While General Motors was moving rapidly ahead, the Ford Motor Company was standing still and thereby forfeiting the unique position it had attained in the automobile industry. For three years after the First World War, every other car produced in the United States was a Model T Ford; as late as 1923 the company's position in the low-priced market was still regarded as unassailable. Ford sales in that year were 1,700,000 as against 800,000 for General Motors, of which Chevrolet accounted for 465,000. Two years later, Ford's loss of ground was being noted and associated with the fact that his car had been virtually unchanged for 15 years; two years after that, Ford, as has been mentioned, dropped behind Chevrolet.
For this loss of his company's leadership, responsibility rests squarely and inescapably on the shoulders of Henry Ford. He refused to recognize that the happy-go-lucky managerial techniques which had been possible in the early days of the Ford Motor Company were not suitable for an industrial giant, so that, while General Motors was acquiring an integrated, smoothly working administrative mechanism, the Ford organization depended on the whims of one aging individual. Ford retained all his prejudice against the trained technician and made no serious effort to develop anything resembling a systematic research program. Above all, he stubbornly disregarded the warnings of his officials, including his son Edsel, that Tin Lizzie had had her day.
The contrast between the phenomenal growth of the Ford Motor Company before the First World War and its stagnation afterward has led to speculation that Henry Ford's unhappy ventures into pacifism and politics caused a sort of psychological change of life. There may be something in the idea, but in the conduct of his business the only visible difference is that, as Henry Ford became older--he was sixty in 1922--he became more set in his established thought patterns. He had always been a oneidea man; he had always preferred cut-and-try methods to orderly planning, either in design or administration; and the executives who found themselves out of their jobs because they represented a real or imaginary challenge to Henry Ford's authority were in lineal descent from Alexander Malcomson and James Couzens.
The cumulative effect of Henry Ford's methods was to throttle initiative in his company. In the days when the cheap car and the assembly line were being developed, Ford and his associates played their hunches, took chances, tried any new idea that looked promising. By the 1920's this condition had changed. There was no opportunity for experimentation when the same model was being produced year after year, and any executive who expressed an independent opinion on company policy was in effect handing in his resignation. Of the brilliant group that had made the Ford Motor Company one of the wonders of the world--Couzens, Wills, Sorensen, Knudsen, Flanders, Avery, Lee--only Sorensen remained in a position of authority, and Sorensen by his own admission was "Henry Ford's man," whose function was to take his chief's, ideas and put them into workable form.
This personnel situation was the Ford Motor Company's worst weakness. Henry Ford had fallen into the classic pattern of the despot, preferring servants to counsellors and even carrying on the traditional feud with the heir to the throne. Edsel Ford, officially the president of the company, was fully aware of the need for change and had his own ideas on what ought to be done, but he was never allowed a free hand to try them. On the contrary, his questioning of his father's judgment contributed to the tragic rift between the two which was terminated only by Edsel's death. Of the two men to whom Henry Ford did give his confidence, one was Charles E. Sorensen, who, as we have just seen, was content to put Ford's ideas on to the production line and did so very ably. The other was Harry Bennett. Of his activities, all that needs to be said at this point is that his Ford Service Department was a long way down hill from Dean Marquis's Sociological Department.
The pressure of events finally compelled Henry Ford to admit that he was wrong. Dropping the price of the cheapest Model T to $290, extending more liberal credit terms, even dressing Lizzie up with accessories and an occasional deviation from the standard black finish--all failed to halt declining sales in a boom period. None of these expedients could alter the fact that by paying not too much more the customer could get a superior car in the Chevrolet, the Overland, the Essex, or William C. Durant's Star, or that for the cost of a Model T he could get a used car with equipment and styling such as no Ford possessed.
So a landmark in automotive history was reached on May 26, 1927, when the last of some 15,000,000 Model T's rolled off the assembly line at River Rouge and the great plant closed down except for the manufacture of replacement parts. Yet no one regarded this move as a confession of failure. Such was the reputation of Henry Ford in popular imagination, that it was simply taken for granted that he was suspending operations in order to produce another technological miracle.
The Model A which Ford introduced early in 1928 was not quite that. It was built along conventional lines, styled like its competitors, with a four-cylinder engine and a sliding gear transmission in place of the Model T's planetary gears, 30 Still, if it was not a miracle, it was good enough to arrest the decline of the Ford Motor Company, although not to restore the company to its former position. Ford sales exceeded Chevrolet's in 1928 but dropped back again once the novelty of the Model A wore off. The net effect of the Ford recovery was to insure a firm second place among automobile manufacturers for the Ford Motor Company.
The demise of the Tin Lizzie can also be taken as the point at which the annual model came to dominate automobile manufacturing. The tradition of year-to-year change was of long standing in the industry. Automobile shows had been held annually since 1900, and most producers liked to be able to display some novel feature of technique or styling--not a difficult thing to do in the experimental years of the horseless carriage. Model changes, however, had been overshadowed by the apparently endless line of Model T's, all built to the same pattern. But now the Model T was gone, and both its successors and its competitors had to face a market condition in which the new car had to offer something ostensibly superior to its still serviceable predecessor. Since the annual model was primarily a selling feature, it was inevitable that styling should normally be given more emphasis than technological changes, since major technical improvements cannot be guaranteed to arrive on a 12-month schedule.
At any rate, the Model A demonstrated that Henry Ford was still very much in business. The man who could quit completely for six months and then work out the Model A in 90 days still had much of his old resiliency and mechanical talent.
Nevertheless, the basic weaknesses which had brought on the Ford crisis were still there. If Henry Ford could not yet be counted out, the fact remained that he was getting no younger and no less set in his ways. The autocratic management of the Ford Motor Company continued, along with the absence of any adequate research and engineering organization. Despite the temporary success of the Model A, Ford was now following automotive development rather than leading it. Under these conditions he could certainly not expect to overhaul General, Motors; it was even questionable whether he could face the new challenge being offered by Walter Chrysler.