Ford's Automotive Revolution

Written by: Liam Selfors

The Economic Impact of Henry Ford's Assembly Line

In 1913, Henry Ford began producing automobiles in mass quantities using a conveyor belt assembly line system. This more efficient production method allowed automobile production to improve by not only significantly speeding up the process which allowed the industry to supply more automobiles, but also limiting the production costs, and simplifying jobs. The affordable car revolutionized the world, redefining how houses were designed (with a garage), inspiring artists and entertainers with the assembly line and the modern car, and destroying unemployment creating jobs in factory management, civil engineering, road working, and car maintenance.

When considering Henry Ford’s implementation of the assembly line from a supply and demand point of view, the explosive and speedy production of automobiles increased the supply of automobiles significantly, which greatly increases the nation’s GDP while decreasing the price of cars. According to history.com (http://www.history.com/this-day-in-history/moving-assembly-line-at-ford), Henry Ford’s factories decreased the required man-hours per car from about twelve and a half hours to a mere ninety three minutes, and decreased the price of one car from $850 to $300 which is an unbelievable 65% decrease in price. Furthermore, the cost of wages to workers decreased because they only had to specialize in one part of the creation of cars rather than needing to understand the entire system of the car to oversee its production from start to finish. The lower wages decreased the production cost of the automobiles which further drove down the price. With a high supply and a low price, the demand instantly rose to meet production with the automobiles newfound affordability as well as its existing functionality.

Side note: To put the whole $300 price tag into perspective, you may be thinking: “Wow, $300 is not a lot of money at all! But, I know that because of inflation money went a lot further back then.” While you are right, I think you will definitely be surprised to hear that when adjusted for inflation, Ford’s model T assembly line cars would sell for about $3500 today. Brand new. I don’t know about you, but I would jump on that price any day.

With cars available at unbeatable prices, everyone began financing cars. Although this did play a role in creating the debts that drove the nation into the great depression, it shaped the early 20^th century and still defines our modern society. Houses were now designed with garages to protect the cars. Gasoline became a necessity for everyone. Travel was becoming more affordable and practical. Horses were becoming obsolete. Time that was spent walking was freed by speedy automobiles which allowed peoples’ time to be spent more efficiently and economically. Automobiles modernized shipping and trading. Without automobiles our world would look entirely different.

Ever heard the name Charlie Chaplain? One of his most famous short films, The Assembly Line, (can be viewed here:https://www.youtube.com/watch?v=NT-mVVprnbs) was a critique of the assembly line production. Ever heard the name Dale Earnhardt Jr? He might not have a career if cars didn’t exist. Ever seen that hilarious movie Talladega Nights? Well, it wouldn’t even have a premise if it weren’t for Henry Ford’s industrialization of the automobile. Aside from NASCAR and Hollywood, automobiles inspired paintings, photographs, works of fiction, and other works of entertainment. Economically, the entertainment industry added even more to the many successes, with surprisingly widespread influences, of the globalization of the automobile.

Flash forward to modern day, we don’t use exactly the same system as Henry Ford used to revolutionize the world. In 1980, we adapted Japan’s improved manufacturing system called “lean manufacturing” which basically followed the same idea as the assembly line, but minimized production costs and maximized economic benefit. Overall, the incredible production surge of automobiles, enabled by the assembly line, not only created a massive amount of economic growth in 1913 America, but also affected the global economy and indirectly created jobs for the next century to come. Additional sources: http://mitpress.mit.edu/books/americas-assembly-line,http://history1900s.about.com/od/1910s/a/Ford--Assembly-Line.htm, http://www.ideafinder.com/history/inventions/assbline.htm