Henry Ford Ii Speaks Out

A Conversation with Tom Lilley

MR. LILLEY. — Mr. Ford, millions of people in the United States would like to be sitting here this morning in my place and have this chance to ask you questions. I am going to try to ask some of the questions I think they might want to put to you. Most of all, I think they would like to hear about your plans for the Ford Motor Company — where it’s going and how it proposes to get there.

MR. FORD. — I think I can state our goals very simply. They are a lot easier to state than to achieve. Our first goal is to outsell Chevrolet in the low-price field — just as soon as a competitive buyer’s market gives us a chance to do it.

There are a couple of things in the way of that goal right now. First, we can’t get enough steel to manufacture anywhere near capacity. Second, we are in a seller’s market. Our facilities for making low-priced cars are not as large as Chevrolet’s. Right now we can sell all we can make, and so can they. But some day supply is going to be greater than demand. It won’t be a question then of how many can you make, but how many can you sell. Our goal is to outsell Chevrolet when that day comes. Speaking of steel, I don’t mean to imply that we haven’t had anything but the best help from the steel companies. It’s just that we’re caught in this shortage like everyone else and doing the best we can about it.

Our other major goal is to get back our rightful share of the total market. Now I admit that, in one sense, there is no such thing as a “rightful share” — our share of the market is only as big as we are able to make it. My point is that we should be and will be good enough to get a bigger share of the market than we have today. To be more specific, Ford Motor Company total sales — of all types of passenger cars in all price classes — have dropped from about 45 to 50 per cent of the total auto market in the mid-1920’s to a low of 18 per cent and to approximately 20 per cent today. We have to find our place somewhere between 18 per cent and that top percentage. If Ford has any “rightful share” at all, I think it is considerably higher than 18 or 20 per cent. I know we can do better than that.

Those are two specific goals — outselling Chevrolet in the low-price field and increasing our share of the total market. Our job is to attain these goals and at the same time make a profit. There seems to be an impression around, that, for some obscure reason or other, Ford does not have to make a profit. That isn’t so. Unless we can obtain a return that enables us to pay reasonable dividends, renew our plant, invest for the future, and meet competition on equal terms, Ford Motor Company will not have any future.

I like to shoot for goals like these because they are concrete and can be understood by every man in our organization. Moreover, we can tell how close we are and we’ll know when we’ve reached them.

Copyright 1947, by The Atlantic Monthly Company, Boston 16, Mass. All rights reserved.

MR. LILLEY. — As you see it, how does this tie in with the broad economic problems that seem to be facing all of us today?

MR. FORD. — Of course, we are deeply interested in the difficult problems facing the United States and the world.

But I do not pretend to be a philosopher, and I doubt whether we can help most by setting up a series of abstract goals. I have repeated many times that our organization has one primary peacetime job: to make more and better cars to sell for lower and lower prices. If we do this job right, we will be making the kind of contribution to society a business like this is set up to make.

That’s why I think we have to recognize that we have got to do an even better job in the future than we have in the past. If we do, our company will be a profitable and going concern over the long pull; our customers will get a better product for fewer dollars; our workers will have a higher standard of living — not only more dollars, but dollars that buy more, and steadier jobs to bring in those dollars; our suppliers, our dealers, and the people who work for them will prosper.

Let’s look, for instance, at the urge for security which all of us understandably have in these muddled times. Then look at the trend of Ford sales as they dropped from 50 per cent to a low of 18 per cent of the industry. If that trend were to continue, there would be no security for anyone in the Ford organization or for anyone directly or indirectly connected with it. That’s why our first and most important goal is to boost that percentage plenty—and I think we are going to do it.

MR. LILLEY. — Do you have any opinions as to the time when the buyer’s market will return?

MR. FORD. — Well, we all have opinions on that. Late last year I said that we would have a buyer’s market in the first quarter of 1949, but that was obviously a bad guess. None of us realized at the time that the steel situation was going to continue as tight as it is and as it is going to be next year. If you’ll give me one more guess, I’d say that the seller’s market might last two years more.

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MR. LILLEY. — Let’s turn to the tougher subject, the steps you have been taking to get ready for the day of competitive selling. There are a lot of ways of tackling that subject, and I am willing to approach it in any way that makes sense to you. Perhaps it would be best to turn back a couple of years to 1944 and 1945, when you became Executive Vice-President and then President of the Company. From conversations with men in your organization and elsewhere, I know that your grandfather had for many years prior to then not taken an active part in the day-to-day operation of the business. Shortly before you became President, your father had died. I can think of few more difficult assignments than yours in 1944 and 1945. Could you select, out of the welter of difficulties that I know you faced then, one or a few of the major problems you considered most important?

MR. FORD. — That’s a big order, but I’ll try. It might be best to divide those early problems into two sections: first, our need for a management group capable of running our organization in a spirit of teamwork; and second, the need to modernize our operational procedures.

I think you need some more background right about here. We were just getting out of war production. Facing the huge job of returning to peacetime work, we found that we just were not organized or even remotely ready to tackle it. What we felt was needed most of all was to get rid of oldfashioned ways of doing business and what I think were wrong ways of handling people.

One of the first steps we took was to set up a top Policy Committee. The Policy Committee was originally formed because we knew that there was simply no sense in trying to run Ford Motor Company as a one-man show. I guess Ford was pretty much a one-man show in the old days, and especially so since 1919 when the minority stockholders were bought out by my grandfather. Of course, my grandfather was capable of running the show he had built. But I wasn’t my grandfather, and I figured that I didn’t know much about what was and had been going on. I was anxious to build a team around here so that we could get the joint thinking of eight or ten top fellows on the Policy Committee, and run the Company according to the decisions all of us could reach together.

We had some good, experienced people to start our big reorganization job — among them Mead Bricker, who had done a good job in getting out plane production at Willow Run and is now a vice-president; John Bugas, who had left the FBI to help us with some of our personnel problems and is now vice-president in charge of industrial relations; Jack Davis, who has been selling Ford products more than twenty-five years and is now vice-president in charge of sales and advertising. These three men and four others made up, with me, the first Policy Committee. The assignment of titles and specific jobs to these men was something new in itself, because there just weren’t many titles or assigned responsibilities at that time.

During the next year and a half, we brought in a number of new executives to help us do our job. Probably our most important move was to bring in Ernest R. Breech as Executive Vice-President. I realized that I needed someone to help bring together our new organization into an effective operating unit. Mr. Breech’s proved ability as an administrator, backed by very thorough experience in financial and business management, made him the man for the job.

We have been lucky enough to get other topflight men for our first team line-up — Del Harder, a man with years of production background, as our vice-president in charge of manufacturing; A1 Browning, vice-president in charge of purchasing; Harold Youngren, engineering vice-president; Lewis D. Crusoe in finance and planning and controls, and also a vice-president; and William T. Gossett, vicepresident and general counsel. These men, as well as my brother Benson, are now on the Policy Committee.

MR. LILLEY. — How do all these names and jobs fit together now in the Ford Motor Company?

MR. FORD. — Let me summarize it this way. We have seven top staff divisions — manufacturing, engineering, sales and advertising, industrial relations, purchasing, finance, and legal. We have appointed, from inside our company and from outside, the best qualified men we could find in the country to run those divisions.

MR. LILLEY. — You mentioned a second major difficulty you faced when you first came here — the need for modernizing operational procedures.

MR. FORD. — One of the biggest problems was our almost complete lack of emphasis on finance or accounting. No one knew how well or how poorly the steel mill or forge shop or any other part of the business was doing. There just weren’t adequate figures. All we had was over-all financial statements appearing at not too frequent intervals, primarily for tax purposes.

These days you can’t expect to run a successful business unless you know where you are and where you are going. Imagine the United States as one big road with no highway signs and you started on a trip from Los Angeles to New York — you might wind up in Central America. Well, there weren’t very many highway signs around Ford Motor Company. We were not providing anyone, from the job foreman up to this office, with the information needed to do his job effectively and well. Perhaps in the old days out here they didn’t need all the people and organization we need these days to do our jobs.

We now have more than 4000 persons employed in finance and accounting. Today we know whether the steel mill is operating at a profit or loss, and how much that is. We know how much is spent on labor, materials, and overhead. Consequently, the steel mill superintendent and everyone else concerned knows what the steel mill is doing and has sufficient detailed information to help him find out when and where trouble may exist. I don’t mean by all this that we have anything like a perfect accounting and control setup. We couldn’t do that in a twoyear period, but we have made tremendous strides.

The Engineering Division has more than tripled its personnel — from approximately 800 in 1939 to more than 2600 today. In part that increase was due to the necessity of working out a complete new line of cars. But it is also because we’re convinced that if we are going to get results three to five years hence, engineering work has to start now.

The changes in our sales division have in some ways been less spectacular. We have separated Lincoln-Mercury from Ford sales activities and have divorced district and regional managers from all assembly and accounting responsibilities, thus freeing them entirely for sales work. We have added a completely new market research group and have reorganized a number of other departments. Today we lean very heavily on Jack Davis, our vice-president of sales and advertising, and his organization in making policy decisions. In planning a new model, for instance, we are vitally interested in knowing what our customers want — not what we think is good for them. For that information we look to Mr. Davis’s organization and the dealers with whom that organization works.

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MR. LILLEY. — But, Mr. Ford, what about the day-to-day problems that came up while you were busy with this reorganization?

MR. FORD. — Of course, every hour we had to make immediate and pressing decisions that wouldn’t wait. In the early period, we were converting all phases of our business from war work to work on our first peacetime models. Our whole production, sales, and purchasing setup had to be overhauled in a competitive race for production.

While we were starting production on our first post-war models, we had to start developing our new models — three completely new lines of cars and a new line of trucks and buses. We had to look at our money situation to be sure that we would have the cash on hand to do the job. For instance, we will spend about $80,000,000 just for the special tooling, dies, jigs, and fixtures needed to build our new models.

MR. LILLEY. — How far have you gone and how far do you think you still have to go in reorganizing your top management group?

MR. FORD. — I would say (except for a very few minor changes which naturally are always going to take place) that we have pretty well settled on our present topside staff organization. Because of the pressure of our immediate problems, however, one important part of our organization job is much further from completion. Entirely aside from the staff divisions I have mentioned, we have established five line divisions — one for the Lincoln-Mercury line, one for international operations, one for parts manufacturing, one for assembly operations, and a large one for general production. Our ultimate aim is to establish line and staff relationships of the kind which many well-run companies have found most efficient and workable. For example, responsibility for Lincoln-Mercury production as well as sales is now cleanly separated from the rest of our organization and divisionalized.

We still have a long way to go, of course, in making an effective breakdown of the rest of our line organization and in establishing the proper relationship between line and staff groups. Even in the case of the Lincoln-Mercury Division, we haven’t yet worked out, as well as we plan to, the most effective ways of giving that division the help of our staff groups, such as sales, manufacturing, and industrial relations.

But overall, in the two years we have had, we have done as much or more to establish an effective top management team than I dared hope. We have broken our over-all job down into seven major staff divisions, and we have the key men we want in charge of each division. Each of these men in turn has reorganized his particular division, usually on a major scale. I’m pretty confident that the mental attitude around here is healthier than it was too, and I think a good spirit of teamwork has really settled into the place. Running a 130,000man company is no job for one or seven or seventy men. I just don’t believe we could come near our goals with one or a few men sitting on top making all decisions and the rest acting as automatons. Instead of pushing all decisions toward the top, we have been breaking down the decision-making job and staffing each segment with men we consider competent and willing to make decisions.

Don’t, misunderstand me. I don’t mean to imply that all our problems are licked. But I think we have the men we want on our team, each one knows his assignment, and we are getting the momentum to put up a tough, competitive battle.

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MR. LILLEY. — Mr. Ford, I should like to turn from what has been done, to the wide-open subject of the steps you are planning to take in the future.

MR. FORD. —Again I’d like to break down my answer into two parts. One has to do with physical things — the products we plan to make, how and where we plan to make them. The second has to do with people — the men and women in our organization. Frankly, I think our plans having to do with people are by far the more important, though obviously plans for our physical plant setup and for our people are closely related.

First, our product. We are selling cars to the public, and as I said before, it’s not what we like but what they like that counts. Now I’m not going to attempt to give you a lot of technical information. Nor can I, for obvious reasons, tell you all about next year’s model. I certainly can say it’s a brandnew car — outside and in. We think that our new lines of cars in all price ranges will appeal to the customers’ wants and needs better than any other cars we ever put out.

As you probably know, we have been doing a substantial amount of research and experimentation, both regarding the kinds of cars people want and regarding possible radical changes in car design. At one time we did a lot of work on a radically different light car using new materials and weighing about a third less than present models. At least for the present, that idea is on the shelf, for the very good reason that our studies indicated that a light car would not give people what they really want — they want a car that will hug the road at high speeds; they want an extra-heavy frame and a car heavy enough to carry a lot of extra equipment. In fact, what they really want is a big car at a low price. At the present stage of development it just isn’t in the cards to build these requirements into a light-weight automobile.

Nevertheless, a fair portion of the tripled engineering personnel I mentioned before is at work on basic new ideas, ranging from engines to auxiliary power steering aids. Obviously, the more radical ideas are not going to see the light of day overnight for they have to be practical and they have to be available at the right price. And I think you’ve also got to realize that in seven war and post-war years few basic changes have been made in automobile design. There has been a lot of talk about the vast technological improvements developed during the war. Unfortunately, most of those wartime developments can’t be applied to peacetime automobiles without a lot of engineering work. After the static war years, though, I think the public want and expect more and faster major improvements in their cars. I don’t blame them, either. But none of us is going to make any promises on dates. We are going to continue appropriating the money and hiring the people that it will take to do the job.

MR. LILLEY. — Do you have any longer-range plans for diversifying your product fines — making and selling products other than automobiles?

MR FORD. — So far as any moves into new product lines are concerned, the answer is, “Not now.” We have too big a job to get done without worrying about things other than automobiles.

MR. LILLEY. — Do you plan any changes in the expansion or contraction of your many different operations which supply raw materials, steel, cement, glass, and parts to your main fabricating and assembly units?

MR. FORD. — Yes, we have already made some changes in the last two years and there will be others. For example, we have already sold a good many properties such as our soya bean farms, and most of our fleet of boats, and currently we are considering the sale of several other properties. On the other hand, we are also planning an 18-milliondollar improvement in our steel mill to balance operations there.

Basically, it’s a dollars and cents question and, to some degree, a question of management load. As I told you, we now have figures available to tell us whether we are making a profit or loss in our different operations. If some unit is not making a reasonable profit on the basis of prices similar to those charged by competitors, we plan to make major changes. Or if some operation overloads our management group or calls for engineering or other specialized assistance which we can’t effectively provide, we do not belong in that business either. Of course, a lot of other factors are involved, such as availability of buyers, the price they will offer, and alternative sources of supply. Over the long run, we certainly do not consider our combination of manufacturing units to be at all frozen in its pattern as of today.

MR. LILLEY. — A number of companies are planning or actually moving in the direction of decentralization of their manufacturing operations. Do you have any such plans? I am particularly interested in any possible moving of operations out of your huge Rouge plant.

MR. FORD. — Yes, we are planning further moves to decentralize our operations. And I think there are real possibilities of going farther than we have in transferring production units out of the Rouge to other scattered points, though admittedly many operations could never be moved physically. We already have thirteen branch assembly plants, scattered throughout the country. Currently, we are building three new Lincoln-Mercury branch assembly units in Metuchen, New Jersey, St. Louis, Missouri, and Los Angeles, California, and a Ford plant in Atlanta, Georgia. This year we have acquired two outside plants, one located near Detroit and the other in Canton, Ohio, which will enable us to transfer from the Rouge plant some very important operations.

It is impossible to cite all the practical factors that have to be taken into account in moves toward decentralization. Consider just the problem of freight rates. Advantageous shipping rates out of Detroit have certainly contributed to the industry’s continued concentration in this area. We make motors, axles, transmissions, frames, and body stampings and ship them to our scattered assembly plants. A shift in the location of production facilities for many parts of these basic products could involve extra shipping costs, in some cases expensive cross-hauling of the products. Because of transportation costs, future moves of most fabricating units will probably be limited to an area no farther than, say, Indiana, or the western part of New York State.

But I think there are compelling reasons under today’s conditions why it is unwise to have so much of our activity concentrated in one location at the Rouge plant. I spoke a few minutes ago about the desirability of decentralizing our organization by breaking down the management job into welldefined smaller segments. Any such move would be easier and more effective if some of our production units themselves were geographically separate and distinct. Then it is generally recognized that many of the social problems of our time are made worse — and in part have been created — by concentrating vast numbers of people in crowded city areas such as Detroit. I sincerely believe that our heavy concentration in the Rouge plant makes our organization job and all phases of our human relations job more difficult, in spite of the apparent advantage of such a concentration.

I do not mean by this that we ever intend to “break up” the Rouge plant, or that we are planning to make any large-scale moves in a hurry, or that we are unaware of all the difficult problems in personnel adjustments that are involved. But I do think that over a period of time our company and most of the people in it will be better off if our extreme concentration in the Rouge is reduced.

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MR. LILLEY. — Your ideas on decentralization take us very close to the second major subject you outlined, your plans having to do with people. Some time ago you gave a talk on “human engineering. ” Could you tell me something about what this concept means to you?

MR. FORD. — Earlier, I spoke of some of the steps we have taken in reorganizing one particular group of people, the men in our seven top staff divisions. But management of Ford Motor is not confined to the men in our staff divisions. Our cars are built by 107,000 workers on our hourly payrolls. These men are managed, not by a few hundred staff people they seldom see, but by a total management group of about 8700 — from job foreman to this office.

One of our biggest and certainly one of our most difficult jobs for the future is to make all 130,000 Ford men and women effective team players, to a far greater degree than they have been in the past.

There are many phases to this job but the heart of our problem can be stated very simply: it is to get each man in our organization to treat the men he works with as he would like to be treated himself. Now let me tell you how far some of our foremen think we are from that objective. Hundreds of them answered a letter I wrote to all foremen this year, and we didn’t feel very complimented about what some of them had to say. One man said that he and the other foremen in his building were constantly being dragged into the superintendent’s office and given hell for everything that went wrong. Another talked about the time he was called down in front of a group of men “in a way not fit for a dog to take.” Another said that morale was low and was going to stay low until top supervision “lays down the whip.” Maybe these were just complaints that you could mark down to a few habitual gripers, but I doubt it.

I think you ought to get this point quite straight. I don’t think for one moment that these are conditions or complaints which are peculiar to Ford Motor Company. I think they are found more or less in all mass-production industry.

But our worries are right here in Dearborn, and I can assure you that a man subjected to any such treatment is not likely to have any sense of participation in the management of this company. And if, day after day and year after year, he gets pushed around, he’s going to try to get the work out of the other men under him by pushing them around, unless he’s a very remarkable guy. His chance to learn something about the job of the man a level above him is very remote indeed, for he is not going to be consulted when his boss makes decisions, or even told why those decisions are made. He’s quite likely to get accepted for promotion on his ability to push harder than the next guy.

One of our major goals is to eliminate such situations in all levels of our organization. An important part of each man’s job is to try to get along with the people with whom he is working. We want our men at each level to be good managers and to let the men immediately below them know what decisions are being made that will affect them and why. Wherever possible, the men below should be given a chance to participate in making those decisions.

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MR. LILLEY. — I realize that you are tackling a problem to which no one has all of the answers. However, in talking with various men in your organization during the last few days, I was particularly impressed with the statement of a man in charge of one of your staff departments. He said that when he was debating whether or not to take the job, you had told him that what you wanted in human relations was “not lip service, but action.” I should like very much to hear about the steps you have taken to date.

MR. FORD. — Other organizations are undoubtedly ahead of us in some respects, for we have just really gotten under way.

With regard to our management group, there are two special staff activities which may be of interest to you: our so-called “management meetings” and our management relations program for foremen. Back in 1946, not too long after we had formed our original Policy Committee, we set up a number of subcommittees to deal with various phases of our business, such as merchandising, products, and industrial relations. These committees helped the new top men in our staff divisions learn how to work together effectively and communicate with each other about what each division was doing. But we realized that we had no effective way to let all other members of our management group know about the many changes being made. Normal channels were completely inadequate for keeping everyone from job foremen to department heads informed on Company policies and plans.

It was to fill this need that we set up our management meetings. At these meetings we attempt to relay to men of management all down the line what our top management objectives are, how we are organized to meet them, and how our various divisions and departments work. At the very first meeting, Mr. Breech explained the changes that had been made in our over-all setup and the reasons for these changes. At each later meeting, the vicepresident of a major division has explained the functions and methods of operation of his division.

In each case, an initial meeting is attended by about 125 men. Then meetings just like it are held in every department and in every plant until the last man in management is reached.

MR. LILLEY. — Do you personally take part in these meetings?

MR. FORD. — In as many as possible. At the first meeting I outlined what we were trying to do. At that meeting and at a special session later for plant supervisors I talked about our human relations problems as forcefully as I knew how, to convince our men that we mean business.

The second special staff activity I mentioned, our management relations program, got under way last summer after our foremen’s strike. That strike did a lot to show us that we were far from having the organization that we want. It was about three years ago that our company officially recognized the Foremen’s Association of America as the bargaining agent for our foremen. I personally do not believe that foremen should be unionized, because they are members of management. But I find it difficult to criticize our men for joining the union because, frankly, I doubt whether in the past very many of them were actually considered or treated as part of management. We now no longer recognize the union as bargaining agent and many of the men tell me they have allowed their union membership to lapse.

From what I told you earlier about the letters I received from foremen, I think you can understand some of the reasons why our foremen found difficulty in considering themselves part of our management team. One of the first jobs of our newly created management relations department is to take specific steps which will let them know they really are a part of that team.

Each step may seem small in itself, but for my money, all of them are long overdue. We are eliminating time clocks and badges for foremen, building separate parking places, locker rooms, and eating places for them, designing new coverall coats to identify foremen and protect their clothes. We have established management newsletters and management information bulletins so that we can pass information along to foremen. We have worked out a new vacation policy and are developing a revised wage structure to take care of inequities and allow adequate merit increases within a department.

One of the more important phases is the establishment of special management relations representatives in our various production units. Each of these men is selected from the ranks of foremen. He has the responsibility of seeing that individual problems of foremen are taken care of promptly and fairly. And they’re trained to be good at listening to complaints and suggestions; not at giving orders. Through special training programs and through the efforts of the management representatives, we are trying to give our foremen letter training in how to get along with people. That sounds easy, but anyone in mass production these days will tell you that he hasn’t many harder nuts to crack.

These programs — management meetings and management relations work with foremen — are far from their final form, but in each one I think we’re trying to do an important and difficult job. Finally, of course, the answer lies not in special staff activities but in our own line organization. Most foremen are going to continue to act the way their bosses act, and in turn most of those bosses will take as their model the men next in line above them. I’m sure we’d be only fooling ourselves if we thought there was any real short-cut to educating each man by example.

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MR. LILLEY. — How does this point of view affect your relationship with the unions?

MR. FORD. — Unions for our workers are quite a different matter from the foremen’s union. Unions are here to stay, and as I have said before, our workers should have the right to strike that goes with unionism. We have worked with the unions in the past and we certainly have every intention of working with them in the future.

Frankly, though, I think union leaders — and I mean lots of them, not only our own — have got to do a better job than they have of finding out and representing the real wants and needs of our workers. Then again, as in our negotiations this year, internal union factionalism and politics and a minority of Communists have tended to create a confusion and bitterness that had nothing whatever to do with the interests of our workers. I don’t make this criticism in order to create more bitterness, but in the same spirit in which I have been criticizing our own company. We certainly need to make improvements all along the line if we’re going to do our job well, and I think it’s up to the unions to get rid of conditions that create bitterness and confusion if they are going to do a good job of representing our workers.

So far as our company is concerned, we want to do everything in our power to make collective bargaining a far more effective process than it has been in the past.

MR. LILLEY. — Entirely aside from your relationships with unions, what obligations do you think Ford Motor Company has in its direct relationships with your workers?

MR. FORD. — We try to find out what our employees want out of their jobs. Elmo Roper’s opinion-sampling organization has given us a useful guide, based on a cross-section of opinions of workers throughout the United States. His analysis showed that they want four things: first, they want security; second, they want opportunity for advancement; third, they want to be treated like human beings, not just numbers on a payroll; and fourth, they want a sense of human dignity that comes from a feeling that their work is important.

Regarding security, we have always attempted to give our workers good pay, and we plan always to try to pay wages as high as or higher than the industry. We hope that somehow we are going to be able to give our men greater continuity of employment than they have had in the past.

But I don’t want to palm off any cockeyed promises or pious hopes on you. Ours is a seasonal business and we, like everyone else, are affected by the swings of the business cycle. We think we may be able to take some steps, such as better scheduling of model change-overs, that will help a bit in reducing seasonal unemployment. We have attempted, and we will continue to attempt, to use our economic influence to cut down boom-and-bust swings. But let’s not kid ourselves. In the fast-moving, interrelated world of today, no one company can come close to controlling the business cycle.

As I told you earlier, by far the most important thing we can do to give greater security to our workers is to reverse the downhill trend of our business. If we can do that and really do it well, I think our workers will be a long way toward having as much security as can exist in today’s kind of world.

MR. LILLEY. — Mr. Ford, isn’t your workers’ rejection of the pension plan you recently offered them closely related to this issue of security?

MR. FORD. — Yes, I think so. Over two years ago, we began a careful investigation of all types of old age retirement or pension plans. The plan we finally offered was more favorable than any other I know of in a large industry, providing among other things that an average worker upon retirement would receive company and government payments totaling about 50 per cent of his normal pay — and in some cases 60 to 65 per cent of normal pay. When, in the course of negotiations, some of the union leaders reversed their original position favoring a retirement plan, we suggested that the workers themselves be allowed to vote for one of two alternatives. The first was a 7-cent wage increase plus the pension plan, and the other a pattern wage increase equivalent to 15 cents per hour with no pension.

The vote was overwhelmingly against the pension plan and in favor of the 15 cents an hour pattern wage increase. While some side issues influenced the voting, the results clearly indicated that most of our employees would rather have higher immediate pay than old age security. Maybe the average Ford employee feels that he would prefer to take care of his own old age in his own way, rather than have his security planned for him.

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MR. Lilley. — What about the other workers’ needs that you outlined, opportunity for advancement and the desire to be treated like human beings doing an important job?

MR. FORD. — Meeting these needs — really meeting them — is a more intangible job, and yet it is certainly a vitally important one. It’s strange but the polls and surveys show us that not all workers are genuinely interested in having an opportunity for advancement. But to those who are, we have a very great obligation. Our Industrial Relations Division has made several changes which are steps in the right direction. They have, for example, established new procedures for upgrading men interested in advancement and have started a pre-training program for workers who have shown an interest in becoming foremen.

In the last two years we have brought in a lot of new management personnel from the outside at all levels in our organization, because we had to do it. But we certainly don’t plan to continue that. We are going to promote from within our organization and, to do it, we have got to give the men now in the lower levels of our organization a chance to grow.

MR. LILLEY. — It must be an even bigger assignment to find tangible ways to have your workers know how important you consider them and their work.

MR. FORD. — Well, this example ought to show you. In 1946, we had a poll conducted to find out what our workers really thought about the Ford organization. Of the large number of replies we received, over two thirds of the men believed that little or no effort had been made to make them feel a part of the Company, Over two thirds thought that the policies of the Company either had not been well explained to them or had never been explained at all. Fifty-odd per cent thought that there should be some systematic way for them to make their views known to management, and almost 20 per cent thought it was downright dangerous to express any honest opinions around here. I think that we got a pretty good cross-section in this poll, and that it gave us a good size-up of the human relations job we have to do out in our factories.

Several of our staff departments are working on that job. For example, plant newspapers, handbooks, and other publications have been put out or are being prepared. A workable system is being developed for obtaining employee suggestions and rewarding the best suggestions. We are seriously considering ways of using opinion-gathering polls more extensively. From the first, I wanted some way of communicating with our men, so I’ve written personal letters to them from time to time. The replies have been particularly useful, including those making pointed criticisms of our organization. We’re bringing our hiring procedures up to snuff, too. Today every applicant receives a personal interview, in which the interviewer’s number one job is to listen and try to learn what the applicant’s interests, experience, and aptitudes are. We still have a lot to learn about how to fit men into the jobs best suited for them. In that and in every other point of contact between our workers and management, we’re going to continue to develop by experience better ways and means of meeting our human relations goals.

MR. LILLEY. — Would you summarize for me what you consider to be the most important approach to these human relations problems?

MR. FORD. — I have a deep-rooted conviction that our staff departments won’t carry us too far unless the men in our line organization — foremen, the supervisors who are over foremen, and their supervisors on up the line — learn to treat every individual who works with them the way a human being expects and deserves to be treated. Contacts with personnel and other special departments, publications, and speeches are not enough, unless the boss talks and lives what the speechmakers say.

The man you work for day after day and year after year, whether he’s a foreman or superintendent or whatever, is the one who represents the Company to you. He is the Company to you. And if the man you work for gets pushed around by his boss, gets orders issued to him with “never mind why,”there’s an awful good chance you are going to get pushed around too.

The nub of our problem is building a team of foremen, superintendents, department and division heads who realize that we can get our job done best by really getting along with people.

There aren’t any easy answers.