Turning Back To Village Industry
It has always been taken for granted that big business brings in its wake big buildings and great numbers of men working in these big buildings and going home at night to slums or hovels. And many well-meaning people have opposed big business because they saw in it only the slum with all that the slum means.
Big business animated only by the profit motive makes all this inevitable. The plants are concentrated, and they open up and shut down according to whether the getting is good or bad. Under these conditions the workman never has enough ahead in money to choose where he may live. And also he has been compelled for lack of transportation to live within walking distance of his work, or to spend a sizable part of his income and energy riding on crowded cars. He has had to take what he could get in the way of housing. And as long as industry believes in concentration and does not follow the wage motive, just so long will this condition continue.
But the remedy is not to be found in any charitable housing schemes. If you apply the wage theory to the building of houses, then it will be easily possible to build good houses which self-respecting people can live in at a rental they can pay. And the owners of those houses can earn a profit — any sort of operation well conducted will earn a profit. If it does not, something is fundamentally wrong with the plan. Turning to charity is always bad, but especially when applied to conditions brought about by industry. Industry, properly managed, can take care of itself and everyone connected with it. Charity merely covers up ills that ought to be and can be cured.
Big business, however, did not concentrate because there was anything in big business which made for concentration. Really big business cannot concentrate in one place, for the reason that transportation charges, aside from all other factors, discourage it. A great business has to have far-flung markets, and in these days it does not pay to transport heavy products, raw or finished, over long distances. But what, some years ago, was thought to be big business did concentrate.
Similar sorts of industries have always tended to group in neighbourhoods. And big business simply followed little business because no one stopped to think that little business and big business have more important differences than size. There is a kind of business which just swells and becomes cumbersome and which is sometimes thought to be big business, but it is only little business suffering from elephantiasis. The big business which is worthwhile grows to power. It is not size without strength. It is great and quick and strong. Any business which truly serves must grow in resource and might — though that resource and might will quickly dwindle when the service which built it ceases.
There is now no reason at all for building a factory in a large city or near a “labour market,” and there are many compelling reasons for not doing so. We started, as has been told in My Life and Work, in a small brick building in Detroit, and some years later moved to a larger building, also in the city. When the time came for greater expansion, we moved out into what was then a suburb of Detroit — Highland Park — and there for years we made our automobiles. We grew so quickly that we followed the perfectly natural course of expanding Highland Park. We then were buying far more of the automobile than we made, and although Highland Park grew to be a factory, it was for a long time essentially an assembling plant. It was when we reached a production of one thousand cars a day and jammed the freight facilities of Detroit that we began seriously to examine into the wisdom of having so large a plant.
We approached the subject from several directions. First, it did not seem to be in the best interests of business in general to concentrate so much wage-purchasing power in a single locality, both because the people who bought our product ought to have some of the advantages of the sums disbursed in the making and also because our own men were becoming crowded and being profiteered upon. They were not getting value for the money they earned.
Second, the number of men became so large that the hours had to be so arranged that not too many men would get through or come on at the one time — otherwise transportation could not be provided. And having men going and coming all the while is not good for production. We have not for years been able to have a single pay day because of the general inconvenience it would cause, not only to ourselves and to our workmen, but to the community in general. To pay out millions of dollars on a certain day each week would have made it necessary for the stores to carry idle stock against the pay-day rush; it would have been an invitation to crooks of all kinds to gather around on the one day when everyone had money, and it would have made local banking exceedingly difficult. On our own part, it would have made necessary a large payroll force, and even at the best, the men would have lost hours waiting for their pay. So now we pay in groups. Almost every hour of the day is payday somewhere in the plant.
We have overcome the difficulties of handling large bodies of men, but that is not enough. It is better to avoid difficulties than to overcome them, and not only do we find it easier to manage smaller plants but also — which is most important — the costs of production in the smaller plants are lower. Any change in method which results in higher costs — no matter how public spirited it may, on the surface, seem to be, is bad if it increases costs. But that we do not have to bother about, for every change of real merit results in decreased costs.
Now, to go back a bit and start with the whole theory of manufacturing and big business and how inevitably it leads one away from the great cities.
Management is not something in an office building miles away from the product. It starts with the product itself, and then, step by step, works back. A fine machine is a good thing to look upon of itself, but in a factory no machine is worth giving floor space to unless it contributes exactly and according to a plan to the doing of whatever it is you have started out to do. There need be no guesswork about a machine. People used to talk about hand work as though it were better than machine work, but now the proper kind of machine will not only work to a thousandth of an inch, or to whatever degree of accuracy is necessary, but will do it every time. It is the fault of management if a machine or series of machines leaves anything to be done by hand.
We used to think of a machine as a machine — as a thing which the employer owned and which could be used to make money for him. Now we know that a machine tool is a method for the application of power. A man can hit a harder blow with a hammer than he can with his bare fist — the man’s power is increased by the extra force of the leverage of the hammer handle, and the wear and tear on the hammer head is substituted for wear and tear on his hand. The power hammer goes much farther than the hand hammer; it puts more power at the service of the worker. Therefore, the operator on a power hammer can do so much more in a day than can a man with a hand hammer that he can earn for himself a larger wage than can the hand worker and at the same time produce a cheaper product.
A machine does not belong to the man who buys it or to the man who operates it, but to the public, and it advantages the worker and the proprietor only as they use it to the advantage of the public. It benefits the public when and only when it is used to turn out cheap, well-made, well-designed articles that satisfy a public need. The workmen and the owner cannot expect to derive a benefit from the operation or from the ownership of the machine excepting as it benefits the public. We are learning that a machine is a public servant — that it is useful only as it serves.
A place which has power and which subdivides it through whatever number of machines may be necessary to accomplish a given object is a factory and it, too, pays only as it serves. The factory may generate its own power and perform within its own walls all the operations necessary for a complete product, or, again, it may buy its power and perform only a part of the necessary operation. Its course is surely determined by the measure of service which it has adopted. It means nothing to say that you carry your product from the raw material stage to the finished article unless, under your control, this process results in a cheaper product and a better one than you could achieve by assembling instead of manufacturing. The product alone governs — that is, the public governs. And seeing that it does govern is management.
We all of us do many useless things solely through custom. Years ago the finished car was taken out and “tested,” and then taken down for crating and shipping. Testing was something that could not be dispensed with. As a matter of fact, if all the parts are made accurately and inspected as they go through, then the assembly of those parts is bound to result in machines that are exactly alike, and there is no reason at all for making a final test. Silver dollars come from the mint all alike; so should it be with cars which are made according to our system.
The business of making parts to be assembled into an automobile brought up the question of whether these parts had all to be made under one roof. There seemed to be no escape from the big factory, and there could have been no escape if our main factory had to turn out a completely assembled product. But, having found that it was wasteful completely to assemble at the factory, the reason for complete construction in a single great factory or group of factories vanished.
It has been more or less taken for granted that a factory ought to be near what is called the labour market, because it has also been taken for granted that industry had to be intermittent. If a plant is continually shutting down and opening up again, it saves money to have at hand a fund of unemployed, skilled workers who can be put into operation without the delay and expense of training. A labour market means at the least a small city or some densely populated district. A district of this character, where a majority of people take unemployment as a natural condition, certainly cannot be prosperous, and the living conditions cannot approach those necessary for a decent standard of health. The workman receiving wages this month and none next month will be most of the time in debt to the grocer, butcher, and landlord — which means that his living costs him more than it should. A man who has to buy on credit because he is unable to pay cash is not in a position to question prices. The upkeep of a city is expensive and, therefore, taxes are high and land values are high.
Therefore, to get rid of the overhead of the big city, to try to find the balance between industry and agriculture, and more widely to distribute the purchasing power of the wages we pay among people who buy our products, we began to decentralize.
We began our experiments in village industries seven years ago by taking over an old mill at Northville, about a dozen miles up the River Rouge, and turning it into a valve shop. The Rouge is only a little stream at Northville — scarcely more than a small creek and, though we planned to use water power at the beginning, we are only now getting around to installing a turbine which will furnish a part of the power. We took the mill as it stood and sent thirty-five production men and the necessary equipment from Highland Park. Our idea was to draw the men from the surrounding country, but we had to make a start with more experienced workers, especially to set up the machinery.
The making of a valve is divided by us into 21 operations, and 300 men are now employed. Those valves cost us 8 cents each to make at Highland Park, and that was thought to be a low cost. Northville is turning out 150,000 a day at a cost of 3-1/2 cents a valve. That is one part of the story. Here is a more important part. All the men live within a few miles of the plant and come to work by automobile. Many of them own farms or homes. We have not drawn men from the farms — we have added industry to farming. One worker operates a farm which requires him to have two trucks, a tractor, and a small closed car. Another man, with the aid of his wife, clears more than five hundred dollars a season on flowers. We give any man a leave of absence to work on his farm, but with the aid of machinery these farmers are out of the shops a surprisingly short while — they spend no time at all sitting around waiting for crops to come up. They have the industrial idea and are not content to be setting hens.
Now that the plant is well in operation, we take only employees from the district and none at all from Detroit. The change in the country has been remarkable. With the added purchasing power of our wages, the stores have been made larger and better, the streets have been improved, and the whole town has taken on a new life. That is one of the ways in which the wage motive inevitably works out.
Years ago the Rouge River operated many little mills along its banks, but when we began at Northville, only a little flour mill at Nankin was operating. The power of the stream had simply been allowed to go to waste, and all the villages were dwindling. The best men had gone off to Detroit for higher wages. We took the stream in hand.
At Waterford, a few miles from Northville, we put up a one-story factory which employs fifty men making the measuring instruments and gauges used by the inspectors throughout our plants in testing parts for size. The water comes a half mile through an underground tunnel which we constructed. This water goes through a turbine directly connected with an electric generator and gives forty-seven horsepower. The turbine, as in all our new hydraulic plants, is in a glass case outside the factory just to exhibit to the public what water power can do.
Next down the river is the plant at Phoenix where there is a twenty-one-foot head of water and one hundred horsepower, although only twenty-seven horsepower is used. Here we make generator cut-outs and in the operation make use of what would otherwise be scrap material from the Fordson plant and the Flat Rock plant — which is another little factory on the Huron River. The work is light and, excepting for a few operations and for repairs where mechanics are necessary, we employ only women from the surrounding country. There are at the time of writing one hundred and forty-five women and nine men, and we like to employ only those living within a radius of ten miles of the plant, although in a meritorious case we will stretch the distance. We do not take married women unless their husbands are unable to work, and we prefer the older to the younger women merely because it is usually harder for an older woman to get a job than it is for a young girl. One woman travels about fifteen miles a day to her work and rarely misses a day — she has a sick husband and four young children. Working eight hours a day, five days a week, she provides the family with a larger income than when her husband was able to work, and she still has time over for housekeeping. She is unskilled in other than household duties, but our jobs do not require much training.
In this factory there is not a task which cannot be learned by any one of ordinary intelligence within a week. Some thirty of the women operate farms, and these women may have leave of absence at any time to attend to their farms. Forty percent of them have dependents. Most of the work is performed sitting in front of belt conveyors, and there are 18 operations. These women turn out 8,900 complete units every 8 hours, and they can go to 10,000 with the present staff and equipment if necessary, and while these pieces cost us 36 cents each when made at Highland Park, they cost only 28 cents in this factory. The women seem to like the work — we always have a long waiting list, and practically no one ever leaves excepting to get married. The women are paid at the same rate as men would be, and of course, the $6.00 a day minimum rate is in force.
Next down the river comes Plymouth, which is on the site of an old flour mill. It has a 15-1/2 foot head of water and generates 26 horsepower, of which the plant uses 19 horsepower. It began making generator cut-outs, but that work was shifted to Phoenix, and now the factory turns out small taps used in threading operations in making car parts. We use about four thousand small taps a day and the factory now is up to a production of 2,000 and at a cost 10 percent less than we have to pay outside. Not only that, but we make better taps here of special steel chosen for the work the tap is to do, and there is thus another saving in the longer life of the tap. We employ 35 men and they make 40 different sizes of taps. As in all the village industries, no city men are employed; these men are from the farms and villages and while some of them have farms all at least have vegetable gardens. One man operates a farm of 13 acres, another a farm of 17, another a farm of 22 acres, and so on.
Nankin is our smallest plant. We took the old flour mill which had been standing for a century or more and converted it into a factory, at the same time preserving the old beams and all the features of the old mill excepting the dust and dirt. It is on a branch of the Rouge and we get about sixty horsepower from the turbine, of which we now use thirty. The machinery in this plant is wholly automatic, and it needs only eleven men to attend it. The parts made are very small — a day’s production may be carried on a bicycle. But the number of parts made is enormous. For instance, the machines have turned out 124,000 little rivets used in the coil unit in a single day. The men all live near by, and the plant furnishes electricity for their homes. Our costs of production are about 15 percent lower than when these same parts were made at Highland Park.
The river passing through my farm is dammed again and gives the power for my house and farm. We have, in all, nine sites on the Rouge for little water-power plants, and in the course of time we shall use all of them, for the production has proved to be economical, and we hope that we are finding the way to put industry and agriculture in the balance they should have.
The bookkeeping and management of these plants is very simple. The records show how much material goes in, how many finished articles come out, and how many people are employed. That gives all we need to know. In the smaller plants, the manager attends to the records as part of his duties, while where more men are employed, the manager has an assistant who, in addition to other duties, keeps the records. None of the plants have offices or clerical staffs. There is no need for them — and that is a saving in expense.
It is far from impossible that with automatic machinery and widespread power the manufacture of some articles may be carried on at home. The world has proceeded from hand work in the home to hand work in the shop, to power work in the shop, and now we may be around to power work in the house. Who knows?
On the Huron River we have two more hydroelectric plants bearing out the same idea of putting our factories in the country. At Flat Rock, twenty miles from Dearborn, is a dam which also serves as a railroad bridge, and a factory which we originally intended as a glass plant; but we turned it into a headlight factory. This little plant right out in the country employs an average of around five hundred men in two shifts, and it makes 500,000 headlights a month. Two men make up the whole managerial and office force.
Twenty miles up the Huron at Ypsilanti we have a larger plant developing 700 horsepower. The dam here backs up a lake covering 1,000 acres and also serves as a highway bridge.
At Hamilton, Ohio, we brought into control about five thousand horsepower through our hydroelectric generators, and gradually that plant is growing in importance, until now it employs around twenty-five hundred men and is passing out of the class of village industries. It manufactures wheels and a variety of small parts — the production of wheels has reached around fourteen thousand a day, owing to the improved machinery and methods which concentration on one kind of work inevitably brings about.
At Green Island, on the Hudson River, we have another large electrical development with upward of ten thousand horsepower, and the plant employs 1,000 men recruited from the neighbourhood. We have found it most economical to put the whole of a plant under one roof, and at Green Island the building is more than a thousand feet long. It connects by canal with Detroit and by the Hudson River with the seaboard.
All of the above are plants, but in addition we have branches which also do a deal of manufacturing. The largest of these is at St. Paul. It completes a project undertaken by the Government. During the war, work was begun on a dam 574 feet long to impound waters of the Mississippi above St. Paul so that the river would be navigable for grain carriers and other shipping bound upstream. When the dam was built, the power possibilities of the site were recognized and the foundations for a power house were incorporated in the St. Paul end of the dam.
The power project lay idle until it was leased by the Government to us. It is the second government power site developed by Ford interests, for the dam at Green Island was also built by the Government. In both instances we pay substantial rentals for the use of the dams.
The dam, which is about one city block long, provides for a head of 34 feet. On the Minneapolis side are locks to pass large river barges. On the St. Paul end the water enters the power house through “trash racks” extending the whole length of the upstream side. Theses racks prevent logs, trash, and ice from getting into the water wheels and other mechanism. The water, dropping 34 feet and controlled by wicket gates, actuated by automatic oil-operated governors, drives 4 horizontal water wheels of 4,500 horsepower capacity each. Each wheel is 20 feet in diameter. The water emerges under a platform 33 feet wide excavated for 1,500 feet where it has a broad connection with the navigation channel, thus returning the water to this channel without high velocities that would interfere with navigation.
The water turbines are directly connected to electric generators by vertical shafts and are 28 feet below the main generator room floor level. The generators are 60-cycle, 3-phase, 13,200 volts. Each generator is about 20 feet in diameter and 18 feet high above the floor. They are located in a room 160 feet long by 35 feet wide and 36 feet high. All mechanical equipment is finished in enamel with polished nickel trimmings. The floor is of red tile with black tile border. Walls are of pressed face brick. Large plate-glass windows flood the room with daylight. All power transmission lines on the property are underground.
The manufacturing and assembly building is of one-story construction and 1,400 feet long and 600 feet wide, having a floor area of more than nineteen acres.
Two underground tunnels lead from the 650-foot dock along the river, under the boulevard to the center of the plant, allowing river freight to be brought in and sent out without the least interference with boulevard traffic or damage to the natural scenery. Farther south, a third tunnel leads from the steam plant at the river’s edge to a coal-receiving platform beside the railway track east of the plant. Through this tunnel coal is brought by conveyor to the steam plant, and steam and water are carried to the assembly building.
Current for light and power is distributed from a central substation inside the plant. This substation is completely enclosed in steel and glass partitions. The motor generators contained in this unit draw their power from the hydroelectric and steam plants, which together can supply 28,000 horsepower. Exhaust steam is led into the building through the tunnel to an underground pump chamber. Here it is converted into hot water and in this form is pumped through the heating system of the plant. A separate hot-water line extends around the building behind the roof gutters, to thaw ice and snow.
Oils for the painting and enamelling departments are pumped from an outside oil house through pipes housed in a concrete tunnel terminating near the centre of the building. From here the pipes run overhead to their destination.
At Los Angeles the branch plant makes bodies and as many parts as can be made more cheaply there than at St. Paul or Detroit. For cushions, the plant consumes cotton from the Imperial Valley and from Arizona at the rate of the yield of fifteen acres a day or the yield of about forty-five hundred in a working year — which is another example of the many directions in which carrying out the wage motive benefits the community.
It is this wage motive that has been behind all of our domestic and foreign extensions. As a matter of course, it results in lower cost. But it all goes to prove that big business, keeping service to the public always in mind, must scatter through the country not only to obtain the lowest costs but also to spend the money of production among the people who purchase the product.
We have never put in a plant anywhere without raising the purchasing power and standard of living of the community, nor without increasing our own scales in that community.
One cannot hope to live on a community — one must live in a community. And the results abroad in low wage countries have been even more noteworthy than at home — which will be told in another chapter.