In May 1906, having convinced himself that the Aerocar would be a brilliant success, Malcomson agreed to sell his 25 percent stake in Ford Motor for $175,000. On July 12, the transaction was finalized. With the proceeds, he built an 80,000-square-foot building to produce a five-passenger touring car, featuring four air-cooled cylinders that generated 24 horsepower, priced at $2,800. By 1908, he was offering three models priced from $1,500 to $2,200. No one bought them. Aerocar folded, and Malcomson left the car business forever.*6 The following year, department store owner Joseph L. Hudson bought the building and formed the Hudson Motor Car Company—headed by Roy Chapin—to build low-priced cars. Never an immense success, Hudson was sufficiently profitable to remain in business until 1954.
Neither Couzens nor Ford ever expressed misgivings about ousting at a wildly deflated price “the real founder of the Ford Motor Company,” the man who “had given both men their start.” Ford, in fact, would gloat over his triumph in the coming years, never missing an opportunity to remind Malcomson of how much money he had lost. In time, as with many of Ford’s dealings, the series of transactions was sanitized to protect him.*7 Charles Sorenson presented such a version:
As Model N neared production stage, Malcomson became so troublesome that he alienated even the Dodge brothers. There were rumors that he was backing another motorcar company, whereupon Ford, Couzens, the Dodges, Wills, and two other Ford Motor Company stockholders organized the Ford Manufacturing Company, which would make parts for Model N, while the Dodges continued as suppliers for Model K. This move had three results: First, it brought the manufacture of motorcar parts under Ford control. Second, it enabled stockholders to take two profits, one from manufacture of parts and the other from sale of cars. Third, it forced Malcomson to sell Ford Motor Company stock.14
In fact, the first two were contrivances—no one had ever found fault with the Dodges’ work, and stockholders would profit only selectively—and only the third was germane to the move. In addition, although Ford Manufacturing was contracted to produce those ten thousand motors for the soon-to-be-released Model N, Ford, Couzens, and the Dodges assumed that by the time the motors had actually been built, Ford Manufacturing might well no longer exist.
With Malcomson’s departure and that of other minor stockholders, Henry Ford brought his holdings to 58.5 percent of Ford Motor Company. Couzens purchased Albert Strelow’s shares and became the second-largest stockholder at 11 percent. When John Gray died in July 1906, his 10.5 percent passed to his estate—in which Alexander Malcomson was not a beneficiary. With Gray gone, Henry Ford became president of the company.
Malcomson’s prejudice for larger cars had again worked to Ford’s benefit. The Model N, which would turn out to be Ford’s most innovative product and the effective prototype for the Model T, drew heavily on the engineering and design that Ford had been forced to undertake for the Model K. “Shortly after my arrival at Ford,” Charles Sorenson noted, “designs which plainly were parts for a lighter car began to show up on the blackboard and drafting tables. Mr. Ford was applying to this car ideas he had worked out with Models B and K. He was seeking a successor to Model F which would have four instead of two cylinders and torque instead of chain drive, and yet could be made to sell under the $800 minimum for his earlier runabouts.”
With that new model, Henry Ford, at age forty-three, would finally begin the ascent that would make him the richest man in America.
* * *
*1 Interim letters, in this case D and E, were for prototypes that were never put into production.
*2 The diameter of the piston head is called the “bore,” and the distance it travels—determined by the length of the rod—is the “stroke.” Bore and stroke will determine engine displacement. The stroke-to-bore ratio is a major factor in determining both power output and how efficiently the engine functions.
*3 Technically, only Wills was being paid, at $125 per week, but he was splitting that with Ford.
*4 A pattern was in essence a three-dimensional sketch, a model of a part or component. Patterns were particularly important at Ford’s because Ford “never quite understood what a design looked like” without one.
*5 Most observers considered the Ford factory inferior to the Packard plant as well.
*6 Malcomson returned to the coal business, which remained successful. He died in the 1920s, a multimillionaire.
*7 The most pathetic of the former investors was Strelow. He took the $25,000 he eventually received for his Ford stock and invested it in a gold mine that went bust. A story, perhaps apocryphal, made the rounds that some years later, Strelow was spotted in a line of common laborers trying to be hired on Ford’s assembly line for the famous $5 a day.
CHAPTER 18
In January 1906, Ford Motor Company began a series of full-page ads that featured both the N and the K, one pictured under the other. For the former, the copy read, “This car—Model N—is the biggest revelation yet made in Automobile construction. A car of this type for less than $500.00 seemed an impossibility, but here it is. 4-cylinder—15 H.P. Direct Drive. Speed—40 miles. 78-inch Wheel Base. 700 pounds.” For the K, which ran underneath and appeared to be a gussied-up N, the copy read, “6 cylinders—40 H.P. 40 to 50 miles per hour on high gear. Perfected magneto ignition—mechanical oiler, 114-inch wheel base, luxurious body for 5 passengers, weight 2,000 pounds. Price, $2,500.00.” While certainly both cars were made to appear attractive, the N was presented as distinct and innovative, while the K was simply another luxury car in a virtually saturated market.
For example, also early in 1906, Packard phased out its own Model N and replaced it with the Packard 24. Priced at $4,000, it epitomized comfort, luxury, and the very best in automaking. “The motor has four vertical cylinders cast in pairs, with integral water-jackets and valve chambers,” Motor World wrote.
It is made in France from stock the best adapted to cylinder construction, but the machine work is all done in the Packard factory. The bore is 4 inches, and stroke 5 inches, so that there is an increase in the piston area over the model “N” of more than 20 per cent, and represents an increase in motorpower of 35 to 40 per cent, with only 5 per cent increase in weight. The pistons are fitted with four rings. For ignition an Eiseman high-tension magneto is used, although a storage battery is retained for the purpose of starting the motor from the seat, and is always in reserve. The magneto is bolted to the front arm of the motor support, and is operated by chain from a small counter-shaft, which is geared to the left camshaft. The current is carried through a single high-tension coil on the dash to the commutator. In the same box with the magneto coil is a single coil, with vibrator, for the storage battery, magneto and “open.” Individual switches connect with the stems of the spark plugs, so that a plug can be removed without disturbing the wires, or a fault in firing can be traced, by simply lifting one switch at a time.1
The Packard certainly cost a good deal more than the K, but it was also a good deal more car for the money. This is not to say that Ford was trying to sabotage his own product—he would certainly have been thrilled to sell every K he built. But it seems clear that the Model N was where he was placing his bets. To add to the sense of excitement, the early January Ford ads contained this postscript: “No further particulars will be given until these cars are shown for the first time at the Automobile Club of America’s Show at the 69th Regiment Armory, New York, January 13th to 20th. Deliveries for Models N and K will not be made before March. 1906 will be a ‘Ford Year.’ Agents who have closed with us can congratulate themselves.”2
But as had often been the case with Ford proclamations, Ford and Couzens were acting on a good bit of bluff, particularly for the N. To build a prototype to take to an auto show was one thing, but manufacturing ten thousand automobiles in a year—which is what they promised—was quite another. And they needed to build those ten thousand cars, for that was the cornerstone of their pricing. To defend their claims—which elicited serious skepticism, even disbelie
f, among automobile cognoscenti—Couzens took out a four-page ad in the January 1906 edition of Cycle and Automobile Journal. Under the heading “The Successful Ford,” the first page of copy read:
This is why we can build the Ford 4 cylinder Runabout for less than $500. We are making 40,000 cylinders, 10,000 engines, 40,000 wheels, 20,000 axles, 10,000 bodies, 10,000 of every part that goes into the car—think of it! Such quantities were never heard of before. For this car, we buy 40,000 spark plugs, 10,000 spark coils, 40,000 tires, all exactly alike. If we made a profit one-fifth as much on each car as is usually figured as a proper profit, we would make as large a gross profit as a manufacturer who builds two thousand cars. But who builds two thousand Runabouts? The first Runabout (Model C) we built cost $30,000, yet we sold duplicates of that model for $750. It is the quantity that counts.3
The ad went on to say that thousands were already in production, which was blatantly false, and that the Model N was a radical departure from previous Ford models, which was at least potentially true.
What was certainly true was that, despite the mythology that would settle around him only a few years later, Henry Ford at that point knew next to nothing about interchangeable parts, mass production, or even how to effectively set up a factory. He had squandered his chance to learn when he refused to even try to work with Henry Leland, and so, unless he could acquire those skills, and quickly, the Model N was doomed, no matter how good a car it was or how cheaply it was sold.
—
Although the car had to be “rushed through for the show”—it was completed only a few days beforehand—and had not been previously exhibited, “even to agents,” Ford, as promised, brought a prototype Model N to exhibit at the Automobile Club of America’s New York auto show that opened at 8:00 P.M. on Saturday, January 13, 1906, at the 69th Regiment Armory, at 68 Lexington Avenue. Opening at the very same time just steps away at Madison Square Garden was another automobile show, this one sponsored by ALAM. In a further attempt to choke off competition, the ALAM board had “suddenly and unexpectedly” made the decision in mid-1905 to no longer allow unlicensed manufacturers to exhibit at its annual auto show.4 Shut out of their industry’s most important trade show for the first time—the two sides had endured an uneasy coexistence at shows during the previous five years—the independents had been forced to scramble about, and the only appropriate venue they could find was the under-construction armory, which at that point was surrounded by scaffolding and crawling with masons, carpenters, and electrical workers. Like the Model N, the building in which the car would be exhibited was also “rushed through for the show.” When the ACA show opened, the scaffolding was gone, but large sections of the cavernous building lacked paint and other finishing touches.
The dual—or dueling—auto shows were, to that point, the most significant public display of the rift among automakers. While many buyers of automobiles had been at least vaguely aware that their purchase either conformed or did not conform to the Selden patent—and that Henry Ford was the most visible and outspoken refusé—the legal disputes had played out largely out of the view of the general public. But with automobiles attaining a popularity that would have struck dumb those who had watched the Chicago auto race ten years before, the stakes both inside and outside ALAM had escalated, and the battle had become plain to see.
“The makers of all the machines in the Garden recognize the rights of the Selden patent as covering the principles of the internal combustion engine, which is the scientific term for the gasoline engine,” The New York Times reported. “The armory exhibitors, on the other hand, are known popularly as the independents, as they have thus far refused to recognize the basic rights of the patent. This sharp legal division is really the reason for the two shows.”5
Each side billed its show as the “sixth annual,” dating from the first show in 1900. “Magnificent is the only word that aptly sums up the universal sentiment expressed last night by several thousand visitors to the two big automobile shows,” the Times went on. “If any spirit of rivalry were apparent, if any public favoritism had been anticipated, there were no evidences of such conditions in either the Madison Square Garden or the Sixty-ninth Regiment Armory.”
An automobile calendar for 1906, when cars became synonymous with glamour
But the trade journals saw things differently, and according to them ALAM had a clear advantage:
The Madison Square Garden show, held under the auspices of the Association of Licensed Automobile Manufacturers, having the benefit of an old show building and the management of show promoters of many years’ experience, was as nearly complete as it is possible for a show to be on the opening day, and everything was cleaned up ready for the public. The Automobile Club of America’s show in the 69th Regiment Armory, not half a block away from the Garden, was not in the same fortunate condition, owing mainly to the fact that the building was still in an unfinished condition when the exhibits were installed and much new work had to be completed, so that although every exhibit was in place much cleaning up had to be done after the public was admitted.6
The ALAM board had, in fact, spared no expense, and their show could not be matched in opulence. “In appearance and effective decorations the Madison Square Garden show undoubtedly excelled anything of the kind which has ever been held, and persons who have visited the large building many times during the past 12 or 15 years, declared that never before was it so well planned or so magnificently decorated.” Thirty thousand electric lights had been mounted along the ceiling, potted evergreens lined corridors, and sculptures had been commissioned for the bases and tops of stairways. “The girders are hidden from end to end of the structure, and the ceiling has been transformed into a sea of blue, colored as an Italian sky, through which the dim gleam of hidden electric lights may be discerned, giving the effect of a clear night sky. Thousands of yards of cloth were used to gain this effect….Dazzling to the eye, artistic and beautiful, the huge building had been transformed into a veritable fairy palace,” gushed Horseless Age.7 The armory decorations, on the other hand, were described as “very neat and tasty.” If ALAM’s goal was to project solidity, prosperity, and trust in its products—and that automobiles were big business—it certainly succeeded. “One hundred and twenty pleasure vehicles of forty-eight different makes represented the Garden Show, and, remarkable as it may seem, there was not a freak among them.”8
But attendance at each show was, in fact, close to identical, with an estimated 95,000 attending the ALAM show and 85,000 visiting the armory. For all the expenditures and frills, it was the actual cars that people had come to see. Automobiles had become so much a part of the culture that the crowd “swarmed through the Garden, climbed into the various cars, played the gear and brake levers, tried steering wheels, peeked under bonnets and into the mysteries of the working parts…asked prices, talked carburetor, spark coil, gears and transmissions like old time veterans…It was a surprising revelation to hear young girls, and at times their younger brothers, talking automobiles and using the proper names for the various parts.”9 Reaction at the armory show was the same. And, as with any burgeoning technology, new products would attract particular attention, which left Ford with his revolutionary $500 runabout in a particularly favorable position.
Ford had brought a Model K—the lowest-priced six-cylinder car—and a Model F with him as well, but it was the Model N that drew the attention. And Ford’s runabout fared well, in terms of both its “decidedly pleasing appearance” and its specifications—described as “better at every point than was generally expected.”10 When Ford left to return to Detroit, he had assurances that thousands of orders for his runabout were soon to follow.
But the prospect of a clamor for the Model N did not make matters easier for Ford and Couzens, who were frantically trying to get the Bellevue Avenue factory in shape to actually produce their engines. And Ford wasn’t the only manufacturer who was trying to apply modern methods but had run into problems. “The demand for
machine tools and automobile parts by competing companies was insatiable; and bottlenecks developed in half a dozen supply lines.”11
The operation Ford and Couzens encountered on their return to Detroit was indeed archaic, much of it reflecting manufacturing techniques already abandoned by Packard, Cadillac, and especially Olds. Certainly compared to George Condict’s battery-changing operation for the fleet of electric hansoms, Ford’s factory looked primitive. An engine block under construction needed to be passed by hand from one station to another, a process that continued until the completed apparatus was toted to the assembly plant on Piquette Avenue by the ever-trusty horse-drawn hay wagon.
As a result, the prototype that had been exhibited in New York had a number of problems that had to be eliminated—poor casting on the engine block and failures in the crankshaft and cooling system, among others—particularly before the company began to turn out one hundred identical automobiles per day. (Ford had been given a reprieve, however: because the Model N had been exhibited but not driven, its flaws passed largely unnoticed.)
But Ford once more proved that he knew not only when he needed help but also who could provide it and how to best avail himself of their talents. Setting up the Bellevue Avenue factory required heavy equipment, and in shopping for it, Ford had met a machine tool salesman named Walter E. Flanders, who also owned a small factory that made crankshafts. Flanders had previously worked for the Singer Sewing Machine Company, a pioneer in mass production, and Ford recognized instantly that Flanders was a man he should badger for advice. (In doing so, Ford again set aside his prejudices. Exceeding even Spider Huff in his appetites, Flanders was a hard-drinking carouser who was noted also as a brawler and an epic womanizer, all of which Ford overlooked in pursuit of product.) Flanders persuaded Ford to hire Max Wollering, a young engineer who was then working for International Harvester, and to give Wollering a free hand in setting up the Bellevue Avenue floor operation.
Drive!: Henry Ford, George Selden, and the Race to Invent the Auto Age Page 24