Reckoning

by David Halberstam

  “What we never understood about that era,” said Irving Shapiro, the head of DuPont and one of the most respected businessmen in the country, “because we were all busy working so hard and proud of ourselves for how well we were doing, was how easy it was to make money then.” The postwar years, the immense material strength and physical might, two generations of unrivaled prosperity—it all had lulled America into thinking it had attained an economic Utopia, a kind of guaranteed national prosperity, like a concession won in some marathon bargaining session with God, a guaranteed annual increase in the standard of living. In those few postwar decades, America had taken a temporary historical accident and construed it as a permanent condition. Then, as if overnight, it had all started unraveling. “In just twenty-five years,” said Felix Rohatyn, the financier and social critic, “we have gone from the American century to the American crisis. That is an astonishing turnaround—perhaps the shortest parabola in history.”

  PART TWO

  4. THE FOUNDER

  LATE IN THE LIFE of the first Henry Ford a boy named John Dahlinger, who more than likely was Ford’s illegitimate son, had a discussion with the old man about education and found himself frustrated by Ford’s very narrow view of what schooling should be. “But sir,” Dahlinger told Ford, “these are different times—this is the modern age, and—” Ford cut him off. “Young man,” he said, “I invented the modern age.”

  The American century had indeed begun in Detroit, created by a man of simple agrarian principles. His father, an Irish immigrant, had arrived in America almost penniless, bringing with him only his hand tools. To William Ford the greatest opportunity that America offered was the chance for an ordinary man of ordinary means to buy and own land, and he was appalled when his own son proved to be restless with such good fortune and unwilling to work the family soil. Like his father, Ford started with scarcely a dollar in his pocket. When he was working on his first car, he held two jobs, one to support his family, the other to earn enough money to buy the metal and parts he needed for his prototype. When he died in 1946 his worth was placed at $600 million. Of his most famous car, the Model T, he sold 15,456,868. Mass production, he once said, was “the new messiah,” and indeed it was almost God to him. When he began producing the Model T, it took twelve and a half hours to make one car. His dream was to make one car every minute. It took him only twelve years to achieve that goal, and five years after that, in 1925, he was making one every ten seconds. His name was attached not just to cars but to a way of life, and it became a verb—“to fordize” meant to standardize a product and manufacture it by mass means at a price so low that the common man could afford to buy it. Though his name is primarily associated with the world of the auto, his true genius lay in mass production. He came to love his factory more than his car; he would spare no expense to modernize his plant, but he resisted virtually every attempt to change the Model T until he—and the car—were overtaken by younger, more entrepreneurial competitors making better autos. Only then, slightly embittered toward the customers who were deserting him for General Motors, did he change.

  When he began production, automobiles had been for the rich. Woodrow Wilson had even complained about them as symbols of the upper class flaunting its money. The best chauffeurs, observed the local weekly Detroit Saturday Night in 1909, came from “the servant class.” They could be counted on, the paper said, to know “exactly what is expected of them by their masters.” Henry Ford wanted none of that; from the start he had been determined to make a people’s car. He was interested in transportation for men like himself, especially farmers. The secret to that lay in mass production. “Every time I reduce the price of the car by one dollar,” he said early in the production of the T, “I get one thousand new buyers,” and he ruthlessly brought the price down every year, seeking—as the Japanese would some sixty years later—size of market rather than maximum profit per piece. He also knew in a shrewd, intuitive way what few others did in that era, that as a manufacturer and employer he was part of a critical cycle that expanded the buying power of the common man. One year his advertising people brought him a new slogan that read, “Buy a Ford—save the difference,” and he quickly changed it to “Buy a Ford—spend the difference,” for though he was innately thrifty himself, he believed that the key to prosperity lay not in saving but in spending and turning money over. Money in banks was idle money, and he did not like that. When one of the children of his friend Harvey Firestone boasted that he had some savings in the bank, Ford lectured the child. That money was idle. What the child should do, Ford said, was spend the money on tools. “Make something,” he admonished. “Create something.”

  For better or worse, his values were absolutely the values of the common man of his day. That allowed him to be perfectly in touch with the average worker and average farmer. Out of his own restlessness with farm work he understood how farmers, burdened by premechanized agricultural life, felt about the loneliness, monotony, and hardship of the farm. Yet though he shared the principles, yearnings, and prejudices of his countrymen, he vastly altered their world. What he wrought reconstituted the nature of work and began a profound change in the relationship of man to his job. By the end of the century it was clear that he had played a major part in creating a new kind of society in which man thought as much about leisure time as about his work. Ironically, the idea of leisure itself, or even worse, a leisure culture, was anathema to him. He once told the writer William Richards, “Energy should be spent on something useful.” Children, he continued, should be allowed to learn to swim because that was useful, since they might one day be in a boat that tipped over. “They ought to play games so they will be strong enough to protect themselves. But golf...” His voice, Richards said, broke off into contempt and disparagement. He was never entirely comfortable with the fruits of his success, even though he lived in a magnificent fifty-six-room house. “I still like boiled potatoes with the skins on,” he said, “and I do not want a man standing in back of my chair, laughing up his sleeve at me while I am taking the potatoes’ jackets off.” Of pleasure and material things he was wary. “I have never known what to do with money after my expenses were paid. I can’t squander it on myself without hurting myself,” he said, “and nobody wants to do that.”

  Only work gave purpose: “Thinking men know that work is the salvation of the race, morally, physically, socially. Work does more than get us our living. It gets us our life. I do not,” he once said, “think that man can ever leave his business. You think of it by day and dream of it by night.” Work was not just the critical part of life to him, it was life.

  Born poor, he became at one point the richest man in the United States. How does it feel, a magazine reporter once asked him, to be the nation’s first billionaire? “Oh shit,” he answered. As a good farmboy should, he hated alcohol and tobacco, and he once said that alcohol was the real cause of World War I—the beer-drinking German taking after the wine-drinking Frenchman. His strength in his early years—which were also his good years—was in the purity of his technical instincts. “We go forward without facts, and we learn the facts as we go along,” he once said. Having helped create an urbanized world where millions of God-fearing young men left the farm and went to the cities, he was profoundly uneasy with his own handiwork, preferring the simpler, slower America he had aided in diminishing. For all his romanticizing of farm life, however, the truth was that he had always been bored by farm work and could not wait to leave the farm and play with machines. They were his real love.

  When Ford was born in 1863 on a farm in Dearborn, Michigan, the Civil War was still on. His mother died at the age of thirty-seven delivering her eighth child. He had idolized her, and her death was a bitter blow. “I thought a great wrong had been done to me,” he said. Later in his life he not only built a house which was an almost exact replica of his earlier home, including the Ford family’s very own stove, whose serial number he had memorized, but had a cousin who resembled his mother dress up i
n an exact imitation of the way she dressed and wear her hair in the same style.

  His father’s people were new Americans. When the great potato blight had struck Ireland in 1846, ruining the most important crop, the country had been devastated. Of a population of eight million, one million had died, and one million had emigrated to America. That migration included William Ford, who had set off to the magic land with two borrowed pounds and his set of tools. He was a skilled carpenter, and when he arrived, he moved quickly to Michigan, where some of his brothers had already settled.

  A century before, Michigan had been virgin wilderness. The first white settlers were French-speaking trappers, many of whom became rich in the fur trade. They were followed by the New England merchants; harder of eye and less joyous in their pursuit of pleasure than their French predecessors, many soon made fortunes organizing the fur trade and the wondrous new timber business.

  A major westward migration started, however, in the second quarter of the nineteenth century. New York and New England farmers, exhausted from working small, rocky, infertile plots, were drawn by word of this rich new frontier. They were the first agricultural settlers of what was to prove one of the great granaries of the world.

  What had so recently been frontier was linked almost overnight to the centers of American commerce. In 1825 the Erie Canal, all 263 miles of it, was completed. It connected the East with what Americans rather innocently thought was the West and caused shipping rates to drop dramatically. Before the canal it had cost almost 20 cents a mile to ship a ton of freight overland from Buffalo to New York; with the new waterway it was soon less than a penny a mile. The Midwestern farm now served the Eastern consumer; the Michigan mine supplied the Eastern manufacturer. The effect on Detroit was stunning. It became the hub of a region selling tobacco and flour and salted fish to people some seven hundred miles away. The effect on New York City, joined to the canal by the Hudson River, was equally important. It soon surpassed Boston as a center of commerce.

  The arrival of people like the Fords was part of the first massive immigration to America. It was encouraged by America’s business elite, who thought the cost of native labor too high and wanted to bring in desperate Europeans who would work for much less. In the 1830s, there were 599,000 new immigrants, in the 1840s 1.7 million, and in the 1850s 2.6 million. Detroit was one focus of the influx. Its population, 9000 in 1820, would be well over 200,000 by the end of the century. It was well placed to benefit from the continuing westward expansion. Was there a demand for wood to build wooden carriages and wooden railroad cars and wooden ties for the expanding network of track? The surrounding area was rich in timber. Was iron needed for the building of a variety of machines? The mines to the north (manned by Cornish workers who were making $64 a month, five times what they made back in England) produced iron and copper as well. Soon Detroit workers were making 150,000 iron stoves a year, as the members of the new middle class of America gratefully replaced open hearths with stoves.

  Its early industries, those that developed in the middle of the nineteenth century, drew men with particular skills that evolved into the skills required in the early twentieth century. The carriage makers, for example, became the auto makers; the stove makers became the metalworkers in the automotive body and engine shops; the leatherworkers who did the upholstery for carriages eventually made seat covers for cars. (David Buick, founder of the Buick company, was a plumbing manufacturer before turning to cars.) Soon the railroad boom made Detroit even more of an industrial center: Workers turned out thousands of railroad cars for the rapidly expanding nation.

  What had been a wood and leather and iron town in the middle of the century was by 1900 using steel too. America as an industrial nation was beginning to take off, and new cities like Detroit were providing the base for that explosion. Much of the start-up money invested in the early auto companies came from Detroit’s older successful businesses; for example, some of the early money invested in Ford and Cadillac came from the barons of iron, copper, and lumber.

  It was a raw, angry, dynamic city of the unassimilated; there was simply no time to assimilate. The city was growing beyond its capacity to absorb people, a phenomenon central to the angry and antagonistic relationship that developed between labor and management. Soon the city was an uneasy aggregation of ethnic islands—Corktown (Irish), Polacktown, Dutchtown, Sauerkraut Row (German), and Kentucky (blacks). Each group was ready to hate the newest arrivals. The conditions in which they lived were dreadful; pestilence and a fearsome rate of infant death were commonplace. But there was also, whatever else, the promise of a better future.

  William Ford promptly found work making railroad ties. With his savings he bought some land and built a house, in awe of an America that had so readily allowed him to do so. To him Ireland was a place where a man was a tenant on the land, and America was a place where he owned it.

  Henry Ford started school when he was seven. His first teacher was a seventeen-year-old girl. Most of the teaching was done by women, because the men were out farming. The earlier grades had more students, because the older children were out working the fields along with their fathers. The basic book was the McGuffey Eclectic Reader, which Ford loved. It stressed moral values, but it included sections from Dickens, Washington Irving, and other major writers, which enticed many children into a genuine appreciation of literature. Although Ford loved McGuffey, he did not like books in general or the alien ideas they sometimes transmitted. History, he once said, coining a famous phrase, “is the bunk.” On another occasion, he said, “We read to escape thinking. Reading can become a dope habit....Book sickness is a modern ailment.” By that, he meant reading that was neither technical nor functional, reading as an end in itself, as a pleasure without a practical purpose. But he was wary even of practical volumes. “If it is in a book, it is at least four years old, and I don’t have any use for it,” he told one of his designers.

  What he truly loved was machinery. He had a gift for looking at a machine and quickly understanding it, not only repairing it but making it work better. The timing of his career could not have been more perfect for a man of his gifts, for he came to manhood at precisely the beginning of the modern machine age. Men like him were beginning to invent devices to mechanize work beyond the comprehension of their elders, and other men were discovering huge sources of oil that would permit those machines to run. Coal had produced steam, which had powered gigantic engines, albeit expensively; oil would allow both small and large engines to run cheaply.

  In this dawn of the oil age, a man with an inventive bent could use his own shed as a factory. That was perfect for the young Henry Ford. He had always played with machines, ignoring all else around him. Even as a little boy he was an obsessive tinkerer. Once, when he was a grown man, someone asked him what toys he had loved as a boy. “My toys were all tools,” he answered. “They still are.” He stayed in school only as long as he had to, and even then his mind was elsewhere. During class, he would hide behind a geography book and fiddle with some gadget. In his early teens he designed a mechanism that allowed his father to close the farm gate without leaving his wagon. Watches fascinated him. When he was given a watch at thirteen, he immediately took it apart and put it back together. He soon started repairing watches for his friends. His father complained that he should get paid for this, but he never listened, for it was a labor of love. That same year he saw a steam engine, a threshing machine which could also move. It was the first time he had seen a thresher that was not drawn by horses. Ford jumped out of his wagon and talked to the engineer. Twenty years later he could repeat in exact detail every word the engineer had uttered, including the fact that the engine was making two hundred turns a minute.

  His father wanted him to become a farmer, but it was a vain hope. He hated the drudgery of the farm. “What a waste it is,” he once said, “for human beings to spend hours and days behind a slowly moving team of horses when in the same time a tractor could do six times as much work.”
To William Ford, on his own land at last, free of the old country, the farm was liberating; to Henry Ford, bored and restless, it was like a prison. (Cows came to symbolize his hatred of the farm. They were lazy, and they lay around all the time. He spent an entire lifetime railing against them. “The cow is the crudest machine in the world,” he once said. On another occasion he said that if people would destroy all the cows in the world, they would eliminate the sources of war. When his company became large, he had his labs working constantly to find substitutes for dairy products.)

  In 1879 Henry Ford entered his seventeenth year, which in those days was considered maturity. On the first day of December of that year, he left for Detroit, a most consequential departure. He walked to the city, half a day’s journey. The Detroit of 1879 was a city of 116,000, a place of foundries and machine shops and carriage makers. There were some nine hundred manufacturing and mechanical businesses, many of them one-room operations but some of them large. It was an industrial city in the making. Ten railroads ran through it. As New York City, later in the century, was a mecca for young Americans interested in the arts, Detroit was just becoming a city with a pull for young men who wanted to work with machines. The surge in small industries was beginning, and a young man who was good with his hands could always find a job.

  Henry Ford found a job repairing machines at the Michigan Car Company. He was paid $1.10 a day and worked six days a week. But he was too talented for the job. He left very soon, and there are two theories as to why. One is that he had repaired some machinery that older workers could not fix, thus earning their enmity. The other is that he had accomplished in half an hour what other workers did in six. For whatever reason, and it was neither lack of talent nor lack of ambition, he was fired. He then went to work at James Flowers and Brothers, a machine shop with an exceptional reputation for quality and diversity of product. The Flowers brothers were, like many ambitious young entrepreneurs of Detroit, immigrant craftsmen who had taken their tools and left Europe for the new world, and they were men of skill and imagination. As an apprentice there, Ford was immersed in the world of machinery, working among men who, like himself, thought only of the future applications of machines. He made $2.50 a week, boarded at a house which charged him $3.50 a week, and walked to work. His salary left him $1 a week short, and as a good, enterprising young man he set out to make up the difference. He heard that the McGill jewelry shop had just gotten a large supply of clocks from another store. Ford offered to clean and repair the clocks for 50 cents a night. He did so well that he was soon repairing watches, although the owner insisted that he do the watch repair in the back room, since his youthfulness would not instill confidence in customers. That job added another $2 to his weekly salary, so he was now $1 a week ahead.