Dearborn, Michigan — Mass-produced godfather Henry Ford suffered from the potential shortage of parts and raw materials. Suspecting the financiers, the spirit that fueled his ardent anti-Semitism, he was particularly distrustful of the suppliers. He was obsessed with stockpiling enough materials to keep the assembly line up and running without compromising shortages.
He bought his coal mines in Kentucky and Virginia and a railroad to bring their products to his factories. He gathered a fleet of ships navigating the Great Lakes and provided a stable supply of iron ore and timber harvested from the Upper Peninsula of Michigan. And he built a huge factory on the Rouge River outside Detroit. This is a factory complex designed to handle all stages of turning raw materials into finished vehicles.
A century later, the Rouge plant continues to operate, but suffers from a shortage of critical parts that would have scared Mr Ford. The company he founded cannot buy enough semiconductors, which are the computer chips that are the brains of modern automobiles.
Ford relies heavily on a single supplier of chips in Taiwan, more than 7,000 miles away.Ford and others due to a shortage of chips throughout the global economy Car maker It has been forced to stop production intermittently.
Last afternoon at Rouge, hundreds of workers used tools to combine parts from Ford’s most popular vehicle, the F-150 pickup truck. But in recent months, Ford has been forced to wait for the arrival of chips that can bring thousands of finished cars to life in Henry Ford’s hometown of Dearborn.
“That’s exactly what Henry Ford was afraid of,” said Matt Anderson, a traffic curator at the Henry Ford Museum in Dearborn, exploring his legacy and the history of American innovation. .. “He became more and more obsessed with managing every aspect of the production process.”
Henry Ford’s legacy was widely celebrated in his own time and is blaming today.He supported the feelings of white supremacists with stringents Anti-semitism.. He finally unleashed a brutal violence against the labor movement that organized his factory. He took exclusive control of the affordable car market.
Ford realized that the supply chain was fragile and required constant scrutiny and backup planning. Despite his hostility to trade unions, he understood the value of generous wages to motivate workers. He warned that investors’ demands for short-term profits could threaten long-term resilience.
“He was still aware that the supply chain was risky,” said Mike Skinner, founder of the Henry Ford Heritage Association. “Ford would have made their own chips if he were there today,” Skinner added. “There is no doubt about it.”
Understanding supply chain crises
People running Ford say it’s oversimplified. Rouge-produced F-150 pickups use more than 800 different chips and you need to rely on a specialist. In addition, the storage life of chips is limited, making it difficult to stockpile.
“It’s very complicated,” Hau Thai-Tang, Ford’s Chief Industrial Platform Officer, said in a recent interview. He added that for Ford, making its own chips, or even limiting its suppliers to North America, would result in “a very difficult task that consumes a lot of assets and capital and is not realistic.”
Still, Ford’s strategy to procure chips, as Titan admitted, was guided by the interests of the party, the shareholder, who the founder of the company looked down on as a potential threat to the vitality of his business.
Ford’s adoption of so-called just-in-time inventory, which keeps warehouses lean to minimize costs, is “driven by the capital markets and focused on return on investment capital,” Titan said. Mr. says.
Henry Ford frequently stopped demanding dividends (payments that enrich investors), hoping to use his profits to grow.
“We are against bankers who see the business as a cut-out melon,” Ford declared in his memoirs.
The tension came into the public eye in 1916 when Mr Ford clashed with some of his first investors, the Dodge brothers, who themselves were early innovators in the emerging automotive industry. rice field.
Ford’s previous year’s profits reached $ 16 million, and the company hid more than $ 50 million in cash in banks. Ford categorically insisted that the money was spent on the construction of his new factory, Rouge.
Brother Dodge claimed dividends and they filed a proceeding. They petitioned the court for an injunction to freeze Ford’s expansion plans at Rouge.
The court infuriated and mandated Mr Ford. Brother Dodge jeopardized not only his plans for Rouge, but also the core organizational principles of his company.
“I don’t think we should make such a terrible profit in our car,” he said at a witness stand during a subsequent trial. “It was my policy to lower the price of cars as soon as production allows and to benefit users and workers.”
The dispute was partially fueled by Mr Ford’s decision nearly two years ago to double workers’ wages to an unprecedented $ 5 a day. Other business leaders have accused him of endangering their company by pushing up wages across the American industry.
Mr Ford argued that he was simply practical. The advent of assembly lines has made the labor of making cars routine. Many workers were annoyed by what they felt like being demoted to robots and repetitive tasks, and they quit in a fuss. Ford has invested higher wages in order to partially anticipate the union’s drive as a means of attracting enough hands to produce an increasing amount of cars.
“Low-wage businesses are not always safe,” he declared.
Given the extraordinary success of the Model T, Ford dominated the market for popular-priced cars. Therefore, paying higher wages was a way to protect its control, said Professor Mark J. Law of Harvard Law School.
In a broader sense, Ford portrays abundant wages as the key to promoting the consumer economy he advocates, pushing out the contours of the city and affordable as a way to open new forms of housing, offices and leisure. I used a priced car.
“Most of the people in the country live on wages,” Ford wrote in his memoirs. “The size of their lives-the proportion of their wages-determines the prosperity of the country.”
Richard Snow’s biography “I invented the present age.”
“Business is a service, not a jackpot,” Ford said.
The Michigan Supreme Court eventually dismissed the concept. “Companies are organized and operated primarily for the benefit of shareholders,” the court ruled.
That decision is now a sign of a march to the superiority of American shareholders.
The court ruled on the Dodge brothers and ordered Ford to distribute a dividend of approximately $ 25 million, but the appeal secured Ford’s right to proceed with the construction of the Rouge.
Mr Ford later squeezed the Dodge brothers and bought their stock to take control of his company.
But today, more than half of Ford Motor’s stake is managed by Wall Street agencies such as investment trust Vanguard and BlackRock, the world’s largest asset management company that currently oversees more than $ 10 trillion. increase.
In the three years leading up to the pandemic, Ford distributed dividends to shareholders, reaching $ 7.9 billion, or 70% of profits, according to data compiled by William Razonic, an economist at the University of Massachusetts Lowell.
Compared to other listed companies, Ford has shown a strong tendency to limit dividends and maintain capital in the face of challenges, Lasonic said.
However, chip companies have responded significantly to investors by limiting capacity. This is a strategy to keep high prices.Lack of Truck driver Warehousemen are often reduced in wages as a way to reward shareholders and are often the result of such job downgrades.
Mr Ford would not have accepted the shortage due to excessive reliance on suppliers who could not meet the company’s demands.
Willy C. Sea, an international trade expert at Harvard Business School, said: “He knew that he had to take control of the company before he could deliver the car to the masses.”
The parking lot that houses the F-150 pickup truck, which is currently waiting for chips, is behind Ford’s headquarters in Dearborn. I’m sitting opposite Henry Ford Elementary School.
At the end of last year, the company partnership The purpose is to make chips in the United States.
“We are certainly looking back over the last two years,” said Thai-Tang, a Ford executive.