Henry Ford perfected mass-production with the assembly of his 1908 Model T. As his technique got better, prices of the car plummeted.
When announced in 1908 the price of the Model T Ford was $825, or $26,211 today (£21,284). Within five years the Model T’s price had halved. By 1920 it had halved again. Then by 1925 the price was down to $260 ($8,260 today).
How did Henry Ford do it? And what did a Chicago abbatoir have to do with it? Read on for more…
The price of the Model T Ford back then has been adjusted for inflation. The dollar has had an average inflation rate of 3.08% per year between 1908 and today, producing a cumulative price increase of 3,077.13%.
That means that today’s prices are 32 times higher than average prices since 1908, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 3% of what it could buy back then (source: In 2013 Dollars).
So the U.S. dollar has lost 97% of its value since 1908!
The price of new motor cars in 1908 plummeted like today’s electronic goods. The price fell steadily during the car’s life. And Henry Ford’s secret was this: he mastered the art of mass production.
Early cars had been made by hand by craftsmen used to selecting and adjusting parts to make a perfect fit. This fettling took a lot of time. But Ford had always wanted to increase the productivity of his factories.
To build the Model N, his previous car, he had the constituent parts placed in a row on the factory floor and the skeleton car dragged along the row on skids and slowly assembled.
Similarly, at first the Model T chassis was loaded onto a three-wheeled dolly and wheeled along the line as it was built.
Ford thought he could do better than that. While studying the dismemberment of animal carcasses on moving conveyor belts in a Chicago slaughterhouse, it struck him that he was trying to do much the same thing, but in reverse.
The meat canning industry also used continuous processing. So did the breweries and bakeries.
So Henry Ford broke down the assembly of the Model T into 84 discrete steps and trained each worker to perform just one action. He hired a time-and-motion expert to study every process and to refine it.
In 1913 he added his first moving assembly line: the fitting of magnets into flywheels. By 1914 assembly lines building complete cars were travelling at six feet a minute. This reduced the time to build one Model T from 12 hours to one hour 33 minutes and enabled the price to be cut in half to $440. Ford had brought the work to the workers.
However, the workers didn’t like it. Ford noticed that his men were leaving to join his competitors, and staff turnover rose 400%. They complained that they now found the work boring as they were performing one repeated task, over and over again instead of building a whole vehicle.
Also, they loathed the strict discipline of the moving assembly line, where if you missed a task you found yourself struggling to complete it while barging into the next group of workers. Cars ended up missing vital parts, and men went home exhausted.
Charlie Chaplin satirised the dehumanising nature of the assembly line in his film, Modern Times. Distracted by a fly buzzing around his face, he struggles to keep up with the moving line, crashes into his fellow workers and causes chaos.
Cars have never been so cheap since. Added complications such as front brakes, electric starters, batteries, airbags, anti-lock braking, safety belts, heating etc have all increased costs.
So today the cheapest car you can buy in the States today is the Chevrolet Spark at $14,595, about twice the price of the 1925 Model T Ford, adjusted for inflation (source: Car and Driver).
Did you know?…
…that there was once an American car on sale for just $125, or $1930 today? Read about the Smith Flyer here