The "Universal Car"
Although a lot of academic types try to make entrepreneurs of the late nineteenth and early twentieth centuries sound like ogres, calling them "robber barons" and worse, they actually were a boon to the U.S. economy and a blessing to the average American worker and family. And we are still feeling the effects of their efforts today. Just one example is Henry Ford.
Ford had been working for some time to develop an automobile to compete with the other early car manufacturers, but he didn't have a success until October 1, 1908, when he introduced his Model T for sale to the public. He priced it at $850 ($27,000 in today's money) at a time when the median family income in the United States was only $450-500 a year. It simply wasn't affordable at that price.
But Ford was determined to make his car more affordable, something that average Americans could afford. He began implementing his assembly line methods of manufacturing and saw his production costs go down dramatically. He reasoned that he could in that way mass produce his cars, drop the selling price, and sell more cars, thereby reaping more profits in the long run. By 1927, he had lowered the price of a Model T to $260, when the median family income had risen correspondingly to $1200-1400 a year. His car was now affordable for most people.
Other car makers, in an effort to increased their sales, encouraged customers to make credit purchases, but Ford hated credit. Instead, he experimented with a method similar to the layaway plan that department stores had begun using. Customers who wanted a Model T could deposit $5 to $10 a week with a Ford dealer, setting aside, or saving, for the purchase. They didn't actually take possession of the vehicle, however, until the full amount was deposited. But that enabled even more people to afford to buy a Ford.
Ford turned out 15 million of his Model Ts between 1908 and 1927. By 1914, only six years after its introduction, Ford was selling more cars than all the other car makers combined. By 1918, half of all cars sold in the United States were Fords. At the height of Model T sales, Ford was producing a car every three minutes, or between 9,000 and 10,000 a day. So popular and affordable were Model Ts that between 1917 and 1924 Ford bought no advertising. He didn't need to. The car itself and word of mouth were all the promotion he needed.
The Model T had a four-cylinder engine that produced 20 horsepower and a top speed of 42 miles per hour. (As a reference, that horsepower, phenomenal at the time, is less than that produced by my John Deere X350 riding mower.) Breakdowns were common for all cars in those early days, but Ford included a tool kit with each car, and the mechanics of the car were so simple that anyone could make necessary repairs for most problems that they encountered.
Ford allegedly told his management team, "A customer can have a Model T in any color he wants as long as it's black." That might be apocryphal because between 1908 and 1913 black wasn't even an option. They came in only blue, gray, green, and red. By 1912, they were being painted midnight blue with black fenders. The all-black policy was started in 1914 and lasted until 1925, when other colors were reintroduced.
How things have changed since the Model T first rolled out! Customers' choices of car models, colors, and features are enormous, but so are the prices. Hardly any average person can afford to buy a car, even a used one, unless on credit. And the length of credit terms keep being extended to the point of nearly outdistancing the serviceable life of the car. And cars have become so complex that even mechanics are often baffled when it comes to making repairs. Car repairing itself is big business today. Yet, how far we've come!
Ol' Henry would be flabbergasted. Or would he be outraged?
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