Henry Ford - A Great Innovator

Ford's Employee-Friendly Practices Contd...

Of Ford's innovative thinking, it was said, "A genius machinist, Ford, in essence, was different for the simple reason that he never tried to be the same as anyone else. He willed success; hence the company prospered under his charismatic spell."²⁸ Ford was a person of great humility and had strong bonds with his employees. In fiscal 1929, Ford lost $68 million due to the depression.²⁹ But Ford did not reduce employee wages till the autumn of 1932, when he finally rolled back the minimum wage to $4 per day. As recovery began in 1935, Ford raised wages again to $6 per day.

The Criticism

Ford was held in high esteem for his invaluable contributions to the automobile and aviation (Refer Exhibit II) industry worldwide, but he also faced criticism on a few grounds. Some said that the segregation of the assembly process into 'thoughtless recurring tasks' made Ford workers into robots. The critics felt that the assembly line made workers' mechanical skill redundant.

The workers no longer needed specialized technical skills and were only required to do standardized unskilled work. Ford rebutted these allegations and said, "I have heard it said, in fact, I believe it's quite a current thought, that we have taken skill out of work. We have not.

We have put a higher skill into planning, management, and tool building, and the results of that skill are enjoyed by the man who is not skilled."³⁰ When Ford raised the wages of workers to $5 a day, some analysts, businessmen and company shareholders criticized him saying that he was a crazy man who was determined to ruin the company. They considered Ford's way of reducing the high labor turnover rate to be very foolish. To this, Ford said, "Well, you know when you pay men well you can talk to them."³¹ Some critics thought that Ford was resistant to new ideas. He was described as a stubborn man with a 'complex personality.' He behaved like a caricature of the wealthy, influential and barbaric class.

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28] As quoted in the article, "Ford at 100: A Century of Audacious Tinkering," by Douglas Brinkley, Detroit Free Press, June 12, 2003.

29] During 1929-1940, US witnessed great depression which began with the greatest stock market panic in history on October. 24, 1929. The business conditions were very poor throughout the late 1920s and mid 1930s.

30] As quoted in the article, "Henry Ford and the Model T," posted on www.wiley.com.

31] As quoted in the article, "Henry Ford and the Model T," posted on www.wiley.com.

Case Details

Case Code : LDEN025
Themes: Corporate Social Responsibility, Entrepreneurship
Case Length : 13 Pages
Period : 1903
Organization : Ford Motor Corporation
Pub Date : 2003
Teaching Note : Not Available
Countries : USA
Industry : Automobile

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