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Would Ford the automaker have survived without Ford the man?

Published in blog.hemmings.com

Henry and Clara Ford in the Quadricycle. Image courtesy The Henry Ford.

The “what-if” game, as we all know, is awful fun to play with automotive history. Relying less on facts and more on imagination, we can come up with all sorts of literally fantastic scenarios, some more plausible than others. And hey, Henrik Fisker decided to play recently too, except his historical fiction was actually, well, fact.

In an August 21 interview with Fox Business, Fisker, discussing calls to oust Elon Musk after the latter’s recent bizarre behavior, pointed to Henry Ford as a parallel to Musk. “If Henry Ford would have been ousted and replaced… then we probably wouldn’t have had Ford today and we wouldn’t have had an automotive revolution,” he said. “To run the business of a startup company from the beginning to well-oiled machine is extremely complex. It has to be the founder.”

We’re not here to argue Fisker’s point. We are here, however, to argue that executives of modern automobile companies would do well to study automotive history beyond the trite they were fed in their MBA courses, particularly if they’re going to invoke automotive pioneers.

So, setting aside the fact that Musk didn’t found Tesla (instead, as some would argue, he ousted and replaced the original founders, which introduces all sorts of irony to Fisker’s statement), let’s instead consider the rough parallel between Musk/Tesla and Ford and ask whether the Ford company would have survived without Henry Ford.

To begin with, no automotive company — even in the early days of automobiles — ever succeeded with an autocrat at the helm. It took a small army of investors to help Henry Ford launch The Ford & Malcolmson Company, Ltd., the company that became the Ford Motor Company. It also took the expertise of a number of engineers — among them Charles Sorensen and C. Harold Wills — to ensure the ruggedness of Ford’s early automobiles. And while Edsel Ford wasn’t necessarily around for the launch of the Ford Motor Company, he was instrumental in convincing his father to finally discontinue the Model T and allow the company to evolve — and to survive — beyond the 1920s. Had the fate of Ford Motor Company been left entirely to Henry Ford and his own resources and expertise, it would have likely become just another startup automaker trying to loosen the hold that manufacturers of expensive automobiles had on the market.

Second, Henry Ford did actually step away from Ford Motor Company — not in its formative years, sure, but certainly in its heyday. Amid a dispute with the Dodge Brothers, who wanted Henry Ford to stop plowing profits back into the company and instead to start paying dividends to shareholders, on December 30, 1918, Henry Ford officially resigned from the Ford Motor Company. Granted, this was a ploy on Ford’s part to surreptitiously buy out all of the company’s shareholders and consolidate all the power to run the company within his family, allowing him to return to power as the head of Ford Motor Company within several months (which, given its slipping market share during the next decade or so, further illustrates the fallacy of autocracy), but there was a small stretch of time in which Ford was not in charge of the company he founded.

Third, we don’t even need to point to technicalities to show that a company Henry Ford founded could — and, in fact, did — survive without Henry Ford. Prior to Ford & Malcolmson, Henry Ford started two companies: the Detroit Automobile Company and the Henry Ford Company. The former, founded in the summer of 1899, built crap cars and soon dissolved. The latter, founded in November 1901, gave its namesake more leeway to build the cars that he pleased.

Too much leeway, it turned out. Henry Ford put down some plans for a production car, but he spent more time trying to build race cars. “My Company will kick about me following racing, but they will get the Advertising and I expect to make $ where I can’t make ¢ at Manufacturing,” he wrote in a letter to his brother-in-law regarding the venture.

That didn’t sit well with the Henry Ford Company’s stockholders. Technically, Henry Ford resigned from the Henry Ford Company in March 1902, but the separation was mutual. “(The stockholders) alleged that (Ford) was interested mainly in building cars to race; Ford claimed that the company was in too much of a hurry to make a profit and had no long-term plans,” wrote Maurice Hendry in Cadillac: the Complete History. Those stockholders gave Ford $900 and his uncompleted drawings, and they agreed to discontinue using his name. By August of that year, Ford hooked up with Malcolmson, and by July of the next year the first FoMoCo vehicles started rolling out the door.

The stockholders of the Henry Ford Company very nearly dissolved the company in Ford’s wake. They decided not to, however, after they approached Henry Leland, who demonstrated to them a path to profitability in automobile manufacturing. Also in August 1902, the stockholders and Leland reorganized the Henry Ford Company as the Cadillac Automobile Company, and by October Leland completed Cadillac’s first automobile.

Cadillac, needless to say, remains in business today.

Automotive history abounds with plenty of other examples of companies that booted their founders and went on to success — among them Oldsmobile, Buick, and Pierce-Arrow. And, it should be noted, automotive history positively bleeds stories of startups commandeered by autocratic founders that either never made production or hardly lasted a bee’s age.

Maybe Fisker — not to mention Musk and every other automotive startup founder angling to become the next Henry Ford — would do well to immerse themselves in the history of the industry they aim to disrupt.