The moving assembly line and the Model T
Did not invent the car, the assembly line or mass production — but put them together and changed what a factory was.
Photograph: Ford Motor Company. Photographic Department · Public domain · Wikimedia Commons
Ford's insight was not the motor car, which existed, but that it could be made cheap enough for the people making it to buy one. The Model T arrived in 1908; the moving assembly line followed a few years later and cut the time to build a car dramatically.
The price fell year after year as volume rose — the clearest large-scale demonstration of economies of scale ever run.
In 1914 he roughly doubled the basic wage. It is often told as philanthropy; it was substantially a response to punishing staff turnover on a monotonous line, and it worked — turnover collapsed and the cost of constantly training new workers with it.
The line made cars cheap and the work miserable. Both were consequences of the same design, and the wage rise was the price of the second.
'Any colour so long as it is black' is a joke about a real trade: every variant costs money. Reducing what you offer to a narrow standard is how unit costs fall far enough to open a much larger market.
The five-dollar day paid for itself because recruiting and training replacements was costing more than the rise. Most small businesses never calculate what losing a person actually costs and so under-invest in keeping them.
He was not competing for existing car buyers, he was creating buyers by getting the price low enough. Asking who would buy at half your price is a genuine strategic question, not a discounting one.
Ford published viciously antisemitic material through a newspaper he owned, in a campaign that ran for years and was influential. It is not a footnote and it should not be softened.
Commercially, the discipline that built the company nearly destroyed it. He refused to change the Model T long after buyers wanted variety and colour, and General Motors took the market by offering exactly what he would not. The same standardisation that created the advantage became the thing that lost it.