How Did Henry Ford Use The Automotive Industry?

With my iPhone in hand, I was walking through Madison’s East Isthmus on a hot day. As I kept walking further east, past Capitol square, I increasingly saw the buzzing area transition into a mostly residential neighborhood with several small stores and companies scattered throughout. Following the map on my device, I finally found the first location, the Badger State Shoe Company. I scrolled through the past photos of the building and the open market that used to dominate the area; I could not believe how much the area has changed. The new, modern building resembled nothing of a factory, as there were only apartments that surrounded the building. I realized that this represents not only the globalization of Madison, but also a global transition

that our country and the rest of the world went through. One of these key transformations was the shift from the industrial era to the Post-Fordist de-industrialization ideals that led to how much of our economy is organized. I saw this global change in the small Isthmus neighborhood in my walk through Madison.

Fordist to the Post Fordist Era
In the early 1900s, Henry Ford, who introduced the Model T automobile, created a system of mass production within his company.

His precise, synchronized, and specialized system, which heavily relied on the assembly line, lowered his automobile’s unit price, making it affordable for the average consumer. The structure Henry Ford introduced is known as Fordism, which is the notion of an economic and social system based on an industrialized and consistent form of mass production. The mass production included producing standardized products in vast amounts by using specific purpose machinery and unskilled labor from factory workers. The workers were then paid high wages so they can afford to purchase the products they make, while the product life cycle was designed to last for a long time. The purpose of Fordist concept was mass production supplying the development of a mass market. This means that it services a national market with a focus on production and the expectation that the market will absorb that output. This ideal was used by factories all across the country, including in Madison with the example of the Badger State Shoe Company. With so many factories using this method of production, the Fordist time period produced a highly developed economy in the US during the mid-1900s. This industrialization throughout the country sustained economic growth and widespread material

advancement.
However, in the 1960s, the US endured economic trouble as it tried to finance the Cold War and the Vietnam War. After the wars, the economy needed to be reinvented, and the Post-Fordist production system emerged. The rise of new computer technology and improved international telecommunications meant that mass production could be completely redesigned. Production no longer had to be centralized in a few key manufacturing factories, as it could be dispersed all over the world. Many of the largest US companies began to expand their companies internationally. With computer controlled tools and specialized manufacturing techniques introduced, production could now be customized and no longer needed to be in the former exact scale of assembly lines. Instead of being producer driven, production became more consumer-oriented. In the new Post-Fordist economy, companies had to break away from the traditional business model and become flexible in their investments and production. Many companies could no longer rely on just the production of goods, but also on the success of developing products and marketing them.

This introduction to the Post-Fordist era also impacted the workers in most companies. Instead of the blue-collar jobs that kept workers with the company until retirement, jobs began to have flexible times, contracted work, layoffs, and wage rollbacks. The new post-Fordist economy created jobs that needed people with social skills and technical skills. Women joined the workforce because of their abilities to deliver on the social skills; qualified men and women with important technical skills flourished in the new economy. The core of Post-Fordism is mass customization; being able to provide large quantities of goods but also with the option of customizing them for different markets and customer preferences. Consumers became the key driver, and companies thrive with their capability to quickly adapt production based upon its consumer demands. While these new skill related jobs emerged, most of the former Fordist style production began to move overseas. Economic globalization permitted the exploitation of global comparative advantages of other poorer countries to be used for labor and resources. Globalization and the growing level of flexibility required in production encouraged outsourcing and offshoring, which lead to many powerful companies forming networked organization all across the world to manage such a system. The growing influence of technology and market factors has shifted the importance of core resources towards innovation and knowledge. Processes such as research and development, design, manufacturing, distribution, and retailing are part of a continuous chain that strives to improve products for consumers. This rapid technological change is also creating much shorter product life-cycles, with new generations of products being introduced regularly.

Globalization through Madison
In the first location of the Badger State Shoe Company, I immediately realized the difference between the Fordist period and the current Post-Fordist era. This company followed the ideals of mass production, with hundreds of workers producing thousands of shoes per day. The location for this company at the time was perfect. As evident in the past photos of the Isthmus neighborhood in Madison, the area was a very busy location filled with factories and people. The location offered easy access to the freight depots of the Chicago/Northwestern Railroad and the Milwaukee/St. Paul railroad, which made it easy for the company to distribute their products to neighboring cities and areas. Industrial development in Madison prospered after World War I because of the technological innovations in manufacturing, the increase in regional marketing, and the improvement and extension of railways for the distribution of products. The widespread phenomenon that spread across developing communities across the nation reached Madison by the late 1900s; this was the growth and expansion of local companies into large factories employing hundreds of people that served regional markets. With the open market right across the street from the Badger State Shoe Company, many locals and people in the surrounding areas of Madison were probably the main consumers of the goods produced by the company. However, as the global transition to Post-Fordist emerged, many factories that used mass production began to disappear, including the Badger State Shoe Company. It was the flexible companies that began to succeed, the ones that looked to feed the consumers’ demand. The former Badger State Shoe Company is now largely used for residential living, showing the total depletion of large factories in the East Isthmus area overtime.

Image 1: Residential Apartments in the former Badger State Shoe Company

This globalization, the shift from factories in the US to all across the world, is represented in Nike. Although Nike has their headquarters based in Oregon, a majority of their assembly line work in done in other countries. They use this offshoring in Asia because there is cheaper labor, less worker protection rights, and overall cheaper prices for people in America. By pushing their production all across the world, they can save a lot of money for more profit. With the cheap labor that is in Asia, Nike can produce shoes and other clothing at a fraction of the price it would cost domestically. The large transnational corporations have taken over their area of specialty, and have dominated that aspect by adjusting their goods to the concern of the people; this is the Post-Fordist ideals. Also, by expanding globally into one of the world’s most populous continents, Nike has opened up a tremendous opportunity as a stepping stone to become wildly popular internationally. This transition to the Post-Fordist era is an example of globalization happening in US cities, from having local factories to instead having other types of smaller businesses and residential areas. We no longer see manufacturer companies all over cities, and we don’t have very many industry workers in US cities anymore.

During the Fordist period, with many companies needing gas and electric resources in their factories that filled the area of the Isthmus, the Madison Gas and Electric Company was probably a huge factor for production, and therefore rising prices in energy resources hurt the financial costs of the factories in the area. What potentially led to a rise in energy prices at the time could be the demand for more fossil fuels due to the many factories in the area. The need to obtain these resources from further areas probably increased the energy prices, which made the local protest for lower prices. All the production done in factories has ultimately affected the emission of CO2 into the atmosphere. With so many large scale factories spread throughout America, the overall net CO2 emissions from production and consumption for the United States is incredibly high compared to other countries. Overtime, with the decline of factories and the transition into the Post-Fordist age, many states including Wisconsin have turned to different energy resources that are better for the environment. Examples are the wind farms that utilize renewable energy sources, which has become a viable option instead of the urban coal plants. The Madison Gas and Electric Company has also converted from a coal-burning facility to one that only utilizes natural gas. This global shift to the Post-Fordist age also affected the East Isthmus neighborhood, as I saw the decline of factories during my walk. Instead places such as the Wil-Mar Community Center and the Willy Street Co-Op show that these neighborhoods in Madison are going for more traditional and locally owned businesses. The countercultural movement suggests that the Wilmar neighborhood preferred a tight knit community scene that is expecting of all people, rather than the rough factory and production life that was evident in the past. This is also shown through the last location, which is the former Candy Company. Instead of running large scale factories such as the candy company, there are now more local restaurants and shops that occupy the building.

Image 2: Mural on the Side of the Wil-Mar Community Center

Globalization’s Effect on Detroit
One city that has largely impacted by globalization is Detroit, although globalization has taken this city into a turn for the worst. Detroit is known as the motor city because of the automobiles companies that were started there, including the Ford Motor Company. All three major U.S. automakers still have headquarters in the Detroit, but these companies have long ago moved some of the biggest chunks of their production, jobs, and plants to cities spread across the US and even to countries as far away as China, Brazil, and Russia. Without the plentiful factory jobs and incomes that once made Detroit a wealthy place, the city has steadily deteriorated into an empty place of vacant factory buildings. Detroit soon became the largest American city ever to declare bankruptcy. Today, the global nature of the auto industry is that factories are more likely to be located in the Southeastern parts of the US or Mexico to serve the markets of the U.S. and Canada, while the growing consumer demand for cars in rapidly developing nations is being satisfied by the US owned factories within those countries. Detroit is no longer a relevant global automobile sector in today’s economy because the auto production facilities near deep ocean ports on the coasts are more desired than interior seaports like Detroit. For many decades after World War II, the big auto plants and other factories that once hired thousands of workers moved overseas. And more recently, with the shift to the Post-Fordist era, the US has formed a more globally integrated economy for labor manufacturing, with huge labor assets in China, India, and other third world countries that are much cheaper. These larger workings of global capitalism is a part of the Post-Fordist period that has deeply impacted Detroit, leading to further deindustrialization and the loss of many jobs in the city. While the citizens in the city of Madison were able to easily adapt from the loss of manufacturing jobs through plenty of employment from the University of Wisconsin-Madison, small businesses, and the state government, the people in Detroit have struggled mightily.

Living As a Global Citizen
I have realized that globalization is the overall process of incorporating both nations and their people economically and culturally into a larger community.

Overtime, as shown through the shift from Fordist to Post-Fordist ideals for production, it takes long period of time to mix people and nations closer together. This is being done through technological innovation, as technology is helping to dissolve former barriers of time and distance. Factories that used to dominate the United States have now spread throughout the world, providing jobs for people globally. Consumers are also on an international level, as there is a greater awareness and understanding of what is happening everywhere. Globalization, however, also produces economic and social disorders while producing public concerns over job security, the distribution of economic gains, and the impact of instability on people. Many people also worry about a growing focus of economic power, harm to the environment, danger to public health and safety, the breakup of native cultures, and the loss of power and responsibility within government. I believe that as a global citizen, I have to look at all perspectives from people in different situations and realization how current times have come to be. I am a part of an entire world community and all my actions, although in a miniscule amount, contribute to building the world’s community values and practices. By living in the United States and attending UW Madison, I

should use my privilege responsibly. Whether my ideals are to protect human rights, environmental protection, poverty alleviation, or humanitarian assistance, these values shape how the world evolves globally. Henry Ford was able to influence an entire economic globalization through his Fordist ideals, and this shows how people around the world can affect the global community.