

612
00:30:34,600 --> 00:30:36,440
Speaker 2: the next few months they kind of tweak the system.

613
00:30:36,480 --> 00:30:38,560
Speaker 2: They realize they can put the magneto on a continuous

614
00:30:38,680 --> 00:30:40,840
Speaker 2: chain that just kind of moves it along.

615
00:30:40,920 --> 00:30:45,040
Speaker 1: And they get it down to five man minutes from

616
00:30:45,080 --> 00:30:49,680
Speaker 1: twenty minutes to five. Now at this point, magnetos are

617
00:30:49,680 --> 00:30:51,960
Speaker 1: probably starting to build up. You're moving faster than the

618
00:30:52,000 --> 00:30:54,280
Speaker 1: other parts of the plant, right, because that's the thing is,

619
00:30:54,320 --> 00:30:56,560
Speaker 1: once you see it happen in one part of the car,

620
00:30:56,840 --> 00:30:58,360
Speaker 1: you're like, well, how do we get the rest of

621
00:30:58,360 --> 00:30:59,880
Speaker 1: the car to catch up with the magnetos. We're not

622
00:30:59,920 --> 00:31:01,840
Speaker 1: a magneto manufacturer.

623
00:31:01,520 --> 00:31:04,560
Speaker 2: So right, and this is the summer of nineteen thirteen.

624
00:31:04,600 --> 00:31:06,840
Speaker 2: It's one of those times that must just be so

625
00:31:07,000 --> 00:31:09,360
Speaker 2: exciting to be in the middle of because they they

626
00:31:09,440 --> 00:31:12,800
Speaker 2: realize this, and so now they do it for the

627
00:31:12,920 --> 00:31:17,520
Speaker 2: radiator and for the engine, and then later that year

628
00:31:17,920 --> 00:31:21,400
Speaker 2: the thing we think of as the car assembly line happens.

629
00:31:21,520 --> 00:31:23,880
Speaker 2: Final assembly. Right, They got all the parts. Now they're

630
00:31:23,920 --> 00:31:27,880
Speaker 2: going to put together the car, and early on they

631
00:31:27,920 --> 00:31:31,560
Speaker 2: do it in this way that is so delightfully clugy

632
00:31:31,720 --> 00:31:36,200
Speaker 2: or tinker or trial and airy or just simple Henry Ford. Simple.

633
00:31:36,400 --> 00:31:38,000
Speaker 2: They get to final assembly, and I remember they've been

634
00:31:38,040 --> 00:31:40,520
Speaker 2: doing cars like up on stands, and they think, okay,

635
00:31:40,560 --> 00:31:43,240
Speaker 2: what if at the beginning of final assembly we put

636
00:31:43,280 --> 00:31:45,800
Speaker 2: the whatever, the chassis, whatever basic thing we have, on

637
00:31:45,920 --> 00:31:46,640
Speaker 2: four wheels.

638
00:31:47,040 --> 00:31:47,960
Speaker 1: We do the wheels first.

639
00:31:48,000 --> 00:31:50,280
Speaker 2: We do the wheels first, and there are these teams

640
00:31:50,280 --> 00:31:53,280
Speaker 2: of guys spread out, and every so often the foreman

641
00:31:53,400 --> 00:31:56,000
Speaker 2: blows a whistle and the guys go over to these

642
00:31:56,360 --> 00:31:59,160
Speaker 2: you know, chassis with wheels, and they push it to

643
00:31:59,200 --> 00:32:01,480
Speaker 2: the next station, and they go back and they put

644
00:32:01,520 --> 00:32:03,520
Speaker 2: the next part on, and the foreman blows a whistle

645
00:32:03,800 --> 00:32:06,840
Speaker 2: and they push it again. It doesn't take them too

646
00:32:06,880 --> 00:32:08,760
Speaker 2: long to figure out, oh, we could use a chain

647
00:32:08,960 --> 00:32:13,160
Speaker 2: to pull this half built car through the factory and

648
00:32:13,200 --> 00:32:15,480
Speaker 2: the guys could just put the parts on the car

649
00:32:15,920 --> 00:32:16,680
Speaker 2: as they go by.

650
00:32:17,240 --> 00:32:18,880
Speaker 1: I just want to pause for a minute. It is

651
00:32:18,960 --> 00:32:26,520
Speaker 1: so beautiful. This is such a breakthrough in manufacturing, and

652
00:32:26,600 --> 00:32:29,840
Speaker 1: it happens in one time, in one place, and they

653
00:32:29,880 --> 00:32:34,520
Speaker 1: get to a point pretty quickly, where they have reduced

654
00:32:34,720 --> 00:32:39,520
Speaker 1: the time for final assembly from twelve man hours before

655
00:32:39,760 --> 00:32:43,680
Speaker 1: the assembly line to ninety three minutes an hour and

656
00:32:43,760 --> 00:32:45,760
Speaker 1: a half. Huge, Huge.

657
00:32:46,200 --> 00:32:49,040
Speaker 2: Now they are getting to this cheap car for the masses,

658
00:32:49,120 --> 00:32:52,840
Speaker 2: and four decides here that they're only going to make

659
00:32:52,920 --> 00:32:56,120
Speaker 2: one car, the Model T. Of course you can get

660
00:32:56,120 --> 00:32:57,840
Speaker 2: it with two seats or four. You can get a

661
00:32:57,840 --> 00:33:01,520
Speaker 2: little truck version, but it's basically building the same car.

662
00:33:01,400 --> 00:33:03,440
Speaker 1: Because you're obsessed with efficiency, Like, if you're going to

663
00:33:03,480 --> 00:33:06,600
Speaker 1: optimize for the Model T, then build more Model Ts.

664
00:33:06,800 --> 00:33:09,600
Speaker 2: And there is this famous quote that you have probably

665
00:33:09,640 --> 00:33:14,720
Speaker 2: heard from Henry Ford, anotherfficiency decision around this time. Any

666
00:33:14,760 --> 00:33:18,240
Speaker 2: customer can have a car painted any color that he wants,

667
00:33:18,760 --> 00:33:19,960
Speaker 2: so long as it is block.

668
00:33:21,120 --> 00:33:22,240
Speaker 1: Great Midwestern humor.

669
00:33:22,320 --> 00:33:26,840
Speaker 2: My grandfather told me that one actually so Now with

670
00:33:26,920 --> 00:33:30,560
Speaker 2: the assembly line and interchangeable parts and a single car

671
00:33:30,640 --> 00:33:35,240
Speaker 2: painted a single color, you can optimize everything in the factory.

672
00:33:35,680 --> 00:33:39,000
Speaker 2: You can build these spoke machines that do exactly what

673
00:33:39,080 --> 00:33:41,000
Speaker 2: you need for this one car. At this one stage,

674
00:33:41,080 --> 00:33:43,800
Speaker 2: there's a machine that puts twenty four holes into the

675
00:33:43,840 --> 00:33:47,240
Speaker 2: engine block at one time, coming in from three different directions.

676
00:33:47,560 --> 00:33:50,760
Speaker 2: They're building these gravity slides around the factory, which I

677
00:33:50,760 --> 00:33:53,360
Speaker 2: think are just like shoots. So like one part comes

678
00:33:53,360 --> 00:33:54,920
Speaker 2: off the assembly line and they put it in a

679
00:33:54,960 --> 00:33:56,480
Speaker 2: shoot and it goes down to.

680
00:33:56,480 --> 00:33:58,760
Speaker 1: Some other I want to think the magneto comes down

681
00:33:58,800 --> 00:34:01,920
Speaker 1: and just drops right into the car. That's like a.

682
00:34:01,920 --> 00:34:04,480
Speaker 2: Charlie Chaplin movie. I guess you know Chaplin is around

683
00:34:04,520 --> 00:34:07,640
Speaker 2: this time, right, I say, right, this bunny cartoon.

684
00:34:07,320 --> 00:34:10,280
Speaker 1: Well right, it became a cultural thing. This idea of

685
00:34:10,319 --> 00:34:13,840
Speaker 1: the factory and the official of it was delightful. It

686
00:34:13,880 --> 00:34:17,959
Speaker 1: was delightful in some ways, but it was not delightful

687
00:34:18,480 --> 00:34:20,080
Speaker 1: if you were the guy who used to have this

688
00:34:20,239 --> 00:34:25,000
Speaker 1: highly skilled artisan fitter job and we're now spending all

689
00:34:25,120 --> 00:34:29,359
Speaker 1: day turning one bolt one after another. You know who

690
00:34:29,400 --> 00:34:33,239
Speaker 1: would have hated that? Henry Ford. Henry Ford would not

691
00:34:33,280 --> 00:34:35,440
Speaker 1: have wanted to turn one bowl. No, he would have

692
00:34:35,480 --> 00:34:37,680
Speaker 1: slacked off. He would have gotten to build his car

693
00:34:37,719 --> 00:34:38,160
Speaker 1: out back.

694
00:34:38,280 --> 00:34:43,680
Speaker 2: Yeah, And so it is immediately apparent at Ford that

695
00:34:44,320 --> 00:34:48,960
Speaker 2: people now hate their jobs. Absenteeism is high, and turnover is.

696
00:34:48,920 --> 00:34:49,560
Speaker 1: Through the roof.

697
00:34:49,719 --> 00:34:54,000
Speaker 2: In nineteen thirteen, the year Ford makes this incredible breakthrough,

698
00:34:54,440 --> 00:34:57,720
Speaker 2: turnover at the company is three hundred and eighty percent

699
00:34:58,719 --> 00:35:00,479
Speaker 2: and I had to pause to sort of think about

700
00:35:00,480 --> 00:35:03,920
Speaker 2: what does that even mean. It means the typical worker

701
00:35:04,000 --> 00:35:07,759
Speaker 2: quits after something like three months, and of course new

702
00:35:07,760 --> 00:35:10,279
Speaker 2: workers have to be trained. And so Ford sees this,

703
00:35:10,560 --> 00:35:13,799
Speaker 2: and in early nineteen four ten he gets together in

704
00:35:13,880 --> 00:35:16,960
Speaker 2: a room with a bunch of his fellow executives at

705
00:35:16,960 --> 00:35:19,680
Speaker 2: the company to decide what to do about it. And

706
00:35:20,520 --> 00:35:22,799
Speaker 2: there's an obvious thing to do. If you want your

707
00:35:22,840 --> 00:35:25,359
Speaker 2: employees to stick around, pay them more money. Give them

708
00:35:25,400 --> 00:35:30,480
Speaker 2: more money. You and I have talked about.

709
00:35:28,920 --> 00:35:30,959
Speaker 1: People are always doing this. They're always like, I can't

710
00:35:30,960 --> 00:35:34,120
Speaker 1: find enough workers. You're like, no, you're not paying enough

711
00:35:34,280 --> 00:35:34,920
Speaker 1: to find workers.

712
00:35:34,960 --> 00:35:38,240
Speaker 2: So there's a trucker shortage or is there a trucker

713
00:35:38,920 --> 00:35:42,319
Speaker 2: truckers don't get paid enough problem. Yes, yes, you could

714
00:35:42,360 --> 00:35:44,960
Speaker 2: get more workers if you raise their pay, and you

715
00:35:44,960 --> 00:35:46,960
Speaker 2: can get better workers if you raise the pay. This

716
00:35:47,000 --> 00:35:49,239
Speaker 2: is clear to Ford and his fellow execs. And also

717
00:35:49,280 --> 00:35:51,719
Speaker 2: they're making more profits now, so they have more money

718
00:35:51,719 --> 00:35:52,600
Speaker 2: to go around.

719
00:35:52,440 --> 00:35:55,960
Speaker 1: Which is a classic thing. If you have efficiency gains

720
00:35:56,280 --> 00:35:59,080
Speaker 1: in your business or factory, that tends to mean you

721
00:35:59,080 --> 00:36:01,080
Speaker 1: can increase wages for the workers. And it has been

722
00:36:01,080 --> 00:36:03,880
Speaker 1: correlated through a lot of us history, not all of us.

723
00:36:04,040 --> 00:36:06,600
Speaker 2: Yes, this is the happy story of productivity gains is

724
00:36:06,640 --> 00:36:08,719
Speaker 2: they are broadly shared, and it is usually true, but

725
00:36:08,800 --> 00:36:12,400
Speaker 2: not always true. And so they're in this room for it.

726
00:36:12,440 --> 00:36:16,280
Speaker 2: In the execs and h somebody writes on a blackboard

727
00:36:16,280 --> 00:36:19,760
Speaker 2: I think it's Ford and writes the entry level wage

728
00:36:19,840 --> 00:36:23,040
Speaker 2: for factory workers at this time, which was two dollars

729
00:36:23,120 --> 00:36:28,040
Speaker 2: and thirty four cents per day, which was basically the

730
00:36:28,120 --> 00:36:32,000
Speaker 2: going rates in Detroit. So Ford's like, Okay, we're making

731
00:36:32,040 --> 00:36:34,319
Speaker 2: more money. We can give him raise. He writes three

732
00:36:34,400 --> 00:36:37,160
Speaker 2: dollars on the board. It'sok a thirty percent raise.

733
00:36:37,400 --> 00:36:37,680
Speaker 1: Start.

734
00:36:37,719 --> 00:36:39,759
Speaker 2: They do the math. There's still plenty of profit to

735
00:36:39,800 --> 00:36:43,720
Speaker 2: play with. So he starts going up three fifty four

736
00:36:44,840 --> 00:36:48,640
Speaker 2: four dollars and fifty cents a day, and a vice

737
00:36:48,680 --> 00:36:52,000
Speaker 2: president says mockingly to Ford when he writes for fifty,

738
00:36:52,440 --> 00:36:55,640
Speaker 2: I dare you to do five? And Ford writes five

739
00:36:56,280 --> 00:36:58,479
Speaker 2: and says, this is what.

740
00:36:58,400 --> 00:36:59,040
Speaker 1: We're going to do.

741
00:36:59,680 --> 00:37:03,640
Speaker 2: Overnight. We will more than double the entry level wage

742
00:37:03,640 --> 00:37:06,399
Speaker 2: for all of our workers. This is unheard of. It's

743
00:37:06,440 --> 00:37:09,319
Speaker 2: going to mean a transfer of ten million dollars in

744
00:37:09,360 --> 00:37:14,080
Speaker 2: expected profits to the workers and the world goes wild.

745
00:37:14,480 --> 00:37:17,200
Speaker 1: Yeah, you announced that change. Everyone in Detroit knows this

746
00:37:17,600 --> 00:37:18,760
Speaker 1: the day after, and.

747
00:37:18,640 --> 00:37:20,960
Speaker 2: Of course the workers love it. Right now, instead of

748
00:37:20,960 --> 00:37:25,600
Speaker 2: having this turnover problem, people are lining up in hopes

749
00:37:25,600 --> 00:37:27,200
Speaker 2: of getting a job at the Ford Motor.

750
00:37:27,239 --> 00:37:29,239
Speaker 1: I could imagine leave the other factories just to get

751
00:37:29,280 --> 00:37:31,400
Speaker 1: in line because you can double your wage. Amazing.

752
00:37:31,600 --> 00:37:35,200
Speaker 2: And what's interesting, it's very interesting to see how this

753
00:37:35,400 --> 00:37:38,719
Speaker 2: plays in the America of nineteen fourteen. This was a

754
00:37:38,760 --> 00:37:43,120
Speaker 2: time when you know, it's before the Russian Revolution, there

755
00:37:43,200 --> 00:37:48,120
Speaker 2: is rising socialism, and it's unclear how industrial capitalism is

756
00:37:48,160 --> 00:37:50,080
Speaker 2: going to develop or even whether it's going to keep

757
00:37:50,080 --> 00:37:50,920
Speaker 2: being capitalism.

758
00:37:51,320 --> 00:37:54,280
Speaker 1: And so my favorite response.

759
00:37:53,880 --> 00:37:58,000
Speaker 2: To Ford's five dollars day is from the editorial board

760
00:37:58,040 --> 00:37:59,160
Speaker 2: of the Wall Street Journal.

761
00:37:59,239 --> 00:38:01,160
Speaker 1: Weirdly enough, the same guys who are on the editorial

762
00:38:01,160 --> 00:38:04,680
Speaker 1: board today, the actual guy, actual guys, they're like two

763
00:38:04,760 --> 00:38:07,440
Speaker 1: hundred and fifty seven. No, no, But the attitude is

764
00:38:07,480 --> 00:38:09,759
Speaker 1: the same at the Wall Street Journal. I'll read this.

765
00:38:09,840 --> 00:38:14,719
Speaker 1: They write that Ford has committed economic blunders, if not crimes,

766
00:38:15,239 --> 00:38:17,880
Speaker 1: they may return to plague him in the industry he represents,

767
00:38:18,000 --> 00:38:21,040
Speaker 1: as well as organized society. They're saying, it's the end.

768
00:38:21,120 --> 00:38:23,480
Speaker 1: The end of the world they pay workers.

769
00:38:23,360 --> 00:38:27,120
Speaker 2: World that he is he is giving profits that should

770
00:38:27,280 --> 00:38:31,560
Speaker 2: rightly go to the owners of capital, He's giving them

771
00:38:31,560 --> 00:38:35,359
Speaker 2: to labor. So Henry Ford is this wealthy capitalist who

772
00:38:35,360 --> 00:38:39,839
Speaker 2: has made capitalists furious. And you know who loves for.

773
00:38:39,920 --> 00:38:43,239
Speaker 1: The capitalist at this moment, I'm guessing the communists, the communists,

774
00:38:43,280 --> 00:38:44,400
Speaker 1: the actual communist.

775
00:38:44,960 --> 00:38:47,440
Speaker 2: John Reid is a journalist who is going to go

776
00:38:47,480 --> 00:38:50,160
Speaker 2: on to co found the Communist Labor Party of America.

777
00:38:50,840 --> 00:38:53,839
Speaker 2: And he writes that this five dollars a day plan

778
00:38:54,600 --> 00:38:56,960
Speaker 2: that's giving millions of dollars in profits to the workers.

779
00:38:57,400 --> 00:39:01,160
Speaker 2: He writes that it may be a real menace to capitalism,

780
00:39:01,360 --> 00:39:04,879
Speaker 2: essentially the same view of the Wall Street Journal editorial board,

781
00:39:04,880 --> 00:39:06,160
Speaker 2: but he thinks it's a good idea.

782
00:39:06,320 --> 00:39:09,600
Speaker 1: I picture John Reid reading the Wall Street Journal and

783
00:39:09,640 --> 00:39:12,640
Speaker 1: being like, no, that's a good thing. The destruction of

784
00:39:12,680 --> 00:39:14,040
Speaker 1: capitalisms what I'm in for.

785
00:39:14,239 --> 00:39:18,080
Speaker 2: They agree on the probable outcome, and they're both wrong.

786
00:39:18,400 --> 00:39:23,239
Speaker 2: And you know later a communist or far left critique

787
00:39:23,520 --> 00:39:26,880
Speaker 2: of kind of the center left is its accommodation. If

788
00:39:26,920 --> 00:39:31,839
Speaker 2: you're giving workers better conditions under capitalism, you're just prolonging

789
00:39:31,880 --> 00:39:35,080
Speaker 2: capitalism and postponing the communist.

790
00:39:34,719 --> 00:39:35,959
Speaker 1: Revolution exactly right.

791
00:39:36,200 --> 00:39:39,480
Speaker 2: Worked so far. Five dollars day is a thing, but

792
00:39:39,560 --> 00:39:42,000
Speaker 2: you don't just have to be good at your job

793
00:39:42,160 --> 00:39:47,360
Speaker 2: to get the five dollars day. There are these wild

794
00:39:47,560 --> 00:39:52,279
Speaker 2: by our contemporary norm strings attached, and these strings are

795
00:39:52,320 --> 00:39:57,759
Speaker 2: pulled by Ford's sociological department. They have a sociological department

796
00:39:58,360 --> 00:40:02,880
Speaker 2: that is basically the the nanny corporation department, the corporate

797
00:40:02,880 --> 00:40:07,279
Speaker 2: big brother department. To qualify for the five dollar day,

798
00:40:07,320 --> 00:40:12,319
Speaker 2: you have to refrain from drinking too much alcohol. You're

799
00:40:12,320 --> 00:40:14,480
Speaker 2: not allowed to have borders in your house, you have

800
00:40:14,520 --> 00:40:18,200
Speaker 2: to regularly put money in a savings account, and in

801
00:40:18,840 --> 00:40:21,279
Speaker 2: what really was a progressive stance for the time, you

802
00:40:21,320 --> 00:40:23,360
Speaker 2: couldn't hit your wife or children.

803
00:40:23,600 --> 00:40:26,239
Speaker 1: And from Ford's perspective, I mean, this was Ford's personality,

804
00:40:26,280 --> 00:40:28,640
Speaker 1: but it was also these are all things that can

805
00:40:28,680 --> 00:40:32,360
Speaker 1: interfere with you speeding up the production line.

806
00:40:32,440 --> 00:40:35,640
Speaker 2: There is that. And in the same way that when

807
00:40:35,640 --> 00:40:37,959
Speaker 2: we talked about the idea of the model t being

808
00:40:38,000 --> 00:40:41,319
Speaker 2: both a good business idea and reflective of who Ford was,

809
00:40:42,480 --> 00:40:46,120
Speaker 2: I do think he also had these very I guess

810
00:40:46,120 --> 00:40:49,520
Speaker 2: we would call them traditional values that are manifested here.

811
00:40:49,840 --> 00:40:52,239
Speaker 2: And in fact he believed in them so strongly that

812
00:40:52,280 --> 00:40:54,880
Speaker 2: it wasn't just you know that you had to sign

813
00:40:54,920 --> 00:40:57,160
Speaker 2: something agreeing to do this to go to work at Ford.

814
00:40:57,760 --> 00:41:02,520
Speaker 2: Ford actually sent inspectors to workers' houses to make sure

815
00:41:02,600 --> 00:41:05,839
Speaker 2: they were living the way Forward thought they should live.

816
00:41:06,239 --> 00:41:09,040
Speaker 2: And this wasn't like a secret. Ford was proud of it.

817
00:41:09,920 --> 00:41:13,080
Speaker 2: There's this magazine story that captures the back and forth,

818
00:41:13,120 --> 00:41:16,600
Speaker 2: and it has that ring of old magazine stories where

819
00:41:16,640 --> 00:41:19,080
Speaker 2: it's like, did this really happen or not? But clearly

820
00:41:19,160 --> 00:41:22,279
Speaker 2: it's some version of what was going on. So in

821
00:41:22,320 --> 00:41:25,319
Speaker 2: this magazine story, there is a dialogue between a Ford

822
00:41:25,400 --> 00:41:29,319
Speaker 2: inspector and the wife of a Forward worker when the

823
00:41:29,320 --> 00:41:31,960
Speaker 2: inspector goes to their house. So let's do the dialogue.

824
00:41:31,960 --> 00:41:33,400
Speaker 2: Do you want to be the inspector of the wife?

825
00:41:33,480 --> 00:41:34,000
Speaker 1: Inspector?

826
00:41:34,680 --> 00:41:35,719
Speaker 2: Okay, So it starts with you.

827
00:41:36,600 --> 00:41:39,919
Speaker 1: Does Joel Polanski live here? Yeah? He lives here, all right?

828
00:41:40,480 --> 00:41:42,400
Speaker 1: What does he do in the evenings?

829
00:41:42,719 --> 00:41:44,719
Speaker 2: Always home evenings, goes to bed early?

830
00:41:45,160 --> 00:41:48,200
Speaker 1: Does he drink? No? What does he do with his money?

831
00:41:48,360 --> 00:41:50,880
Speaker 1: Does he save any Sure he saves some of it.

832
00:41:50,880 --> 00:41:52,920
Speaker 2: He sends to the old country to help old folks.

833
00:41:53,440 --> 00:41:54,560
Speaker 2: Some of it's in the bank.

834
00:41:55,160 --> 00:41:57,719
Speaker 1: This feels like a job interview. Well, now, if Joe

835
00:41:57,719 --> 00:41:59,600
Speaker 1: should get more wages, what do you think he'd do

836
00:41:59,680 --> 00:42:02,040
Speaker 1: with it? Save it him by a house. I guess

837
00:42:02,200 --> 00:42:03,200
Speaker 1: that's the correct answer.

838
00:42:03,320 --> 00:42:06,160
Speaker 2: So something like that happened. Maybe it wasn't those exact words,

839
00:42:06,200 --> 00:42:08,520
Speaker 2: but this is what was going on. I'll mention that

840
00:42:08,600 --> 00:42:12,560
Speaker 2: exchange was reprinted in this recent Ford biography called The

841
00:42:12,600 --> 00:42:17,680
Speaker 2: People's Tycoon by Stephen Watts. So this feels strange, wildly

842
00:42:17,719 --> 00:42:19,680
Speaker 2: inappropriate by our norms today.

843
00:42:19,400 --> 00:42:22,160
Speaker 1: But not any different than drug testing in a factory.

844
00:42:22,239 --> 00:42:24,680
Speaker 1: Interestingly similar to drug tests or in white collar work.

845
00:42:24,880 --> 00:42:27,560
Speaker 1: You know, look at your Twitter feed back years and

846
00:42:27,640 --> 00:42:30,280
Speaker 1: years to when you were a college student firing people

847
00:42:30,280 --> 00:42:30,719
Speaker 1: based on this.

848
00:42:30,960 --> 00:42:32,080
Speaker 2: Okay, I'd buy it.

849
00:42:32,280 --> 00:42:34,520
Speaker 1: I'm not saying it's good. I'm just saying you, to

850
00:42:34,560 --> 00:42:37,520
Speaker 1: this day, people take an interest in the personal lives

851
00:42:37,520 --> 00:42:37,920
Speaker 1: of their.

852
00:42:37,800 --> 00:42:41,320
Speaker 2: Workers more than an interest. They demand certain behaviors outside

853
00:42:41,320 --> 00:42:44,640
Speaker 2: of work, and people went along with it then as now.

854
00:42:45,120 --> 00:42:48,239
Speaker 2: So now by nineteen fourteen, everything is at place, the

855
00:42:48,320 --> 00:42:52,120
Speaker 2: Model t the factory, the assembly line, the five dollars day,

856
00:42:53,120 --> 00:42:56,960
Speaker 2: and Ford is about to go parabolic.

857
00:42:57,000 --> 00:42:59,520
Speaker 1: And everyone will drive a Model Tea forever after.

858
00:43:00,520 --> 00:43:26,879
Speaker 2: That's after the break. We're back from the ad. It's

859
00:43:26,920 --> 00:43:28,200
Speaker 2: time for Ford to take off.

860
00:43:28,480 --> 00:43:29,000
Speaker 1: Let's do it.

861
00:43:29,320 --> 00:43:33,440
Speaker 2: In nineteen fourteen, Ford sells two hundred and sixty thousand

862
00:43:33,480 --> 00:43:37,040
Speaker 2: Model Tis two hundred sixty thousand. In nineteen twenty three

863
00:43:37,160 --> 00:43:39,200
Speaker 2: they sell two million.

864
00:43:40,760 --> 00:43:41,960
Speaker 1: Amazing, amazing.

865
00:43:42,280 --> 00:43:45,440
Speaker 2: More than half of all the cars and trucks sold

866
00:43:45,480 --> 00:43:49,239
Speaker 2: in America are Model T Fords. And the price, by

867
00:43:49,280 --> 00:43:52,279
Speaker 2: the way, has continued to fall. The car costs like

868
00:43:52,440 --> 00:43:55,040
Speaker 2: sixty percent less at this point than it cost in

869
00:43:55,120 --> 00:43:58,759
Speaker 2: nineteen fourteen. And Ford is just pushing this efficiency thing

870
00:43:58,840 --> 00:44:03,000
Speaker 2: further and further. He gets really into vertical integration at

871
00:44:03,040 --> 00:44:06,319
Speaker 2: this point, buys coal mines in Kentucky, tries to start

872
00:44:06,320 --> 00:44:09,480
Speaker 2: a rubber plantation in Brazil for Ordland. Yeah, there's a

873
00:44:09,480 --> 00:44:13,640
Speaker 2: book about this, And closer to home, he enlists a

874
00:44:13,719 --> 00:44:17,120
Speaker 2: guy named Edward Kingsford to help him buy a forest

875
00:44:17,560 --> 00:44:20,319
Speaker 2: and set up a sawmill in Michigan. So they got

876
00:44:20,320 --> 00:44:22,040
Speaker 2: this saw mill going. I guess a lot of wood

877
00:44:22,040 --> 00:44:25,480
Speaker 2: went into the body of the Model T and Ford

878
00:44:25,560 --> 00:44:28,759
Speaker 2: notices that there is all this sawdust that they're not

879
00:44:29,000 --> 00:44:30,719
Speaker 2: using because it just saw ust.

880
00:44:30,960 --> 00:44:32,640
Speaker 1: I love. He's touring the factory and look at the

881
00:44:32,680 --> 00:44:36,520
Speaker 1: sawdust being the floor. Yes, that's perfectly good sawdust.

882
00:44:37,120 --> 00:44:40,920
Speaker 2: And somebody figures out that, uh, just around this time,

883
00:44:41,480 --> 00:44:45,200
Speaker 2: someone had invented a way to make charcoal briquettes out

884
00:44:45,200 --> 00:44:47,880
Speaker 2: of sawdust and I think tar and a couple other things.

885
00:44:48,400 --> 00:44:51,960
Speaker 2: And so for it's like, let's make a charcol brikette factory,

886
00:44:52,760 --> 00:44:54,799
Speaker 2: and to build this factory next to the saw mill

887
00:44:54,880 --> 00:44:59,680
Speaker 2: in Michigan. He gets Thomas Edison, his old buddy.

888
00:45:00,360 --> 00:45:03,040
Speaker 1: Thomas Edison is like, sure, char I was working on

889
00:45:03,040 --> 00:45:03,480
Speaker 1: another thing.

890
00:45:05,960 --> 00:45:09,000
Speaker 2: So they get this charcoal briqette factory and they start

891
00:45:09,040 --> 00:45:13,320
Speaker 2: making Ford brand charcoal briquettes. It's selling them at Ford dealers.

892
00:45:13,600 --> 00:45:16,920
Speaker 2: A while later, some years after this, they end up

893
00:45:16,960 --> 00:45:20,560
Speaker 2: spinning off the Ford charcoal business. Somebody later it's like,

894
00:45:20,560 --> 00:45:23,280
Speaker 2: why are we the charcoal business? But this charcoal business

895
00:45:23,360 --> 00:45:25,360
Speaker 2: keeps going on its own, and it is named for

896
00:45:25,800 --> 00:45:28,319
Speaker 2: the guy who helped Ford set up the meal in

897
00:45:28,360 --> 00:45:30,120
Speaker 2: the first place, Edward Kingsford.

898
00:45:30,480 --> 00:45:33,520
Speaker 1: Kingsford still buy it to the Stanford still the leading

899
00:45:33,760 --> 00:45:36,160
Speaker 1: I think brand of charcoal in America if I have

900
00:45:36,160 --> 00:45:36,520
Speaker 1: it right.

901
00:45:37,280 --> 00:45:42,040
Speaker 2: So anyway, Ford is now profoundly vertically integrated. He's got

902
00:45:42,040 --> 00:45:45,640
Speaker 2: all these raw materials, and he builds the biggest factory

903
00:45:45,719 --> 00:45:49,320
Speaker 2: in the world on the River Rouge in Dearborn, Michigan.

904
00:45:49,440 --> 00:45:51,479
Speaker 1: And we've talked about this before. The River Rouge plant,

905
00:45:51,480 --> 00:45:54,160
Speaker 1: which is more like a small city, two thousand acres.

906
00:45:54,440 --> 00:45:57,040
Speaker 1: You bring in iron ore in one end and cars

907
00:45:57,120 --> 00:45:59,719
Speaker 1: roll at the other end. It's got power plants.

908
00:45:59,280 --> 00:46:04,719
Speaker 2: Yeah, a railroad inside. It's twentieth century mass production in

909
00:46:04,800 --> 00:46:08,319
Speaker 2: one place. But this term mass production, it's a little

910
00:46:08,320 --> 00:46:10,919
Speaker 2: bit of an anachronism applied to this time. People aren't

911
00:46:10,960 --> 00:46:13,000
Speaker 2: really using it as a free They don't call it

912
00:46:13,040 --> 00:46:17,840
Speaker 2: mass production yet they call it Fordism. Fordism and the

913
00:46:17,920 --> 00:46:23,400
Speaker 2: nineteen twenties are this era, famously, when mass produced consumer

914
00:46:23,480 --> 00:46:28,720
Speaker 2: products are booming. RCA is using Fordism to make radios

915
00:46:28,760 --> 00:46:30,920
Speaker 2: for the masses, and Hoover is doing it with vacuums.

916
00:46:31,360 --> 00:46:34,640
Speaker 2: And Ford's name is literally describing the main economic force

917
00:46:34,640 --> 00:46:38,400
Speaker 2: of the era. The man himself is world famous at

918
00:46:38,440 --> 00:46:41,360
Speaker 2: this point. He writes an autobiography that's popular. He runs

919
00:46:41,360 --> 00:46:45,359
Speaker 2: for Senate, although he refuses to campaigns the factory very

920
00:46:45,400 --> 00:46:49,640
Speaker 2: old fashioned. It doesn't win. I'll just Huxley publishes Brave

921
00:46:49,680 --> 00:46:51,920
Speaker 2: New World book. We read in high school. You know

922
00:46:51,960 --> 00:46:56,359
Speaker 2: about a dystopian consumerist society around this time, and in

923
00:46:56,400 --> 00:46:59,080
Speaker 2: that book, the society. In that book, they start their

924
00:46:59,200 --> 00:47:03,439
Speaker 2: calendar with the introduction of the model t the year

925
00:47:03,480 --> 00:47:04,200
Speaker 2: of our Ford.

926
00:47:05,120 --> 00:47:07,359
Speaker 1: Clever, Clever, and the New.

927
00:47:07,360 --> 00:47:10,680
Speaker 2: York Times runs a special section with this banner headline.

928
00:47:10,600 --> 00:47:13,960
Speaker 1: About the net worth of Henry Ford. It says Ford's

929
00:47:14,000 --> 00:47:16,920
Speaker 1: billion breaks world record. No man in history ever had

930
00:47:16,960 --> 00:47:20,440
Speaker 1: wealth as vast as his. Rockefeller, his nearest rival, now

931
00:47:20,520 --> 00:47:22,320
Speaker 1: ranked far behind Fords.

932
00:47:22,320 --> 00:47:25,920
Speaker 2: Next move, a billionaire move we have become familiar with

933
00:47:25,960 --> 00:47:29,680
Speaker 2: in recent years, gets into the media business, buys this

934
00:47:29,760 --> 00:47:33,520
Speaker 2: struggling newspaper called The Dearborn Independent and starts paying to

935
00:47:33,520 --> 00:47:36,760
Speaker 2: distribute it nationally as a way to disseminate his ideas.

936
00:47:36,800 --> 00:47:39,440
Speaker 2: It's why a lot of billionaires get into the media business.

937
00:47:40,120 --> 00:47:43,560
Speaker 2: And this we also talked about in our Volkswagen story,

938
00:47:43,719 --> 00:47:47,520
Speaker 2: because the most famous thing by far that the paper

939
00:47:47,560 --> 00:47:52,120
Speaker 2: published under Ford's ownership was a series called The International Jew.

940
00:47:53,480 --> 00:47:55,200
Speaker 1: Sounds bad? Sounds bad?

941
00:47:55,520 --> 00:47:57,600
Speaker 2: Yeah, They published as a book and they called it

942
00:47:57,719 --> 00:48:02,600
Speaker 2: The International Jew. The World's foremost problem, foremost problem, not

943
00:48:02,719 --> 00:48:06,880
Speaker 2: just a problem. It wasn't among the worlds foremost problems.

944
00:48:07,200 --> 00:48:10,399
Speaker 1: And as we mentioned, Hitler loved this book. Hitler loved

945
00:48:10,440 --> 00:48:12,359
Speaker 1: the book and put a picture of Henry fully on

946
00:48:12,400 --> 00:48:15,719
Speaker 1: his wall stick with the business and the factories. Henry Ford.

947
00:48:17,320 --> 00:48:19,960
Speaker 2: I wish he had done that. But in the nineteen twenties,

948
00:48:20,600 --> 00:48:24,480
Speaker 2: you can publish this book and it can be not

949
00:48:24,680 --> 00:48:27,799
Speaker 2: the main thing about you. You can be Henry Ford,

950
00:48:27,800 --> 00:48:31,000
Speaker 2: industrial genius who just happens to believe that the Jews

951
00:48:31,040 --> 00:48:35,400
Speaker 2: are the world's foremost problem. So as the nineteen twenties

952
00:48:35,400 --> 00:48:39,879
Speaker 2: are going on, the companies who are selling the other

953
00:48:40,000 --> 00:48:41,799
Speaker 2: half of cars in America, for.

954
00:48:41,840 --> 00:48:45,080
Speaker 1: Its competitors Chrysler and General Motors we'll talk about.

955
00:48:44,880 --> 00:48:49,480
Speaker 2: Next week, they are of course adopting Fordism. They're adopting

956
00:48:49,680 --> 00:48:55,040
Speaker 2: mass production. And also in the nineteen twenties, this new

957
00:48:55,160 --> 00:49:02,120
Speaker 2: era of mass production is transforming consumption. It's changing the

958
00:49:02,160 --> 00:49:07,239
Speaker 2: way Americans think about stuff and buying stuff and borrowing

959
00:49:07,320 --> 00:49:10,080
Speaker 2: money to buy stuff. It is in some ways the

960
00:49:10,080 --> 00:49:16,680
Speaker 2: first great era of mass consumption. And Ford had created

961
00:49:16,719 --> 00:49:21,400
Speaker 2: this era, but he didn't really understand it. And because

962
00:49:21,440 --> 00:49:24,880
Speaker 2: he didn't understand it, he was going to get left behind.

963
00:49:26,120 --> 00:49:29,600
Speaker 2: Next week on the show how Alfred Sloan and General

964
00:49:29,640 --> 00:49:34,640
Speaker 2: Motors beat Henry Ford. Thanks everyone for sending notes to

965
00:49:34,760 --> 00:49:37,640
Speaker 2: us about the show with suggestions of episodes you want

966
00:49:37,680 --> 00:49:40,880
Speaker 2: to hear. We got an episode suggestion about the ancient world,

967
00:49:40,920 --> 00:49:44,080
Speaker 2: which we would love to tackle. Yeah, Railroads is another

968
00:49:44,080 --> 00:49:46,640
Speaker 2: one that we will definitely do more than one episode

969
00:49:46,719 --> 00:49:50,400
Speaker 2: mail and it does really make me happy reading these emails.

970
00:49:50,600 --> 00:49:54,200
Speaker 2: Please keep writing to us. We're at Business History at

971
00:49:54,200 --> 00:49:57,880
Speaker 2: Pushkin dot fm, and I'm on Twitter at Jacob Goldstein,

972
00:49:57,920 --> 00:50:01,040
Speaker 2: and I'm also on LinkedIn. I'm at radiosmith in most places.

973
00:50:01,400 --> 00:50:05,880
Speaker 2: Today's show was run and edited by one Ryan Dilly,

974
00:50:06,320 --> 00:50:10,880
Speaker 2: produced by mister Gabriel Hunter Chang, and engineered by Ms

975
00:50:10,880 --> 00:50:12,640
Speaker 2: Sarah bruguer Nice.

976
00:50:12,680 --> 00:50:16,040
Speaker 1: I like the honorifics. I'm mister Jacob Goldstein. I am

977
00:50:16,080 --> 00:50:17,680
Speaker 1: Sir Robert Smith. Thanks for listening.