OT - Was Henry Ford a more astute (shrewd) businessman than we give him credit for?

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Model T Ford Forum: Forum 2014: OT - Was Henry Ford a more astute (shrewd) businessman than we give him credit for?
Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Friday, June 13, 2014 - 10:55 am:

In 1905 Edward S. Huff (Spider) filed for a magneto patent with Henry Ford named as the assignee. Henry Ford and Huff had been associated for a few years, Huff having been involved with Henry Ford and the Sweepstakes and 999/Arrow racers.



In July 1905 Huff applied for a patent on a magneto. A person I'll call an "electronics whiz" has reviewed the specs of this magneto, and said it was a forunner to the modern CDI, and that it was unlike other high and low tension magnetos of the day. He also said the spark would be very high voltage, and to be careful testing the mag. By 1906 this Huff designed magneto is built by Holley Brothers and used on the Ford Model K (we currently have the original Holley magneto for our Model K, and it is being rebuilt).

This begins with a copy of a letter from George Holley to Henry Ford, dated December 14, 1905.






George Holley discusses the problems with the Lacoste and Simms-Bosch magnetos experienced by Thomas and Pierce. He also mentions Queen car co. in the letter.

When I first read this letter last year, I thought Holley was trying to convince Henry Ford to use the Holley magneto on the new Model K. It didn't make a lot of sense to me, because by this late date (December 1905) the first Model K prototype is built, and advertising already says the Model K will have magneto ignition. I also knew this was the Huff/Ford magneto, patent applied for in July 1905. So, why was Holley trying to convince Ford to use the magneto Ford (Huff) had already designed? Ford Motor Company had already paid the equivalent of about $50,000 in todays money to develop the magneto.


excerpt from FMC fiscal year 1905 report showing magneto expense:



And, Henry Ford was the Assignee on the patent, so, if I understand it correctly, Henry Ford already "owned" the rights to this magneto, why was Holley now trying to convince him to use it, instead of the Lacoste or Bosch mag?

Finally, the light bulb came on. Holley wasn't trying to convince Ford to use the magneto. He was out peddling it to other manufacturers, and reporting back to Henry Ford. I now think Henry Ford possibly (probably) had a financial interest in the magneto as patent assignee, and he and George Holley were in business attempting to get other automakers to use it.



This is one of three business moves Henry Ford made between 1905 and 1907 that, for me, shed an entirely different light on his business acumen (my opinion). While a small item, this seems to indicate Henry Ford had his eye on making money, not just designing and building cars, as I usually think of him in the early years.

Holley would sell the Holley-Huff magneto for several years, and I assume Henry Ford was paid some amount of royalty from those sales, maybe even on the magnetos used on the Ford Model K.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Jim Patrick on Friday, June 13, 2014 - 02:17 pm:

Henry was a great and shrewd businessman in the early years that got Ford started, consolidated his power and got the FMC as far as he was capable of taking it with his, megalomaniacal closed mindedness, ignorance, prejudices and many flaws.

Had he been forward looking and not such a narcissistic, power mad, egomaniac, he would have recognized the genius of Edsel and his capability to take Ford far into the future, but Ford mistook Edsel's meekness and and respectful refusal to stand up to his father as weekness and was relentlessly tried to toughen him up, which only served to cause Edsel withdraw. I think that, had Henry passed over the reins of leadership to Edsel, there is no limit to how far the FMC would have gone, but, because he didn't, Edsel's genius was wasted as he languished in the long shadow of his cruel, controlling, tyrannical Father, who almost destroyed all he worked to build. Jim Patrick


Top of pagePrevious messageNext messageBottom of page Link to this message  By Dennis Seth - Ohio on Friday, June 13, 2014 - 08:26 pm:

Aw come on Jim tell us how you really feel about old Henry. :-)

As always good reading Rob.


Top of pagePrevious messageNext messageBottom of page Link to this message  By John F. Regan on Friday, June 13, 2014 - 09:08 pm:

Jim:

I agree with your assessment of Henry. I think as an industrialist he was a success in spite of himself but as a human being he was a total flop. I often wonder what the automotive market might have been had Henry come out with the Model A in late 1923 or early 1924. I suspect GM may not have happened and Ford may have dominated the market for decades in much the same way as AT&T dominated telephony until the courts broke it up. Had it not been done legally it might never have happened. It was a total monopoly but for a long time we did have the finest telephone system in the world - far and away.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Craig Anderson, central Wisconsin on Friday, June 13, 2014 - 11:33 pm:

I've driven a 1920 Chevy Coupe and own a '29 Model A.
GM would have had nothing to worry about.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Gary H. White - Sheridan, MI on Saturday, June 14, 2014 - 10:52 am:

Jim, Kinds of sums up my adulation of Henry. While I enjoy the Model T and all it did for the people of this country, and the rest of the world, I don't have a picture of him on the wall. He was unjustly ruthless to many and did much harm to undeserving people.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Ricks - Surf City on Saturday, June 14, 2014 - 11:06 am:

I think it was Spider Huff who Henry cheated out of royalties by blackmail. Something about a girlfriend..

In spite of promises, did Henry pay a royalty on anything? The heirs of the planetary patent holder have been on here, still waiting for their promised dollar a car.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Kenneth W DeLong on Saturday, June 14, 2014 - 11:12 am:

Do we/you judge Henry by the world we live in or the world Henry lived in?? Sorry but i believe comparing a 1920 Chev to a model A is total bs.Bud.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Royce in Georgetown TX on Saturday, June 14, 2014 - 11:18 am:

Henry was willing to say or do anything to achieve his goals. He often openly lied to the newspapers and trade magazines, treated his associates and family like crap, and was often underhanded, shallow, and downright mean. You can't take anything Ford said to a newspaper seriously. He had zero respect for newspapermen
and journalists.

If you spend any time at all studying Henry Ford this will become apparent.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Ricks - Surf City on Saturday, June 14, 2014 - 11:26 am:

James Couzens was an upright, honorable man who worked for Henry in the world Henry lived in. There is no doubt Couzens had input into the $5 day, for the benefit of the workers.
--------

From en.wikipedia.org where you can read more:

In 1902, Henry Ford was organizing the Ford Motor Company; Alexander Malcomson was a major stakeholder in the company.[1] The two were seeking additional stockholders; Couzens (employee of Malcomson) borrowed heavily and invested $2500 in the new firm.[1] Ford Motor Company was founded in 1903 with John S. Gray as president, Ford as vice-president, Malcomson as treasurer, and Couzens as secretary.[1] Couzens took over the business management of the new firm for a salary of $2400.[1] In 1906, Gray died and Malcomson was eased out of the business, and Couzens became vice president and general manager of the company.[1] The company made both Ford and Couzens wealthy, due in no small part to Couzens's business acumen.[1] However, the two men gradually grew apart, and in 1915 Couzens resigned his position as general manager, although he retained a seat on the board.[1] In 1919, Ford purchased Couzens's shares in the company for $30,000,000.[1]


Top of pagePrevious messageNext messageBottom of page Link to this message  By keith g barrier on Saturday, June 14, 2014 - 12:44 pm:

Gosh Royce, sounds like a lot of folks today! KGB


Top of pagePrevious messageNext messageBottom of page Link to this message  By Royce in Georgetown TX on Saturday, June 14, 2014 - 03:38 pm:

I don't know about Couzens being such a forthright citizen either. He ended up a career politician during one of the most corrupt periods in our government's history.

Couzens was a talented and gifted public speaker by all accounts, something Henry Ford clearly was not.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Ricks - Surf City on Saturday, June 14, 2014 - 04:02 pm:

Corrupt? When he already had $30 Million? That's a snort.

wiki
--------

... He was an unsuccessful candidate for renomination (to the Senate) in 1936, the loss generally attributed to Couzens support for Roosevelt's New Deal programs.[1]

Couzens' actions in Congress generally followed those of the Progressive Republicans, advocating acts such as high graduated income tax and public ownership of utilities.

Philanthropy

Couzens established the Children's Fund of Michigan with a $10,000,000 grant. He also gave $1,000,000 for relief in Detroit and began a fund to make loans to the physically handicapped. Under Dr Frank Norton and Dr Kenneth Richard Gibson and their secretary, Kathryn Hutchison, the Children's Fund, among other things, provided free health and dental work for indigent Detroit children. The Fund was set up with a 25-year life span, and the project ended in the mid-1950s.[citation needed]

In response to the Bath School Disaster, in which Andrew Kehoe, an embittered school board member and treasurer, killed 38 children by blowing up explosives he had planted in the basement of the Bath Consolidated School in Bath Township, Michigan, Couzens gave $75,000 to fund rebuilding. The new school was dedicated as the "James Couzens Agricultural School". He donated $600,000 to the University of Michigan for the building of a residence hall for female nursing students; it was named Couzens Hall in his honor.[4]

In the 1930s, Couzens donated $1 million to Children's Hospital of Michigan, in response to a birthday request from his wife for "a simple box in which to keep my pearls". Couzens complied, including a note within the box describing the $1 million gift, stating "My dear, your new pearls will be all the children who are eventually treated there". Today, Children's Hospital of Michigan is part of the Detroit Medical Center.

Disturbed by the failures of low-incoming housing projects that came out of the depression, he believed in another way. He contributed $550,000 of his own personal money, combined with $300,000 from Oakland Housing, to create a managed low-income housing project called Westacres, in West Bloomfield, Michigan. The project gave the low income factory working man a chance to own a home. The homes were located on 1 acre of land and the owners were required to farm the land to provide food for their families when seasonal layoffs took place. The neighborhood became so much more, a community of caring for one another and traditions, still going strong nearly 75 years later. Westacres likes to say that it is one of the most successful government projects.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Saturday, June 14, 2014 - 06:45 pm:

I believe Henry Ford and Ed Huff met through Tom Cooper (partner with Ford and then Oldfield and Ford racers Arrow and 999). As this article says, Huff and Frank Day were racing the two Ford racers in Wisconsin when Day was killed during the events. The racer that was wrecked was returned to Detroit and Henry Ford revamped it, driving it (with Ed "Spider" Huff operating the throttle) to a world record in Janary of 1904:



In addition to working with Ford, Huff owned his own business, manufacturing coils and automotive ignition devices. According to this account, Huff would sell his coil business to George Kingston, who moved the factory to Kokomo IN:



The article says Huff stayed on as an engineer with the Kokomo Electric Company. Of course, in addition to the the magneto Huff invented in 1905, he would go on to be instrumental in designing the low tension magneto that be added to every Model T.

Ed Huff was the only "non Ford Motor Company shareholder" invited to own shares in Ford Manufacturing Company. As a result, he would share the profits when Ford Manufacturing was purchased by Ford Motor Company in 1907 (more on that later).

It seems during the early years, Henry Ford was able to attract, and keep, skilled young engineers and designers who helped develop Ford cars that consistently grew market share.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Monday, June 16, 2014 - 07:57 am:

One more bit on Ed "Spider" Huff. According to one of the "Ford Reminisces" by Fred Black, Ford employee beginning in 1904 (courtesy "The Henry Ford", Oral Reminisces):



I believe Mr. black is referencing Huff's work on the Model K/Holley Magneto. He (Black) references experimental work on the Model N immediately after development of the "Huff Magneto." The reminisces offer interesting insights and recollections into the early history of Ford Motor Company, as well as offering personal opinions of the people involved, including Henry Ford.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Monday, June 16, 2014 - 08:06 am:

I should have added this portion too. Mr. black later (page 27 & 28) says "the greatest amount of experimental work was not done at our plant." He was referring to experimental work on the Model T, and thought most of the work on the work was conducted elsewhere, probably at the Dodge Brothers shops. If true (and I have no reason to thinks it's not) this implies the Dodge Brothers shops and participation were greater than just an outside supplier (in my opinion).


Top of pagePrevious messageNext messageBottom of page Link to this message  By Kenneth W DeLong on Monday, June 16, 2014 - 09:02 am:

As per CJ Smith [The experimental room was about 12'x15',big enough to get a car in,milling machines,drill presses,and lathes.In that room we did all main parts build up for the experimental engines.] Over 100 years later more than one source of info is GOOD!!!! Bud.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Monday, June 16, 2014 - 09:37 am:

Bud,

It's interesting to find the corroborating and conflicting portions of the "story" when looking at several reports of specific incidents. One thing I've noticed is the inability of those interviewed in "Reminisces" to organize events in chronological order. That shouldn't be surprising, since I often can relate what happened in order of events a week ago, and these events occurred forty to fifty years prior to the recordings.

Regardless of accuracy, there are always tidbits and nuggets to extract from eyewitness accounts that help paint a picture of early Ford history and personalities.

One other problem I have with the reminisces is that interviewees were given a list of "questions" by the interviewer:





Unfortunately, as the preface above says, "The Interviewer's questions have been omitted from the account." "The questioning was primarily in the form of topics SUGGESTED TO MR. BENNETT CONCERNING WHICH HE MIGHT HAVE SOME INTIMATE KNOWLEDGE."

The problem I see with this is, when I read reminisces from the 1906-1908 period, almost every interviewee comments on "did Henry Ford wish build a big car?" Some of these interviewees appear to have actual knowledge about this, while others offer opinions that don't seem well supported. I think when interviewing someone, if you "lead" with questions, one may not be seeing true recollections, but forced opinions to answer the question presented, but of course, those are my opinions.

Anyway, all good stuff.

Have a good week,

Rob


Top of pagePrevious messageNext messageBottom of page Link to this message  By Royce in Georgetown TX on Monday, June 16, 2014 - 03:29 pm:

The Dodge Brothers were the manufacturer of the Ford car up through the Model K, making the entire chassis and all its components. Beginning with the Model N Ford began to build parts of the car at the Ford Manufacturing facility.

The majority of the parts for any Ford car built before 1914 was outsourced. Dodge Brothers were still making the majority of mechanical sub assemblies. Ford would supply drawings and patterns, Dodge would build the parts to suit.

When the Dodge Brothers gave fair warning (one year's notice) in 1913 that they were no longer going to be a supplier it was most likely (in my opinion) a result of the Highland Park Plant being capable of manufacturing more parts of the car as more sections of the plant became operational over time. That, combined with the Dodge Brothers wanting a greater share of profits to be paid to investors, and Dodge making their own cars set the stage for a clash of financial and automotive titans that ended in court.

Henry Ford lied to newspaper reporters in a number of amusing ways as the battle for share price to buy out investors went on over the succeeding years.


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