June 16, 2023

The Founding of Ford Motor Company

The Founding of Ford Motor Company

June 16, 1903. Henry Ford incorporates the Ford Motor Company, marking the beginning of one of the world's most influential automobile manufacturers.


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Transcript

Cold Open


It’s October 10th, 1901 at a horse track in Detroit, Michigan where the city’s first car races are underway.

38-year-old Henry Ford nervously grips the wheel of his self-built racer as it’s rolled out to the starting line. Today is his first-ever race and he has stiff competition. Next to him is his sole competitor, and one of the reigning monarchs of early American racing, Alexander Winton.

Filling the lawn beside them is a crowd of uninterested spectators. People flocked to the race track, selling out the event with high hopes of seeing the still-novel automobile in action. But so far, the event hasn’t been all it's cracked up to be.

The preliminary races have been long and lackluster, with one car winning at a pace slower than a human running on foot. So to perk up the crowd, the contest’s clear favorite, Alexander Winton, got behind the wheel and broke a world speed record. But, the thrill has already worn off. Now, Henry watches the spectators yawn and talk amongst themselves, exhausted from a long and slow afternoon.

But as the two racers start their engines, crowd’s eyes dart back to the track, where a David and Goliath battle is about to unfold.

As the drivers set off around the track, Alexander takes an early lead, while the inexperienced Henry lags behind, losing ground at every turn. But as they complete more laps, Henry grows confident. He starts to close the gap.

And while Henry catches up, Alexander’s car begins to fail. Smoke billows from his engine while Henry’s car demonstrates pure mechanical prowess. He shoots past Alexander, and as Henry crosses the finish line in first place... the crowd goes wild.

Henry Ford’s victory will earn him $50 and a legion of new fans, sparking an illustrious racing career, and with it, fresh opportunities. After years of failed ventures in car production, Henry’s newfound celebrity on the race track will enable him to get back into the automotive industry, and he will gladly bet his future on the industry’s potential. This gamble will pay off, transforming the engineer-turned-racecar driver into one of his age’s most famous figures after he starts his influential car manufacturing company on June 16th, 1903.

Introduction


From Noiser and Airship, I’m Lindsay Graham and this is History Daily.

History is made every day. On this podcast—every day—we tell the true stories of the people and events that shaped our world.

Today is June 16th, 1903: The Founding of Ford Motor Company.

Act One: Humble Beginnings


It’s September 1891 in Dearborn, Michigan, eleven years before Henry Ford’s first racing victory.

Outside their home, Henry and his wife Clara cram their belongings into a hay wagon.

Today marks the beginning of the couple’s new life in a new town. Recently, Henry was offered a job in Detroit as an engineer for the Edison Illuminating Company. He eagerly accepted, and now, with all of their things packed, Henry and Clara hit the road, bound for the big city.

As they pull up to their new, rickety two-story house, Clara jumps out and begins settling in, unpacking their belongings. But Henry barely has time to help, before he’s called to his first shift at his new job, where he will be supervising the operation and maintenance of the engines providing Detroit with electricity.

The hours are long. Henry starts off working 12-hour night shifts, toiling at the substation from 6 PM to 6 AM. But it doesn’t take long for the 28-year-old to prove his engineering prowess. As the months pass, Henry becomes one of the substation’s most valued employees, developing a reputation for his clear skill and scrappy resourcefulness. But despite his professional success, Henry’s true passion is not the miracle of electricity, but the rapidly-changing transportation industry.

After moving to Detroit, Henry purchased a bicycle. And as he sped through town on two wheels, the engineer started thinking more about the growing ways to get around. He started reading articles about the burgeoning automobile industry, which German engineer Carl Benz sparked just five years earlier when he developed the first modern, gasoline-powered automobile.

Now, Henry wants to get involved himself. After seeing a German engine mounted on a firehouse cart in a Chicago exposition, Henry has started toying with the idea of attaching an engine to a bicycle. Though this idea is impractical due to the engine’s weight, Henry doesn’t give up on breaking into the auto industry.

In his spare time and in the slow hours at work, he devotes himself to developing an internal-combustion engine of his own design. He builds a workshop in the shed behind his home, and with tools borrowed from the substation, he starts bringing his vision to life. Working weekends, evenings, and sporadically during his workdays, he is able to construct a crude engine from scrap metal parts. On Christmas Eve of 1893, he puts his creation to the test. With Clara’s assistance, he clamps the engine to their kitchen sink, pours in gasoline, and watches his engine roar to life.

With this small triumph under his belt, Henry decides to aim higher. For the next two years, he spends all his free time creating a bigger, better, more powerful engine with a carriage to match. With the help of a close circle of other mechanics, a creation they call the Quadricycle takes form. It's a 500-pound open carriage sitting atop four bicycle wheels, with a bar for steering and a 4-horsepower engine, the Quadricycle is Henry's first attempt at the gasoline-powered automobile. But it has limitations, there’s no reverse gear, and its gas tank only holds 3 gallons; its seat barely accommodates two passengers; and it can only reach a speed of 20 miles per hour. But it’s still better than anything Henry’s local competitors have made.

Because while the Quadricycle was nearing completion in the spring of 1896, another engineer debuts Detroit’s first gas-powered horseless carriage. As this automobile tours the city’s streets, Henry follows it on his bike, comparing it to his own creation. On all fronts, his Quadricycle seems to come out ahead, as a much lighter and faster alternative to this 1,300-pound carriage, which can only reach 5 miles per hour.

But Henry still has to make sure his car actually works. One month after his competitor’s maiden voyage, Henry prepares to debut his Quadricycle. But in the early morning of June 4th, 1886, as Henry begins rolling the car out of his shed, he runs into an immediate problem. While fixated on the car’s mechanics, he failed to realize that the Quadricycle is too large to fit through his shed door.

Seeing no other option, Henry grabs an ax and violently widens the opening, before finally wheeling the car out to the cobblestone alley outside. After a few tries, the engine sputters to life then Henry takes the Quadricycle out on its first test run.

The successful trial is worth the destruction done to his shed. Though initially infuriated by Henry’s damage to the building, even his landlord is too impressed by Henry’s car to remain mad for long. He decides to leave the entrance widened, and even puts in swinging doors to accommodate Henry’s creation, giving rise to one of America’s first automobile garages.

Two months after this successful voyage, Henry will have another professional breakthrough, this time in New York. While at a convention for the Edison Illuminating Company, he will be invited to meet and have dinner with the company’s founder, the legendary inventor himself, Thomas Edison. And with the encouragement of his personal childhood hero, Henry will begin to take his automotive pursuits to new heights.

Act Two: Failure


It’s August 1896 inside a New York City hotel’s private banquet room.

Sitting around a dinner table are an assortment of Edison Illuminating Company representatives from around the nation. Among them are some of the electrical industry’s foremost leaders, but none command as much attention as the man seated at the head of the table: company founder and renowned inventor, Thomas Edison.

From his seat further down the table, Henry Ford looks upon the luminary with awe. Edison is one of Henry’s greatest idols. The inventor is precisely what the young engineer hopes to one day become: maker of things that transform the daily lives of everyday people.

While at dinner, Henry gets invited to sit next to Edison and the two begin talking about his new gas-powered car. His interest piqued, Edison peppers Henry with an endless stream of questions about the contraption. Henry happily answers, drawing sketches to explain the car’s mechanics, and appreciating the fact that an inventor of such esteem as Edison, can sense the car’s potential, which so many of Henry’s peers have failed to recognize.

Over and over again, Henry has been told, he’s wasting his time on a gas-powered car when the future is surely in electricity. But Edison is one of the first to see what Henry sees in the project, urging him to keep at it and initiating what will become a three-decade friendship between the two inventors.

Edison’s words of encouragement that night effectively rid Henry of any lingering doubts regarding his car’s value. With the approval of a man he believes to be the greatest inventive genius in the world, Henry sets his sights even higher still. He throws himself into making a second, improved automobile, one that could be manufactured for the masses. When he returns back to Detroit, Henry employs his team of local mechanics and by late 1897, his second car is complete. It’s bigger than the Quadricycle, with a far more powerful and sophisticated engine, and it seems marketable.

So, upon its completion, Henry steps into a new role, jumping from engineer to businessman. In need of capital to get his car manufactured, Henry begins seeking out financial support. Eventually, he finds it in Detroit’s mayor and a collection of interested businessmen and wealthy capitalists. Equipped with financial backing, Henry and his investors officially form the Detroit Automobile Company in 1899. And shortly after, Henry resigns from his position at the Edison Illuminating Company, ready to risk stability for the sake of his promising passion.

But internal tensions and manufacturing difficulties halt the company’s progress. Most of these issues stem from Henry’s perfectionism. Determined to get his car just right, Henry changes and discards designs, holds up production, and angers his investors.

After just a year of operation, the company that once seemed so promising is dissolved. But some of Henry’s investors stick by his side, leading to the creation of the Henry Ford Company in 1901. But again Henry fails to get a car ready for manufacturing. With a growing interest in racing, all Henry wants to do is build a race car. But this doesn’t sit well with his investors, who thought Henry would focus on making a commercial model. After only three months, tensions come to a head again, and Henry leaves the company, without ever finalizing a design for any car.

But from these business failures, Henry learns two valuable lessons: he can’t be happy if he doesn’t control his own company, and he’s unwilling to compromise his interests and instincts for investors. But by the turn of the century, his dream of a self-reliant entrepreneurial endeavor feels like an outdated concept, quickly becoming antithetical to the new American way of doing business big. Still, while other companies turned into corporate bureaucracies, Henry remains determined to create something different. And as he watches the automobile industry grow more competitive by the day, he wonders if another golden opportunity could possibly arise.

To his delight, a third chance at success does come his way, born out of Henry’s passion for racing. Pivoting away from manufacturing, Henry uses racing as an opportunity to build his brand outside the factory. By winning competitions and setting records on the tracks, Henry finds newfound fame and publicity as a racing celebrity.

This temporary deviation from his dogged attempts at car production will prove fruitful. Able to leverage the nation’s growing infatuation with the sport, Henry will make his name known through his victories on the race tracks, erasing the public’s memories of his business failures, and eventually reviving interest in his cars. Using his new celebrity, Henry Ford will be able to return to his original mission, secure the financial support of another batch of investors, and finally create the company he always dreamed of.

Act Three: Success


It’s the morning of June 16th, 1903 in Detroit, Michigan.

Sitting around a conference table, Henry Ford and 12 investors pass paperwork back and forth as they each sign off on the documents that will officially incorporate the Ford Motor Company.

With two failed companies behind him, the experience was familiar to Henry. But something made this time different; Henry was confident that he had courted not just any investors, but the right investors, people patient and deferential enough to let him direct and control the company exactly as he sees fit.

With the documents signed and sent to the office of the Michigan Secretary of State, the Ford Motor Company is off to the races, with Henry at its helm. Stubbornly independent, the engineer will remain determined to follow his instincts, a habit that will lead him to great success, and one that will compound his mistakes whenever his intuition leads him astray. But, fortunately for Henry, he will be right more than he's wrong.

Over the years, Henry Ford will carve a legacy as the leader of one of the most influential automobile manufacturers in history. Five years after incorporating the Ford Motor Company, the business will release its revolutionary Model T — an affordable, mass-manufactured car that will transform transportation by opening up vehicle ownership to millions of ordinary middle-class Americans. Five years later, the company will introduce the moving assembly line, an innovation that will revolutionize productivity in manufacturing. Able to produce cars more efficiently than ever, Henry will be able to double his workers’ wages the following year, instituting a $5 dollar minimum wage that will be radical for its time. A decade after that, the Ford Motor Company will become one of the first American corporations to adopt a five-day, 40-hour work week for its factory workers.

By the time of his death in 1947, Henry will have achieved what he always dreamed of. The Ford Motor Company will have transformed American society and daily life in a way so profound that he will attain the same legendary status as his own hero, Thomas Edison.

Even after Henry’s death, the company he founded will endure and thrive. When the Ford Motor Company goes public in 1956, it will become the largest IPO in history up to that point, and the company will remain one of the nation’s leading car manufacturers even over a century after its incorporation helped to put America on wheels on June 16th, 1903.

Outro


Next on History Daily. June 19th, 1968. In an event coined “Solidarity Day,” over 50,000 people march on Washington D.C. to protest economic injustice.

From Noiser and Airship, this is History Daily, hosted, edited, and executive produced by me, Lindsay Graham.

Audio editing by Muhammad Shahzaib.

Sound design by Mollie Baack.

Music by Lindsay Graham.

This episode is written, researched, and produced by Alexandra Currie-Buckner.

Our other executive producer is Pascal Hughes for Noiser.