Henry Ford: Putting the world on wheels

This BBC podcast is supported by ads outside the UK. Over the past 25 years, technology has transformed our world in amazing ways. We've gone from dial-up modems to 5G connectivity and bulky PC towers to AI-powered microchips. Every day, innovators are redefining what's possible through it all. Invesco QQQ ETF has connected investors to the forefront of innovation access the future today with Invesco QQQ let's rethink possibility Thank you.

This is Victor McClure from the Common Sense Investing Radio Show. In my 30-plus years as a financial advisor, I've never seen higher income payouts than right now. For years, I could invest in an annuity for 10 years. The payout would be about $100,000 a year per million.

That's about 10% of what I put it in. And that's income for me and my spouse as long as we live. Now, I'm getting up to $150,000 per million over the same deferring 10 years. Just to get that 10% is only taking three or four years now. These higher interest rates we have temporarily are causing these historically high annuity payouts. As soon as they start lowering interest rates, annuity payouts will also decrease. Think about it.

Up to 15% guaranteed. In other words, every million gives me $150,000 a year in joint life income. My heirs still get the balance if something happens to me. Call us and we'll give you the exact guaranteed income amounts based on your situation. Call 972-960-8700. Again, 972-960-8700 or go to ilovemyretirement.com.

We're in Detroit, Michigan, a room in a Victorian-style factory. The year is 1906 and a secret project is underway. Drawings cover the blackboard, model parts and lathes clutter the table as people cram into the room. In the corner, in an old rocking chair, sits a man. He watches, directs, improves. They're designing a car, but it's not for the rich. This car is for everyone. And back then, this was nothing short of revolutionary. In God's great open spaces, in his words.

But what the men in that room don't yet know is they're assembling more than just a vehicle. They're setting the wheels in motion for suburbs, freeways, shopping malls, a new American way of life, a new American dream, if you will. And the man behind it all is Henry Ford. And this, this is where the 20th century begins. Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and find out how they made their money.

I'm Simon Jack. I'm the BBC's business editor. And I'm Zing Seng. I'm a journalist, author and podcaster. So just to be clear, Henry Ford didn't actually invent the car or even the assembly line. but he changed everything about how cars were made, who could buy them, and what they meant for America. They represented freedom and progress. At his peak, Ford's personal fortune topped $1.2 billion. Asked how it felt... to be a billionaire, he reportedly swore.

In 1908, he launched the Model T, one of the first affordable, mass-produced cars. So over 15 million of them were sold by 1927. By 1921, nearly 60% of the world's cars were Model Ts. Wow. People called them tin lizzies, and they really did put the world on wheels. He didn't create the moving assembly line, but he perfected it, cutting production time from 13 hours to 93 minutes. And that...

made cars affordable for the average worker, not just the rich. Talk about maximising efficiency. And also, did you know, Simon, that it was Ford who introduced the five-day, 40-hour work week? Really? Yeah, I mean, before it was a six day grind. It was a huge shift. The norm completely changed. You know, his influence helped push America from farm to factory. So it shaped the roads, it shaped the suburbs, plus, you know, motels, malls, gas stations, you know.

All of this kind of sprung up in the wake of his cars. Yeah, I bet there are some parts of the world which would wish... The 40-hour, five-day work week would be applied to them. I'm thinking of some factories in Asia, for example, where seven-day working weeks are fine. But it defined the working week and the weekend. He almost invented the weekend.

weekend. He almost invented leisure time when you think about it. His legacy though is a complicated one. He did increase wages but he crushed unions. his assembly lines became a symbol of modern monotony. In fact, they were mocked by Charlie Chaplin in that film Modern Times and turned into religion. in Aldous Huxley's dystopian novel Brave New World, set, and he said, Huxley said, 60,000 years after Ford. So that tells you how important this was.

And Ford also used his popularity to spread anti-Semitic conspiracies. In 1938, Germany's Nazi regime even gave him a medal for it. Blimey. But it can't be argued that Ford's impact was anything less than colossal. We found Stephen Watt's biography, The People's Tycoon, Henry Ford and the American Century, a very useful source, among others, for this episode. And as Stephen puts it, perhaps more than any other person, Henry Ford created the American Century. Talk about a pioneer.

So let's take Henry Ford from a zero to his first million. Henry Ford was born in Michigan in 1863, right in the thick of the American Civil War. It was a pretty turbulent time to come into the world. But despite the chaos around the country, Henry's life started off fairly comfortably. His family were successful farmers and he was the eldest of six kids. So you say comfortable, but it wasn't easy. So life on the farm meant long days and hard graft. And Henry, well...

He wasn't exactly keen on the chores. One farmhand even called him the laziest little devil on earth, to paraphrase in a slightly more polite manner. Young Henry was already looking for shortcuts. He believed things could be done in a better way. He also had a sharp sense of humour, the school clown in many ways. Though to be fair, the school was just a single room.

And that love of jokes stuck with him all his life. He was always pulling pranks from exploding cigars to elaborate setups where his staff pretended that Ford himself had disappeared. But everything changed the day a farmhand showed him this inside of a watch. So that tiny machine sparked something massive in Henry. He started taking watches apart, putting them back together, even making his own tools. And soon neighbors were just dropping off their...

broken watches for him to fix. On the farm, he also began inventing tools to make his life easier, like a clever contraption that shut the farm gates automatically. But then, when Henry was just 12 years old, a bit of personal tragedy, his mother passed away. and it left a deep scar. He later said it felt like a great wrong had been done to him. She'd been the heart of the family, always reminding him that the best fun follows a duty done.

quite the catchphrase I think I'm going to store that in the back of my head for when I have kids I kind of know what she means once you've done something good you kind of go ah Like, for example, I'll feel great after we've recorded this podcast because I'll say we've done a good job and now I can relax. And now we can play pranks.

Not long after her death, however, Henry had what he called an epiphany. So he was out with his dad and he saw something incredible, a steam engine rolling down the road under its own power, not just sitting on a farm powering machinery, but actually... moving henry said i remember that engine as though i had only seen it yesterday i was off our wagon and talking to the engineer before my father knew what i was up to years later he'd say

That was the moment that led him to automobiles. Yeah, because obviously steam trains, the idea that you could have a self-propelled vehicle was not new, but he clearly was beginning to get the inklings of how it could change the world, which it definitely did. But by the age of 16, Henry wanted to expand his mind in the city and learn all he could about mechanics. So in 1879, he moved to Detroit, currently known as Motor City.

It was an expanding industrial city known for stove manufacturing, metalworking and cigar making. It attracted migrant workers from all over the place, but it was nothing like the vast car manufacturing hub it would eventually become with Ford's influence. His dad had arranged for him to stay with his sister to get some work experience, though Henry's version of him leaving the nest saw him running off against his father's will.

Now, Ford hopped around a few different jobs from shaping brass valves at a machine shop for $2.50 a week, then at a shipbuilding factory. He actually did take a pay cut there to $2 a week to broaden his machining experience. Fascinating moment, that. Investing in... broadening your skill set by actually taking a pay cut. I've had countless people say, what you want in your early years is to invest in yourself, even if that means taking a short-term pay cut, and that can pay dividends.

as it did in the future. Good bad billionaire business tips for you there. Yeah. Well, three years later, he went home to help with the harvest on the farm and a neighbour asked Ford for help with the farm's portable steam engine. Although the machine frightened him at first, he soon fixed it and then quit his shipbuilding job to work and fix this particular machine that farms all over Michigan.

He enjoyed it so much he stuck around his hometown for the next nine years, first employed by the company who made the portable steam engine and then running a timber yard on some land his father gave him. When he couldn't work on the farm one winter due to snow, Ford enrolled in a business school to study mechanical drawing, bookkeeping and business studies. And home and the farm had other charms too. He met local girl Clara Bryant.

And the pair married in 1888 when Ford was 24, Clara was 22. Ford's nickname for Clara was The Believer for her admiration for his inventions. Not the first partner or spouse, we'll see, who had to believe fervently in there.

respective partners' inventions and mad ideas. Yeah, for sure. By 1891, the timber was gone from its land. So at 27, Henry Ford returned to Detroit. And that's where his obsession with engines took over. Yeah, he'd once repaired something called... auto engine a gasoline powered petrol powered machine he'd never seen before

Then just for fun, he built one of his own. But Ford knew if he wanted to go further, he needed to understand electricity because combustion engines rely on a spark of electricity. to spark it into life so he landed a job as a mechanical engineer at the edison illuminating company yes that edison light bulb man phonograph motion pictures

And yes, he will show up in person later in the story. It's so funny because I think this story really touches on things that you just hear about in movies and the history books. At first, Ford earned 40 bucks a month. then 45 after he fixed a generator at a substation, the same one that had killed the man before him. But luckily, Ford survived and a couple of years later, he was chief engineer making $1,000 a month, but he was on call.

24 hours a day. He even slept in his clothes, ready to leap out of bed when the next machine broke down. One colleague said of him, he always figured out some little improvement that he could make. He thought he could make them run better, make them use less steam, get more out of a ton of coal. But even then, Ford was building something bigger.

Yeah, it is something quite common to our billionaires, right? Rather than sit around waiting for the next great invention to hit you, falling from the sky, you're kind of constantly making tweaks. Yeah, because a lot of people would say, gosh, look at that amazing machine. I can't believe it works as well as it does. does some of our billionaires would say i think they could work better

And, you know, maybe James Dyson, for example, this vacuum cleaner. He said, my vacuum cleaner is blocked. Why is that? The vacuum cleaner isn't working. I'm going to redesign the vacuum cleaner. And billions ensue. Yeah. Now, by day, Henry Ford worked his job, but on the side, he used the plants machines for his own ideas.

And then came that unforgettable Christmas Eve. Ford had rigged up his first homemade engine, scrap metal, iron pipe, hardware store bits, all laid out in the kitchen sink and the ignition, a wire running from the ceiling light. It was perfect. And so while other families might have been gathering around the Christmas tree, Clara stood ready, dripping gasoline into the valve while Henry spun the flywheel. The engine shuddered to life. It worked.

So generations of home machinists have copied this engine ever since. I actually took a look at a YouTube video of someone who had basically replicated that machine. And I have to say... As a 21st century person looking at a machine, I have no idea how you would build it, let alone at the turn of the century before they'd even invented anything like this before. That's what always amazes me about engineering.

Someone's got to make the parts, right? And so how do you know that the right parts are going to be in the right place? And I suppose you just have to sort of reverse engineer from the parts you have.

and get something that works. And then once you've got something that works, you go backwards and say, well, if the part looked a bit like this, I don't know. I mean, you know, it's beyond me. I mean, it is interesting, isn't it? Because we've done so many tech billionaires and I can just about imagine how to code something. But when it comes to actually building something by hand, I just feel like there's something so...

astonishing about it. For sure. Ford, though, wasn't the only person tracing the dream. No, he wasn't. He'd seen early what you might call horseless carriages since he was a boy. And in 1893, the Derrier brothers made the first gasoline-powered in America. And that same year at the Columbian Exposition, Ford saw a Daimler gas engine mounted on a fire hose cart.

Too heavy for a bike, he thought, but what if... What if, indeed, later that year, Henry and Clara, now expecting their first child, moved into a bigger place on Bagley Avenue. Out back in a garden shed, and this is exactly what I expected from an inventor, to have a garden shed like Caractacus Pots in Chichi Chichi Bang Bang. He set up a workshop. A few mechanic friends from Edison joined in. Together they worked on his horseless carriage, their words, piece by piece.

A few months later in November, Clara gave birth to their only son, Edsel. I wonder which of these babies captured more of Henry Ford's attention. But three years later, just shy of the age of 33, Henry Ford stood in a Detroit crowd watching Charles Brady King roll by in a gas-powered vehicle, a big hulking...

1,300-pound machine crawling along at five miles per hour. And Ford, probably at that time, must have felt a nos in his stomach. It looks like someone's beaten him to it because he's been thinking of this for a long time. Crucially though, he didn't give up on it. Him and his crew scrambled to finish their own horseless carriage.

Clara started to panic about the cost of parts, but by the middle of the night on June 4th, 1896, it was ready. Ford's first car, the Quadra Cycle, more than halved the weight of Brady King's at just 500 pounds and hit two speeds. 10 and 20 miles an hour. One problem, though, it was too big to fit through the shed doors. So Ford simply grabbed an axe and hacked the door frame apart. No cheering crowds this time.

But luckily, his landlord was so impressed by his work, he let Ford rebuild the shed with bigger doors. And that is apparently the garage door was born. So Ford even rebuilt that very shed brick by brick for his museum years later because that outdoor space you have, the garage, the garage. didn't make any sense until you had a car-sized thing to put in it. You don't put horses in there, do you? And if you look up the picture of the quadricycle...

We're just being shown a picture of it here. I mean, it looks like one of those very early kind of Daimler, Mercedes-Benz type things, even bigger than bicycle wheels, with lots of spokes, so nothing like the tyres you would expect today, and a kind of...

chair sat up top that you would find in a sort of stagecoach or something like that. Yeah, and it doesn't have any walls. So, you know, it's not like a carriage. No. You're just sort of sat exposed to the wind. Yeah, it's definitely convertible. A very, very early version of a sports car. Now, following this triumph, Ford managed to get an invite to a banquet with big names in the electrical world, including his hero Thomas Edison. Someone mentioned to Edison,

That young fellow has built a gas car and Ford shuffled closer. Edison grilled him with questions, listened carefully and then slammed his fist on the table. Keep at it, he said. And that was all Ford needed to hear. Yeah, so Edison must have been a total hero because he sort of invented the electric light bulb and loads more beside. Ford knew his quadricycle was just, though, the beginning, but it wasn't built for mass production.

So he sold it for $200 to fund his next creation, something called The Runabout. With this improved design, he began raising money for a bigger goal, his own company. The Edison company offered him a promotion, but only if he gave up working on gas engines. Ford didn't hesitate.

I chose the automobile, he said. There was really nothing in the way of choice, for I already knew the car was bound to be a success. And that's interesting because our billionaires, there's loads of moments when basically they could have taken the cushy job. They could have taken the well-paid job, the very clear career path, working for...

probably America's most famous engineer at that time by miles, Thomas Edison, scientist and engineer, and saying, no, I think the future lies down a different path. And having the guts and whatever to go and do that is something that we've come across many times. Yeah, the courage to back yourself. I think is something that has popped up again and again in these stories.

So in August 1899, at age 36, and with financial backing, he launched the Detroit Automobile Company. With capital of $150,000, Ford didn't put in any money. His expertise was his investment. He moved on to a third prototype but progress was slow. They built, they tested, they discarded. Costs spiralled up to $86,000. A delivery truck was released in 1900, but it was heavy and it only sold 20 units. And by January 1901, the company had to fold.

Still, investor William Murphy gave Ford a second shot at this. He funded a new venture, the Henry Ford Company. But this time, Ford shifted gears. He focused on race cars instead of commercial vehicles. Earlier that year, he'd actually won a 10-mile race in Grosse Pointe and he wanted more. But Murphy didn't. He brought in a consultant to Rainford Inn.

And that didn't exactly sit well. Yeah, by March 1902, just three months in, Ford walked away from this new company with $900 and the plans for his race car. Murphy stayed behind. He renamed the company. You may have heard of this name. The Cadillac Automobile Company. I had no idea that Cadillac was a kind of leftover. A reject, a Ford reject or the rump of what was left when Ford left. But it's interesting about the race cars because quite a lot of... Molten.

technology and cars kind of gets tried on race cars first. And they're the cutting edge of that kind of technology. Okay, but before you feel too sorry for Ford having to walk away from his babies, keep in mind failure was the norm in the early auto industry. Between 1900 and 1908, over 500 car companies were launching, and most did not last two years. Reminds me of the dot-com boom, then bust. Basically, many tried, few succeeded, but some made it through.

Ford himself wasn't discouraged. He said, I was never happier in my life. I was learning something new every day. Yeah, I think that's a good approach to life, really. What did frustrate him, though, were the investors. He thought they were greedy and he vowed from here on in, my shop is going to be my shop. I'm not going to have a bunch of rich people telling me what to do. I'm sure quite a few people have had to deal with boards telling them exactly the same.

Exactly. The investors can wield a lot of influence. In October 1902, he broke the American land speed record with his racing car. One week later, he co-founded the Ford Motor Company with a coal dealer called Alexander Malcolmson and a group of his contacts, friends, family, anyone who'd chip in, basically. And by June 1903, they'd scraped together $28,000 in cash and $21,000 in promises to put in cash later.

Now this time, Ford had a solid design called the Model A and a smarter plan. Outsource the parts, assemble them in-house. It cost $600 to make and sold for $750 to $850, depending on the extras. And that left him a profit. $150 per car. That is a remarkably thin profit margin for a manufactured good. If you're going to sell a kettle for £20, you need to be building it for £2, basically. So they are...

clearly focused on price. And this is exactly what Ford's vision was, to try and bring the price into the orbit of the normal person. A car for every American. Yeah, exactly. In the first two months, they sold 195 cars. By March 1904, they'd sold 658 and made $246,000 in profit. So investors got their money back in under a year. Not a bad deal.

And by 1905, Ford Motor Company had 300 workers and 450 sales agents. When one agent asked about buying one car, James Cousins, who was Ford's right-hand man and finance guy, replied, how big's your town? You should order 100. And he did. Well, there you go. Ford respected this guy Cousins. He was different from the well-heeled people that Ford felt didn't get down and dirty enough to understand his business. So the two hatched a plan. In November 1905...

They created a secret company Ford Manufacturing to make parts and sell them back. to Ford Motor Company. So this is vertical integration, if you like, at play again. But profits on the sale of these parts would flow to them and not to Malcomson, the main funder of the Ford Motor Company. And they didn't tell Malcomson. about this sort of side hustle.

I mean, it's pretty shady business practice, I think. Yeah, for sure. So when Malcolmson found out, he fired off an angry letter and he started his own rival company. But this actually backfired. He'd broken his agreement with Ford and the board pushed him out. In May 1906, Malcolmson sold his shares.

all 225 of them for $175,000. Ford borrowed from Cousins' uncle to buy them and together they picked up more shares from Malcolmson's allies. And the result of all this chicanery was this. Ford now held 500... 185 shares. Cousins had 110. Everyone else combined had 305. So at last, Henry Ford had the deciding share for his own company.

And so we're back in that cramped Detroit workshop, the secret lab where Ford's team worked on his dream, a universal car for the masses, individuals and families alike. Cheap to make, easy to fix, rugged enough for dirt roads. And as luck would have it, just as they got going, a breakthrough, an English metallurgist introduced vanadium steel to Detroit. Now, this is strong, it's light, perfect for cars.

Ford rewrote his design. The Model T, a five-seater, now weighed the same as earlier two-seater designs. It had a 20-horsepower engine, hit 45 miles an hour, and could handle bumpy rural roads with its clever suspension. the Model T, nicknamed Tin Lizzy, hit the market for $850. Now, within days, Ford had over 15,000 orders. He had to freeze sales just to catch up.

Apparently, and this will tell you something about Henry Ford's character, when the Model T came out, he got his assistant to drive him past Malcolmson's factory as a kind of, hello, lad, how are you doing then? Perhaps the world's first arrogant drive-by. Very true. Well, he can take credit for that invention as well.

And the impact was unprecedented. Historian Charles Hyde said the Model T did more to shape the 20th century than almost any other invention. It paved the way for things like suburbs, highways, shopping centres. drive-through, whatever. I mean, you drive through some American cities like LA, for instance. It's a car city. No one's walking.

Anywhere. I tried to walk in LA once. It did not go well. You probably got picked up by the cops for being a weirdo. I mean, it was me and the weirdos on the sidewalk, I have to say. At the time, there were over 250 car makers in the US, but Ford built the most, over 10,000 in 1908 alone. They also made other models besides the Tin Lizzy, but they were mainly aimed at the wealthy. But in 1907, he launched the model.

Model N for $500, saying there are a lot more poor people than rich people. That's interesting, isn't it? Just realising that the real fortunes to be made are... the democratization of products or services like, for example, the internet, social media, what have you. It's when you've got a mass market means mass profit. And it was a really smart move because profits jumped from just over a million in 1908 to over $4 million by 1910. So although he often ploughed profits back into his company...

and kept his personal wealth quiet. I would say it's pretty safe to assume that by 1910, Henry Ford was a millionaire in an era when being a millionaire was a very, very big deal. But it would be his next design that would have... the biggest impact on modern America. Life's messy. We're talking spills, stains, pets, and kids. But with Anabay, you never have to stress about messes again.

At washablesofas.com, discover Anabay Sofas, the only fully machine washable sofas inside and out, starting at just $699. made with liquid and stain-resistant fabrics. That means fewer stains and more peace of mind. Designed for real life, our sofas feature changeable fabric covers, allowing you to refresh your style anytime. Need flexibility?

Our modular design lets you rearrange your sofa effortlessly. Perfect for cozy apartments or spacious homes. Plus, they're earth-friendly and built to last. That's why over 200,000 happy customers have made the switch. Upgrade your space today. Visit washablesofas.com now and bring home a sofa made for life. That's washablesofas.com. Offers are subject to change and certain restrictions may apply.

This is Victor McClure from the Common Sense Investing Radio Show. In my 30-plus years as a financial advisor, I've never seen higher income payouts than right now. For years, I could invest in an annuity for 10 years. The payout would be about $100,000 a year per million.

That's about 10% of what I put it in. And that's income for me and my spouse as long as we live. Now, I'm getting up to $150,000 per million over the same deferring 10 years. Just to get that 10% is only taking three or four years now. These higher interest rates we have temporarily are causing these historically high annuity payouts. As soon as they start lowering interest rates, annuity payouts will also decrease. Think about it.

Up to 15% guaranteed. In other words, every million gives me $150,000 a year in joint life income. My heirs still get the balance if something happens to me. Call us and we'll give you the exact guaranteed income amounts based on your situation. Call 972-960-8700. Again, 972-960-8700 or go to ilovemyretirement.com. You just realized your business needed to hire someone yesterday.

How can you find amazing candidates fast? Easy. Just use Indeed. Stop struggling to get your job posts seen on other job sites. With Indeed sponsored jobs, your post jumps to the top of the page for your relevant candidates. so you can reach the people you want faster. According to Indeed data, sponsored jobs posted directly on Indeed have 45% more applications than non-sponsored jobs. Don't wait any longer. Speed up your hiring right now with Indeed.

And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash P O D K A T Z 13. Just go to indeed.com slash P O D. K-A-T-Z 13 right now. And support our show by saying you heard about Indeed on this podcast. Terms and conditions apply. Hiring Indeed is all you need. So let's go from a million to a billion. In 1910, Ford opened a massive new factory to keep up with Model T demand.

But it's what he did with that factory that changed manufacturing forever. He refined the moving assembly line. Now, Ford didn't invent this idea. Ransom Eli Olds. Olds Motor Vehicle Company, who made the Oldsmobile, which you may have heard of in popular culture. They invented the assembly line to increase production in 1991, but Ford perfected it. So in 1913, with more space to play with, with this new factory.

They set up a conveyor belt for a single engine part. It wasn't perfect. They had to raise it to ease back strain. They added safety rails after an accident, but the results were instant. Assembly time, get this, dropped from 20 minutes to five. Then came even bigger moves, with help from Clarence Avery, his son's university engineering professor.

Ford applied time and motion studies across the whole factory. By August, even the car chassis was on an assembly line and assembly time dropped from 12 hours to get this. Just 93 minutes. That is huge. And of course what that did was slash costs. And instead of pocketing the extra profit, Ford passed it on to consumers.

The Model T, which cost $850 in 1908, fell to $490 by 1914, almost halving in six years. And by 1924, it was just $260. And the ripple effect of that was... massive cheap cars boosted steel rubber glass oil and helped fuel america's middle class so ford really didn't just build cars, he built an entire new economy. And it's often the mantra of economists back in the 50s and 60s, what was good for car companies was good for America.

And it's probably why the car auto industry has such a huge amount of power today. And still has incredible political capital. And what you get when you have a product like that, an aspirational product, which is suddenly becoming affordable. is that it has what economists would call a multiplier effect. So they need more rubber, they need more steel, they need more this, they need more that. And so that demand for the product is filtering into the...

the pay packets of everyone who's in the supply chain, and you get this multiplying economic effect. And therefore, that's the kind of thing... which generates an economic boom and raises living standards for everyone who's in the supply chain, not just the person who's buying it at the end of the day. Right. So people can suddenly go on holidays. They can buy nice food. They can get a better class of refrigerator.

And remember, they've got a weekend because he's instituted a five day, 40 hour week. So people have got leisure time too. You know, those kind of old school America, the best place to raise a family kind of, you know, like early 20th century style. It kind of reminds me of this period of American history, you know, where it felt like things were on the up.

But it wasn't all rosy. I mean, not for the workers actually on the assembly line. So imagine you're standing in place all day, tightening the same boat. Over and over and over again. I mean, most people couldn't hack it. In 1913, Ford hired over 52,000 workers just to keep 14,000 jobs filled. So he made a really interesting, really bold move.

He'd pay $5 a day. That was double the average wage. Headlines called it profit sharing with his workers. Ford said one's own employees ought to be one's best customers. But this wasn't pure generosity. It was pretty clever business.

It is expensive to keep hiring and training new staff. Ford later admitted the $5 day was one of the finest cost-cutting moves we've ever made. Fascinating. That's so interesting because you would think that actually cutting wages would mean that you... save more money therefore you make more money yeah but basically this guy was saying actually no

higher paid workers means a better product. But it was a very interesting, this whole thing about the monotony of the production line is something that came up in loads of psychological studies, which were done. People now think that to give more job satisfaction, they want people to have more input in the whole process. So you won't just be sort of whacking one bit of thing, tightening one screw, whatever. You have a much more holistic relationship with...

with the manufacturer of it, just to get away from something. So raising wages is one thing to do, but also the idea, the psychological effect of having a more holistic relationship with the thing you're producing rather than... Focusing on one washer, one screw, one panel, whatever. So by 1916, with 58.5% ownership of the company, Ford personally took home $35 million in profit. That is staggering. Huge amount of money.

But there's a catch to all this, and this is where sort of money and morals and whatever overlap. To get the full $5, workers had to live up to Ford's moral standards. Inspectors from the sociological department, that sounds really scary, checked their homes, spoke with neighbours, they looked for signs of good character, no drinking, no borders, clean houses.

putting money in savings accounts. Terrifying, really. I mean, that is sort of like running a factory like the Gestapo. Sounds like thought police. Yeah. I mean, most of the workforce at its Highland Park factory were foreign-born. So by 1914, 71% of... them came from overseas. And they spoke around 50 languages, so a very multicultural place. Ford launched a language school and workers learn English and

what was called the American way of life. And graduation was actually a very strange performance, a real kind of play at assimilation. Workers entered a giant... melting pot in their native dress and then they re-emerged in suits waving American flags. It's actually quite a bizarre spectacle. I mean, that is sort of the American dream cashed out. And part of the American dream is...

exchanging your original identity for a new economic identity, a new citizen identity. And that, in a way, is like going through the sheep dip of the American dream. Do you know what I mean? Yeah, that is so true. And I also think, you know... This is a time when everything was being worked out about America, right? Who got to be American? What made them American? And for Henry Ford, it's being clean living, working in the factory, on the assembly line, getting paid a fair wage for that.

time and also being willing to please subject yourself to this quite weird charade of americanism it's quite interesting yeah but let's get back to the business

Because when people see profits like that being made, other people want in. There's a fight for the pie of these profits. And in 1916, the Dodge brothers... Original investors with Ford Motor Company wrote to Henry Ford complaining about the size of stockholder dividends, the amount of money they were seeing. paid back to them for their original investment. They put in $10,000 back in 1983. Over 13 years, they'd seen $5.5 million in dividends.

But the Ford Motor Company had over $50 million in surplus sort of sitting around and they felt 75% of that should go back to the shareholders. Ford didn't agree. He wanted to reinvest in lower car prices and growing production. And after they traded letters, the Dodgers filed a lawsuit. For Ford, it stung. They actually filed it the day after his son Edsel's wedding, which the brothers had attended as guests. So talk about...

separating business and pleasure. Yeah, exactly. How are you doing? Oh, well, congratulations on the day. And then next day, boom, read this. Three years later, the Michigan Supreme Court sided with the Dodgers. So Ford had to pay out $20 million in dividends.

And Dodge versus Ford became a landmark case. It's still taught in law schools today as a defining moment in corporate law. And if I might plug another series of my own, there's something called The Prophets of Profit. Yeah, very good. And the Ford versus Dodge thing about...

what shareholders should be allowed to take out was absolutely key to this idea that Milton Friedman came up with, which was that a company's only duty is to maximise the value for its shareholders. It has no other purpose in life. argument still rails to this day. And this was a very key moment in that whole debate. Ford was not a fan of these profits of profit, though. He called shareholders parasites and idle drones. The public loved it. One paper called him a great...

And in fact, his popularity in this sort of political... profile caught the attention of President Woodrow Wilson, who urged him to run for the Senate in 1918. Ford agreed, albeit reluctantly, he refused to spend a cent on campaigning. but still only lost by 4,500 votes. He in fact tried for president in 1924, but when that didn't work out, he gave up on politics for good.

But Ford's beef with the Dodge brothers was about to take a devious turn. He's not done with them yet. Nope. In 1918 at 55, Henry Ford announced he was stepping back and handing the company to his 25-year-old son Edsel. The same guy who got married at the wedding that the Dodge brothers attended. So the Dodge brothers saw this as their moment. Maybe they would finally get more say in the company. But then Henry Ford pulled a move no one saw coming. He said he was starting a brand new company.

to make even cheaper cars. And shareholders panicked. They thought their shares would sink as profits would fall. And they started selling shares fast. But... Ford's new company was a bluff. It was a trick. He quietly scooped up 8,300 shares at bargain basement prices, using brokers to hide what he was doing. And by July 1919, the deal was done. Ford had spent $106 million fortune. Most of it borrowed, though, and bought back.

The whole company. Between Henry, his wife Clara and Edsel, they now owned it all. And just like that, Henry Ford was fully in charge. The Dodgers were out. No more investors to answer to. This does not sound exactly legal to me. I don't think it would be these days. I mean, that would definitely count in my humble opinion and my limited legal experience.

I suppose, watching markets for a long time. That would count as market manipulation, 100%. Wouldn't get away with it right now. Wouldn't get away with it right now, no.

So while he was still running his Highland Park factory, Henry Ford was already planning bigger things. He bought 2,000 acres near the River Rouge, aiming for more control over raw materials. Vertical integration strikes gain. By 1917, the site was producing boats for World War I. By the early 1920s, Ford had added a steel foundry, a power plant, even bought land for coal, timber and ore to supply the factory. And he didn't stop there. He owned a railroad and lake steamers to move.

materials. There was a factory for every single component on site. Tyres, glasses, tools, paper. There was even a soybean conversion plant to turn soybeans into plastic auto parts. I could just imagine a montage of this place, which sort of... like something a visual depiction of the american dream and industrialization it's like everyone walking around looking happy taking the soybean taking the rubber to do this it's sort of watching an economy grow in real time yeah with that hokey america

and narrator voice going over it. Yeah, Tom Hanks, maybe. Yeah, exactly. Sorry, Tom. This meant that by 1921, Ford was cranking out a million cars a year. By 1925, that number doubled and the price of a car with no add-ons dropped. just $260. When it was fully finished in 1928, the Rouge plant was the world's largest factory. One and a half miles wide, 93 buildings with 120 miles on conveyors and over 90 miles.

of railroad track. That is enormous. It's huge. It's like a city, isn't it? And this is where that iconic blue Ford logo that we're all so familiar with now was born. It adorned the Model A, which despite the depression... They'd sold over 5 million by 1931. Ford was now making so much profit from parts sales that some of his cars were nearly sold at cost. And by the 1920s, people were not only maintaining their Ford cars, but also buying kits to turn them into cars.

to tractors, snowmobiles, mobile sawmills. They were even swapping the tyres for rail car wheels to use them on railroad. So really just a very customisable piece of tech. Almost like one-stop shop for engineering stuff. His Model T is credited with sparking, in fact. The automotive aftermarket industry that provides parts, services, repairs for vehicles.

after they're initially sold by the manufacturer. Today, this is worth nearly $500 billion. And actually, there are some industries which are entirely dependent on this. For example, airplane engines. You basically sell them at cost, knowing that you'll have to maintain those engines for 20 to 30 years, and they have to come back to you for every other spare part. So actually, you kind of get the engine for free.

But the after service, the aftermarket, that's where companies make their money. He kind of invented that. Wow. Now, it's hard to say exactly when Henry Ford was a billionaire, but in 1927... Ford was one of the only 10 corporations in the US valued at a billion dollars or more. And he was one of three shareholders. Don't forget the rest of them were his family. And by 1930, Time Magazine estimated the US Ford company could be worth up to $2.6 million.

billion dollars. So by the late 1920s, we can safely say Henry Ford is officially a billionaire. So the roaring 20s have been good to Henry Ford. They've got the flapper dresses on, they've got Harlem renaissances happening. Exactly.

But then, of course, what followed the 1920s is something we all know, a seismic event in American history, the Great Depression. It began in 1929, triggered in many ways by the Wall Street crash. But... In response to that, Henry Ford raised his $5 a day wage to $7 a day to help his workers fend off the effects of that. The Rouge plant was in full swing in the early 30s with 100,000 workers and a car rolling off the line.

every 49 seconds. So pretty resilient in the early days. I can't think of a company that raises its wages to help people weather economic crashes. Economic disaster. Raise the workers' wages is not what you hear from corporate America these days. No, it definitely isn't. But even the mighty Ford Motor Company couldn't escape this crash. So between 1929 and 1932, he had to lay off nearly half his workforce.

anyway yeah and the competition was catching up by 1929 General Motors GM had overtaken Ford as the leading car manufacturer in the US and GM success came from stylish, more diverse models. They had yearly updates. Flexible financing, massively important to the General Motors Acceptance Corporation. A lot of people think that GM is basically a bank, which also makes cars. Right, so they kind of loan you a bit of money so you can buy their cars. Exactly.

so and they became one of the biggest in a way banks in america but these are all the things that ford's model t wasn't and ford wasn't doing and ford's stubbornness to not adapt to changing consumer desires. And his tight control of the company didn't help either. Perhaps if there had been some outside shareholders. To keep him in check and see the bigger picture, Ford wouldn't have seen such a decline as he saw in the mid-early 1930s. There is a view that

actually being totally in charge of your own company, sometimes not always good. You need some people like a board of directors, shareholders, just say, are you sure you got this right? to make sure you've not got the blinkers on. And, you know, there was even worse things. So Ford's resistance to labour unions actually led to violent clashes. So there was the Battle of the Overpass, which happened in 1937. His security teams actually violently...

attacked union organisers and it tarnished his once golden reputation. Remember, there was once a time he was running for office. Yeah. And here's a bizarre chapter in the story, perhaps something that's emblematic if Ford's short-sighted vision at the time. Ford decided to build an industrial utopia in the Amazon called Fordlandia. He bought land to produce rubber for trees. He offered workers cars and he threw in an 18-hole golf course.

In the jungle, as you do. But none of that actually appealed to the local Brazilian workers and this so-called paradise eventually was absorbed back into the jungle before being sold back to Brazil.

That is like something of the stuff of a Wes Anderson film, I think. Yes, definitely. You can really imagine that kind of particular episode in Ford's life being brought to screen. For sure. Now, Henry Ford died on April 8th, 1947 at the Grand Old Age. of 83.

His son Edsel had been president of Ford Motor Company during the 30s and 40s, but after Edsel's death from stomach cancer in 1943, Henry had to take the reins back again once more. As Henry's health declined, his grandson Henry Ford II took... over in 1945. And by 2015, the Ford family was worth an estimated $2 billion. But they're very private, so not very much is known about their wealth today. A fascinating story of...

And like some of the things we've discussed in our billionaires that are alive, You catch the economy, society at a moment of change. The invention of the automobile, whoever was going to dominate that, not even have to dominate it, but be a big player in it.

was going to be stupendously rich because it was one of the biggest revolutions, evolutions, along with railroad and the internet, for example, lots of our billionaires came up. This was one of those moments. And you're probably thinking, I mean, at least I certainly think that maybe... That's the reason why so many people are circling AI now. They all want a piece of a pie. Yeah, yeah. And actually, if you think about the supply chains for the automobile industry.

That is the subject of very vigorous political debate and conflict. Right now, automobiles are still emblematic of a nation's industrial competence. And Donald Trump has chosen the automobile industry to be a vehicle for demonstrating his Make America Great Again, America First. It still stirs very strong political, economic emotions. Yeah, and understandably so because it was there at the very start of the American century. Yeah.

So we've now come to the part of the show where we rate our billionaires out of categories of wealth, controversy, giving back, really to kind of give an overview of who they are. Then this season, we put the power in your hands, dear listeners, to decide if they're good, bad, or just another billionaire. So on wealth from one to 10, a lot of Ford's wealth is estimated.

because he and his wife wholly owned Ford until his death. It's thought his fortune was around $250 million when he died. He left that to a private trust. But he was one of the richest people in the world. I mean, billionaires in this era. are few and far between. There's almost no non-American ones. If Rockefeller was 10...

I'm going to give Ford a nine. Yeah, I think nine out of ten. I mean, you have to be pretty rich to decide you want to build a city named after yourself in the Amazon. Yeah, that's Fordlandia. I mean, that sounds like a terrible idea. So, OK, two solid nines on wealth. Controversy, plenty of it.

Yeah. So, you know, we mentioned Henry Ford's anti-Semitism at the start of the show. Well, it continued through the 1910s and 1920s. He was notable for endorsing and then even publishing conspiracy theories about Jewish people. notably through a series of pamphlets called The International Jew which helped spread incredibly harmful stereotypes and false claims. Yeah, and he uses wealth to purchase the Dearborn Independent newspaper in 1918 and began using it to publish anti-Semitic views.

With Ford's funding, its initial circulation of 70,000 rose to a peak of 900,000, making it one of the largest newspapers in the US. Amazing. And you remember that medal that we talked about? In 1938, the Nazi regime awarded Henry Ford the Grand Cross of the German Eagle, the highest award granted to foreigners by the German government. I mean, that's amazing, isn't it? When you think badge of honour. This is the diametric opposite.

Exactly. But he had loads of legal battles. He had libel cases, public boycotts. Eventually, they forced Henry Ford to end his anti-Semitic campaign in 1927 with a public apology saying he would retract his lies. and that his newspaper would no longer publish articles reflecting upon the Jews. So clearly a man with a staggering anti-Semitic prejudice. Meanwhile, he didn't just have that. Obviously, there were the devious business practices that we talked about.

you know, fooling his investors like the Dodge Brothers, you know, that fake new company. He crushed the unions. Yeah, that fake new company thing was quite a stunt to pull and would, I think, pretty sure be illegal today. But it is interesting. that both the people he kind of left in the dust both did all right themselves dodge became quite a successful guy

Cadillac. Well, yeah. But, you know, it's not where they ended up. It's how they got there. And, you know, Henry Ford tried his best to stop them from getting there. Controversy. Oh, cool. Hi. Hi. You go first. I would give him a 9 out of 10. Fine, I'm with you. 9 out of 10. I mean, you know, obviously he's not an arms dealer like some of our other billionaires, but, you know, publishing a newspaper just to circulate your views and then being...

Pretty bad to your business partners. That score is quite highly. On the other hand, looked after his workers and the onset of the Depression raised their wages from $5, $7. I think there's, you know, there's, you know, there's, he's a complicated character. Yeah, there's shades of grey. So you're a nine. I'll go nine as well. Okay. Well, what about giving back the category where he could redeem himself?

Interesting. Slightly mixed messages on this one. Didn't seem to think much of the concept of charity, but his actions belied that view. Yeah. So he said, I believe there's very little occasion for charity in this world. Well, most certainly business and charity cannot be combined. The purpose of a factory is to produce. He also said the moment human helpfulness is systematized as organized. is to commercialise and professionalise

The heat of it is extinguished and it becomes a cold, clammy thing. But Ford's archives suggest that between 1917 and his death in 1947, he'd given nearly $37 million to charitable organisations. But little caveat, $16 million of that amount considered to be deductible for tax purposes under the Federal Income Tax Code. But still not a small amount to give away. No, especially between 1917 and 1947.

$37 million is a lot of money. That's more than a million every year. Yeah, I think I've even been to the Ford Foundation, which does some pretty broad... reaching work. I think it was mainly the idea of Edsel, his son, who died early and Henry had to take back over again. I'm going to play this right down the middle because there's quite a lot of money that's come out of the Ford family to charity. So I'm going to give it a...

Okay, a five out of ten from you. And I think a five out of ten for me. Power and legacy. This is the interesting one, I think, for me of this particular case. It's, I would say, hard to overstate, really. The idea of trying to democratise a product, so a car was just for rich people, and then he says, no, I wanted to make it for everyone. And obviously he wanted to make money by selling it to everyone, but also he created the idea of...

aspirational American middle class who could basically have things like cars, washing machines. He's so part and parcel of the sort of American dream. also in the manufacturing jobs he created and the fact he paid his workers pretty well. I mean, I think he stands way up there with like a nine. Yeah, I mean... I can't help but keep going back to the architecture of America itself. You know, obviously there are cities like New York, very walkable places, but...

When you go out to places like LA, Chicago, you know, the middle of America, these are car cities. You cannot get anywhere without a car. Entire suburbs and malls and drive-thrus are built on the basis that you are on. four wheels and not your old two legs and that is remarkable and it's still the case you know a hundred years later that is still very much the case interesting that tesla calls their premium model the model s

Called it Model S. I mean, it's a direct reference. Very clever. I would say, I would actually go even higher and say maybe it's a 10 out of 10. Maybe you're right. Okay, I'm going to go with you. For example, Ford was cited as businessman of the century by Fortune magazine in 1999. So on the basis of that, it's a 10. Yeah. 99 years later, he's still considered up there as the very best.

So those are our scores. And with that, it's over to you. You've heard us rate, motor man, Henry Ford in our various categories. But the final judgment is your call. We want to know whether Henry Ford is good, bad or just another billionaire. So please share your thoughts and judgments with us by emailing goodbadbillionaire at bbc.com or drop us a text or WhatsApp or voice note on 001 917 686. That's goodbadbillionaire at bbc.com or 001 917 686.

Listen, we love getting your emails. Here's a good one that came in. From Sheridan Scott, who says, I've been listening to your podcast for a while now. Absolutely love it. Simon and Zinger, great. Both bounce off each other and don't mind questioning each other's opinions with the utmost respect. But...

They are very informative and don't take themselves too seriously. I do like how they both educate each other on certain subjects. Keep up the great work. Yeah, I learn a lot on these podcasts. I mean, same, but none of it has made me very rich, I'm afraid. We love getting these messages, so please send some more to good... goodbadbillionaire at bbc.com. Let us know what you think about Henry Ford and the rest of the billionaires in this special mini-season, Good, Bad, Dead, Billionaire.

So who is our next good, bad, dead billionaire? Maybe the first weird billionaire we've ever had on the programme. A man who was so eccentric and left such a trail of... romantic devastation in his wake that he created an archetype. He did. It is Howard Hughes. You will probably know him from the famous film by Martin Scorsese, The Aviator, where he indulged his passion for aviation.

which basically soaked up quite a lot of his extreme wealth. And he also spent tons of money on a retinue of Hollywood A-list actresses. Yeah, well, that is Howard Hughes, who has led quite the life. Famous germaphobe, recluse. All round oddball, but a rich one. That's Howard Hughes. So listen out for his story on Good Bad Billionaire.

Good Bad Billionaire is a BBC World Service podcast. It's produced by Louise Morris with additional production by Tamsin Curry. Paul Smith is the editor and it's a BBC Studios audio production. For the BBC World Service, the senior podcast producer is Kat Collins. commissioning editor is John Monnell. And if you enjoyed it, do tell a friend.

You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. Stop struggling to get your job posts seen on other job sites. With Indeed Sponsored Jobs, your post jumps to the top of the page for your relevant candidates so you can reach the people you want faster.

According to Indeed data, sponsored jobs posted directly on Indeed have 45% more applications than non-sponsored jobs. Don't wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash P O D K A T Z 13. Just go to indeed.com slash P O D.

K-A-T-Z 13 right now. And support our show by saying you heard about Indeed on this podcast. Terms and conditions apply. Hiring Indeed is all you need.