The ENGINE OF CAPITALISM - GREED Backing Up To Run Over Freedom Again.


Saturday, February 24, 2018


I admit that it would be an oversimplification to say Detroit became the center of the American auto industry because in 1863, Henry Ford (above) was born in it's suburb of Dearborn, Michigan. That accident of birth may have been why, out of the thousands of backyard inventors and tinkers it was Henry who in just 30 years went from failure to earning the modern equivalent $188 billion. But the real key to Detroit's success was just good old geography.
See, in 1900, there were 8,000 automobiles in America,built by over 1,000 inventors from Bangor, Maine to San Francisco. But a realistic look at the market showed that if you wanted to be successful at making cars you needed six things – steel, coal, rubber, cheap land for your plant, workers and customers. And it turned out that 1900 Detroit, was the perfect time and place for all those things to come together. Well, not perfect. It was a compromise, but as compromises go, it was perfect.
First, if you want to make steel, you need iron ore, and around the northwestern edge of Lake Superior – in the forests of Minnesota, Wisconsin, Ontario, Canada and the upper peninsula of Michigan – were some of the world's richest outcrops of soft cherty iron oxides. Humans started mining this iron in the 1840's, when the ore was so rich it could go straight into a smelter. 
They started out producing iron right next to the mines, heating the ore over wood fires to over 2,000 degrees Fahrenheit and then scraping off the impurities. But you can't make an automobile out of iron. You need steel.
The forests that surrounded the mines might have supplied enough fuel to turn that iron into steel, but burning one pound of wood only gives you about 7,000 British Thermal Units of heat. However burning a pound of coal produces almost 3 times as many BTUs. The problem was the nearest coal deposits were 1,500 miles and more to the south. 
Ships being the cheapest method to carry bulk cargoes,investors, mostly from Cleveland, Ohio, built fleets to transport ore out of Lake Superior, through Lake Huron to the bottom of Lake Michigan and Lake Erie.  Where in the 1840's they could connect to the Erie Canal and reach New York City.
In 1903, at the age of 39, Henry Ford had his third try at making automobiles - The Ford Motor Company. Henry had little money left to invest, and was installed as Vice President of his own company. The new factory (above)  was in the Milwaukee Junction neighborhood of Detroit, and it was already home to a few other would-be automakers. But the largest industry in town was making heating and cooking stoves. Which they made out of iron.
Ford Motor Company's first car, the Model “A”, was a 2 seat “runabout” with an 8 horse power engine under the driver's seat. It only came in one color – red – and was advertised as “The most reliable machine in the world”, which it was not. Still, Ford sold 1,708 cars in 1903, and was able to offer an improved model, the “AC”, in 1904, with a 10 horse power engine. That year they also introduced the Model “B”, with it's 24 horsepower engine up front. But the “B” cost 3 times what the Model “A” did, and did not sale well.
In 1900 the southernmost port on Lake Michigan was Hammond, Indiana. And about 60 miles due south of Hammond was the Kankakee Arch, the northern rim of the 500 million year old subterranean Illinois Basin. It lies under most of Illinois, half of Indiana, a big chunk of Kentucky and a sliver of Tennessee. Since 1900, the basin has produced well over 8 billion tons of coal.
By 1901, the furnaces of Hammond were importing 2 ½ million tons of iron ore every year. A new port was constructed 30 miles to the east, to serve what became 6 steel mills pouring out smoke from the Illinois border the U.S. Steel's new mammoth plant in Gary Indiana. 
They called it the Calumet Steel District, and it boasted 37 open furnaces, 8 blast furnaces, with endless lines of rolling mills that would employ 200,000 workers, producing, in 1925, some 8 ½ million tons of steel. And since the rail roads were already delivering coal to the Calumet, it was a minor investment to extend those rails to new electrical generating plants in Chicago.
In 1906, Ford introduced the luxury Model “K”, powered by a 6 cylinder, 40 horsepower engine. They sold less than 1,000 Model K's but the profit margin per car was high enough to make the “K” successful. Despite this Henry was more enthusiastic about his 4 cylinder Model “N” (above), which sold over 2,190 cars in 1906. That year, Henry bought out the chief supporter of the Model “K”. Alexander Malcomson. And as the new President of the Ford Motor Company, Henry was now free to discontinue production of the “K”, and pursue his dream to “Democratize the Automobile”.
A little over 200 miles southeast of Detroit, and about 40 miles south east of Cleveland, on the western edge of the Pennsylvania coal fields, is Akron, Ohio.  Dr. Benjamin Franklin Goodrich had moved his rubber manufacturing company (above) to Akron in 1875, because of the cheap land, convenient canals and railroads, and the labor supply.  But mostly because 25 feet under the sandstone foundations of Akron, there was a lot of coal.
See, back in 1860, the British chemist Charles Greville Williams had described the chemical that made rubber act like rubber – latex. And once described in living plants, the same molecules were quickly found in dead plants – like coal. In particular the kind of coal underlying Akron, Ohio. 
The new synthetic latex wasn't as good as natural rubber. It was better, because in cooking up each batch, you could tweak the recipe for whatever product you were making – like fire hoses or rubber gloves (above) or tubing...
...or tires and inner tubes for the 1890's bicycle craze.  And with that was why Akron, thousands of miles from the nearest rubber tree plantation, became the “Rubber Capital of the World”.
The bicycle craze brought new companies to Akron, like Diamond, Universal, and Goodyear, and, in 1900, a buggy wagon salesman named Harvey Firestone. (above)  Harvey decided to specialize in mass producing pneumatic tires for buggy's and wagons. Many a farmer's ass thanked Harvey Firestone for that innovation. 
And, in 1907, when Henry Ford (above, left) went looking for somebody who could supply enough tires and rubber belts and gaskets for his “car for the multitude”, Harvey (above, right)  was the right man in the right business.
In January of 1907, the 44 year old Henry Ford set up a work shop on the third floor of his factory to design his new car. It had to be simple to assemble and cheap to build. Henry wanted it to be light enough, simple enough and rugged enough that the average customer could maintain it by himself. It had to survive the rutted and pockmarked unpaved roads of America. Presented to the world in the fall of 1908, it would be Henry Ford's Model “T”.
That same year Henry bought a factory 4 miles north of Detroit in Highland Park, Michigan, from the Dodge Brothers -  who had been building engines there for Ford -  Henry also acquired 60 adjoining acres of farmland. Here he would build a massive new factory (above), large enough to allow him to experiment in assembling his Model “T”. 
It was here the Industrial Assembly Line would be born, and all but a handful of the 15 million “T” Fords would be built here, gobbling up the steel from the Calumet mills and rubber from Akron..
Owners called her the Tin Lizzie, the Bouncing Betty and the Mechanical Cockroach. The “T” had no fuel pump, so you had to drive uphill in reverse. It had no oil pump. Crankcase oil splashed up onto the cylinders, as well as down onto the ground. To avoid excessive breakage, each linkage of the chassis had a generous amount of “give”, which resulted in a very talkative car .
How do you tell the difference between a rattlesnake and a Model “T”? You can count the rattles on a snake.  Owners did not need a speedometer. At ten miles an hour the hood rattled. At fifteen the radiator rattled. At twenty the top rattled. And at twenty-five miles an hour the transmission fell out. 
It was alleged Henry Ford was training squirrels to run behind each new Model “T” to collect the nuts as they fell off.  
Model “T”s came in only one color – black.  But, went another joke, why did they paint Chevy's Green? So they could hide in the grass and watch all the Fords go by. 
However, one owner insisted he wanted to be buried in his Model “T”, because “its gotten me out of every hole I've ever been in.”
Three hundred and fifty miles almost due south of Henry Ford's new factory, was the college town of Bloomington, Indiana (above) . In 1910 it had less than 10,000 inhabitants, whose primary occupations were farming, quarrying the local limestone, making furniture, and tending to the residents of Indiana University. The town boasted a new courthouse, 5 churches, 2 railroad stations, 2 theaters, and a new library. I.U.'s claim to fame was coach James Sheldon's team which did not give up a single touchdown during their 6 and 1 season. But Bloomington had yet another reason to celebrate the year of 1910.
Near the corner of North Rodgers and West 8th Street, the United States Census Bureau had calculated was the exact physical balance point of the 92,228,496 American citizens enumerated in the 1910 census. 
In short, half of Henry Ford's potential customers lived east of Bloomington, and half west. And half of his potential customers lived north and half lived south of this imaginary fulcrum - 39 degrees, 17 minutes north latitude and 86 degrees 53 minutes west longitude.
In the decade Henry Ford was building his company that center had shifted west 36 miles from outside of Columbus, Indiana to Bloomington. In the coming decade of the Model “T”, it would shift another 28 miles west northwest to just outside of Spencer Indiana. And by the time they finally ended production of the Model “T” in 1928, the center of the customer pool would have moved another 31 miles west southwest to the little town of Linton, Indiana. Each following decade, the center of the customer base would move a little farther from Detroit and farther from Henry Ford.
Henry supposedly retired in 1918, turning control over to his son, Edsel. But that was just a scam, to remove his opponents from the board of directors.  By the time America became involved in World War Two, Henry's corporation had produced more than 29 million automobiles. But he had suffered a series of strokes in the late 1930's, and Edsel became the true president of Ford Motor Company. 
Then in 1943, Edsel died of a stroke, and Henry took up the reins again. But age and wear  ate away at his attention span. Under his tenure Ford Motor Company lost $10 million a month. As his mind faded, his daughter-in-law sued to take control of his company, and installed Henry's grandson, Edsel Ford II as new president.
Henry Ford died in the waning moments of Monday, 7 April, 1947, at 83 years of age.  His funeral procession (above) passed the headquarters of all the major automakers in Detroit, and their employees stood at the curb, to pay homage to the man who had built their industry. 
Henry Ford was a life long antisemitic, and used his fortune to finance antisemitism worldwide.  He also built the first mosque in the United States, for his Muslim employees.  He did business with Nazi Germany, and Hitler praised Henry in speeches.  At home, Henry paid thugs to brutalize labor union organizers.  He also hired African Americans, and paid them equal to white workers.  He was suspicious of mathematics, and as long as he was in control, Ford Motor Company was never audited. Perhaps Henry's ignorance was understandable, since his mother had died when he was 12 and his father had forced him to leave school at 15 to work on the farm.  He hated his father's farm.  It was why the publicity department at Ford Motor Company usually photographed Henry in his machines. He understood machines.  
In short, Henry Ford was a human being, smart and stupid, kind and cruel, arrogant and humble, sometimes in the same moment. He worked hard every day of his life. He was very rich, but wealth merely magnified his faults and strengths. What made Henry Ford one of the richest human beings on the planet, had surprisingly little to do with Henry. It was really just geography.
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