Hmmmm .....
Labor philosophy
Five-dollar wage
Time magazine, January 14, 1935
Ford was a pioneer of "welfare capitalism", designed to improve the lot of his
workers and especially to reduce the heavy turnover that had many departments
hiring 300 men per year to fill 100 slots. Efficiency meant hiring and keeping
the best workers.[27]
Ford astonished the world in 1914 by offering a $5 per day wage ($150 today),
which more than doubled the rate of most of his workers.[28] A Cleveland, Ohio,
newspaper editorialized that the announcement "shot like a blinding rocket
through the dark clouds of the present industrial depression".[29] The move
proved extremely profitable; instead of constant employee turnover, the best
mechanics in Detroit flocked to Ford, bringing their human capital and
expertise, raising productivity, and lowering training costs.[30][31] Ford
announced his $5-per-day program on January 5, 1914, raising the minimum daily
pay from $2.34 to $5 for qualifying male workers.[32][33]
Detroit was already a high-wage city, but competitors were forced to raise
wages or lose their best workers.[34] Ford's policy proved that paying employees
more would enable them to afford the cars they were producing and thus boost the
local economy. He viewed the increased wages as profit-sharing linked with
rewarding those who were most productive and of good character.[35] It may have
been Couzens who convinced Ford to adopt the $5-day wage.[36]
Real profit-sharing was offered to employees who had worked at the company
for six months or more, and, importantly, conducted their lives in a manner of
which Ford's "Social Department" approved. They frowned on heavy drinking,
gambling, and on what are now called deadbeat dads. The Social Department used
50 investigators and support staff to maintain employee standards; a large
percentage of workers were able to qualify for this "profit-sharing".[37]
Ford's incursion into his employees' private lives was highly controversial,
and he soon backed off from the most intrusive aspects. By the time he wrote his
1922 memoir, he had spoken of the Social Department and the private conditions
for profit-sharing in the past tense. He admitted that "paternalism has no place
in the industry. Welfare work that consists in prying into employees' private
concerns is out of date. Men need counsel and men need help, often special help;
and all this ought to be rendered for decency's sake. But the broad workable
plan of investment and participation will do more to solidify the industry and
strengthen the organization than will any social work on the outside. Without
changing the principle we have changed the method of payment."[38]
Five-day workweek
In addition to raising his workers' wages, Ford also introduced a new, reduced
workweek in 1926. The decision was made in 1922, when Ford and Crowther
described it as six 8-hour days, giving a 48-hour week,[39] but in 1926 it was
announced as five 8-hour days, giving a 40-hour week.[40] The program apparently
started with Saturday being designated a workday, before becoming a day off
sometime later. On May 1, 1926, the Ford Motor Company's factory workers
switched to a five-day, 40-hour workweek, with the company's office workers
making the transition the following August.[41]
Ford had decided to boost productivity, as workers were expected to put more
effort into their work in exchange for more leisure time. Ford also believed
decent leisure time was good for business, giving workers additional time to
purchase and consume more goods. However, charitable concerns also played a
role. Ford explained, "It is high time to rid ourselves of the notion that
leisure for workmen is either 'lost time' or a class privilege."[41]
Labor unions
Ford was adamantly against labor unions. He explained his views on unions in
Chapter 18 of My Life and Work.[42] He thought they were too heavily influenced
by leaders who would end up doing more harm than good for workers despite their
ostensible good motives. Most wanted to restrict productivity as a means to
foster employment, but Ford saw this as self-defeating because, in his view,
productivity was necessary for economic prosperity to exist.[citation
needed]
He believed that productivity gains that obviated certain jobs would
nevertheless stimulate the broader economy and grow new jobs elsewhere, whether
within the same corporation or in others. Ford also believed that union leaders
had a perverse incentive to foment perpetual socio-economic crises to maintain
their power. Meanwhile, he believed that smart managers had an incentive to do
right by their workers, because doing so would maximize their profits. However,
Ford did acknowledge that many managers were basically too bad at managing to
understand this fact. But Ford believed that eventually, if good managers such
as he could fend off the attacks of misguided people from both left and right
(i.e., both socialists and bad-manager reactionaries), the good managers would
create a socio-economic system wherein neither bad management nor bad unions
could find enough support to continue existing.[citation needed]
To forestall union activity, Ford promoted Harry Bennett, a former Navy
boxer, to head the Service Department. Bennett employed various intimidation
tactics to quash union organizing.[43] On March 7, 1932, during the Great
Depression, unemployed Detroit auto workers staged the Ford Hunger March to the
Ford River Rouge Complex to present 14 demands to Henry Ford. The Dearborn
police department and Ford security guards opened fire on workers leading to
over sixty injuries and five deaths. On May 26, 1937, Bennett's security men
beat members of the United Automobile Workers (UAW), including Walter Reuther,
with clubs.[44] While Bennett's men were beating the UAW representatives, the
supervising police chief on the scene was Carl Brooks, an alumnus of Bennett's
Service Department, and [Brooks] "did not give orders to
intervene".[44]: 311 The following day photographs of the injured UAW
members appeared in newspapers, later becoming known as The Battle of the
Overpass.[citation needed]
In the late 1930s and early 1940s, Edsel—who was president of the
company—thought Ford had to come to a collective bargaining agreement with the
unions because the violence, work disruptions, and bitter stalemates could not
go on forever. But Ford, who still had the final veto in the company on a de
facto basis even if not an official one, refused to cooperate. For several
years, he kept Bennett in charge of talking to the unions trying to organize the
Ford Motor Company. Sorensen's memoir[45] makes clear that Ford's purpose in
putting Bennett in charge was to make sure no agreements were ever
reached.[citation needed]
The Ford Motor Company was the last Detroit automaker to recognize the UAW,
despite pressure from the rest of the U.S. automotive industry and even the U.S.
government. A sit-down strike by the UAW union in April 1941 closed the River
Rouge Plant. Sorensen recounted[46] that a distraught Henry Ford was very close
to following through with a threat to break up the company rather than
cooperate. Still, his wife Clara told him she would leave him if he destroyed
the family business. In her view, it would not be worth the chaos it would
create. Ford complied with his wife's ultimatum and even agreed with her in
retrospect. Overnight, the Ford Motor Company went from the most stubborn
holdout among automakers to the one with the most favorable UAW contract terms.
The contract was signed in June 1941.[46] About a year later, Ford told Walter
Reuther, "It was one of the most sensible things Harry Bennett ever did when he
got the UAW into this plant." Reuther inquired, "What do you mean?" Ford
replied, "Well, you've been fighting General Motors and the Wall Street crowd.
Now you're in here and we've given you a union shop and more than you got out of
them. That puts you on our side, doesn't it? We can fight General Motors and
Wall Street together, eh?"[47]