American Business History: A Very Short Introduction by Walter A. Friedman

Author:Walter A. Friedman [Friedman, Walter A.]
Language: eng
Format: epub
ISBN: 9780190622503
Google: L8znDwAAQBAJ
Amazon: 0190622474
Publisher: Oxford University Press
Published: 2020-05-31T23:00:00+00:00

Automobiles

The automobile industry, which became the largest industry in America, got its start in Europe. In 1885, German engineer Karl Benz patented a gasoline-powered car with a single-cylinder engine. In the 1900s and 1910s, new automobile technologies were introduced in the United States by hundreds of producers experimenting not only with gasoline engines but also with steam, electricity, and gas–electric hybrids.

Initially, many entrepreneurs competed to bring a product to market. In 1893, for instance, Charles and Frank Duryea founded the Duryea Motor Wagon Company, the first automobile manufacturing company in the United States. Eight years later, Ransom E. Olds started the Olds Motor Vehicle Company, later known as Oldsmobile, in Lansing, Michigan. There was also the Thomas B. Jeffery Company, which produced the popular Rambler in Kenosha, Wisconsin.

Soon, however, Henry Ford came to dominate the competition. Born in Michigan in 1863, Ford was a machinist who had worked on steam engines for Westinghouse early in his career. His dream, however, was to “put America on wheels.” In 1900, this seemed more like pure fantasy than an achievable end: there were few paved roads, horses were the primary method of travel, and cars were still clunky and expensive. In 1901, Ford launched an automobile company with C. Harold Wills, but left after only a year because of disagreements. The next year, Ford, who liked to race cars, established a second automobile manufacturing company, this time with coal dealer Alexander Y. Malcomson, called Ford & Malcomson, Ltd. The company contracted its initial manufacturing to the Dodge brothers, who eventually became investors in the reincorporated Ford Motor Company in 1903.

The same year, Ford introduced the Model A. The car had functional problems, however, and was followed by model after model until Ford hit on the successful Model T. He then began large-scale production in his factory outside Detroit and over time reorganized the factory floor to improve efficiency, using unskilled workers to perform specific repetitive tasks. Ford described the process of creating the moving assembly line as being inspired by the “disassembly line” he observed in meatpacking firms.

Ford’s goal was to own and control as much of the entire production process as possible—and to grow as big as possible. To do this, Ford began to acquire businesses spanning the entire supply chain, from timberlands and rubber plantations to iron ore mines and glassworks. By contrast, Ford paid little attention to marketing and relied on a distribution system led by engaging bicycle retailers and others who were tasked with selling the Model T. Together, these strategies proved remarkably successful at reducing costs. The price of the Model T dropped from $850 in 1908 to $290 by 1924. By the time production of the Model T stopped in 1927, Ford had produced 15 million of them.

Ford’s Model T became the quintessential standardized product of the twentieth century. A friend noted of Ford, “Standardization was his hobby.” In his autobiography, Ford was philosophical on the subject: “Machine production in this country has diversified our life, has

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