Henry Ford – The HR Manager

by Maria Sporre on September 10, 2012

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As the Founder of Ford Motor Company Henry Ford (July 30, 1863 – April 7, 1947) was the one who changed the market for automobiles in  the USA. By developing the techniques behind mass production Ford made the automobile available to the middle class that had, up until then, not been able to afford one.

”I will build a car for the great multitude.” – Henry Ford

In 1908 Ford Motor Company introduced the Model T automobile (T-Ford). After nineteen years of production and over 15 Million cars sold, Ford had revolutionized the market for transportation, transforming the car from a luxury item to something that was essential for the average Joe and some may say, defining starting point of the Motor Age.

The success of the T-Ford has much to do with the innovative manufacturing techniques Ford introduced. By using a constantly moving assembly line and effective and precise coordination of operations he was able to decrees the time it took to complete a chassis to 93 minutes to 728 minutes.

Innovating HR

However, mass production was demanding for the workers and the factories in Detroit experienced a high employee turnover. To retain the workforce Ford decided to double the wages to $5 per day. This was the origins of welfare capitalism; improving the circumstances for the workers while reducing the heavy turnover. Ford increased the wages so that the manual labor would meet the efficiency demands of the new mass production techniques.

The $5-per-day program not only increased the efficiency but created a new middle class  of workers who could afford to buy the car they themselves produced. In other words, he created a class of well-paid workers that generated demand, which in turn had positive effects on business expansion.

Moreover, the $5-per-day program proved to work extremely well; employee turnover decreases and the more competent workers went to Ford, which consequently increased productivity and lowered training costs.

The program was also used to foster a certain company culture as it was only offered to workers who were living after the standards set by Ford. Habits such as drinking and gambling were not allowed according to the Ford Way.

The Ford Way in the 21tn century

“Coming together is a beginning; keeping together is progress; working together is success.” – Henry Ford

In the first half of the 20th century the Ford Way meant $5-per-day program and living your life according to the manner of which Ford approved of. In the 21tn century, HR has taken on another role.

In 2009, Ford had suffered the worst year ever, reaching a $14.6 billion loss in 2008. The outcome was massive downsizing and a major change management project. This required new HR initiatives.

The Ford Way was translated into a “ONE-vision”: “One Ford: One Team, One Plane, One Goal”; Changing Ford into a leaner, more efficient company. For HR this meant standardizing and globalizing as many HR processes as possible, creating a global matrixes environment, improve labor-cost efficiency while still aiming to be a “Great Place to Work”. The HR department re-engineered almost everything in order to support the ONE Ford mission and goals.

“Obstacles are those frightful things you see when you take your eyes off your goal.” – Henry Ford

About Maria Sporre :

Management Consultant at Bearing Consulting, with deep knowledge in Talent Management, Innovation Management, Orgnisational Development and Business Development with a wide range of industry experience. Master Degree from Stockholm School of Economics and In-depth experience at the operational and executive level as HR Manager.

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