Forty-three percent of cars built in Mexico and Canada are Detroit-brand vehicles, the Detroit Free Press said. Similarly, 47% of vehicles sold in the United States were imported. Historically, automobile production revolutionized the business of factory labor.
The so-called “Detroit Three”—General Motors, Ford Motor Company, and Fiat Chrysler Automobiles US—have outsourced so much vehicle production to other North American countries that they constitute nearly half of the cars produced there. According to the Detroit Free Press article, GM and Fiat Chrysler have recently doubled down on automobile production in Mexico and Brazil, respectively, earning the ire of critics. Their judgments likely come in light of the monumental effects that titans of the automobile industry like Henry Ford have had on the American economy over the years.
The Victors of the Early Auto Industry
As so-called “horseless carriages” flourished, so did the countless people involved in their production. “From 1895 to 1910, the whole auto industry came into existence,” said Dr. Patrick N. Allitt, the Cahoon Family Professor of American History at Emory University. “The proliferation of the car industry was of great benefit also to the makers of tires, of leather for seats, of credit to help buyers pay for cars, and the development of the insurance industry as it quickly became clear that people were, in fact, going to sometimes crash them.”
Craftsmen of car components weren’t the only winners as the industry boomed. Henry Ford is famous for pioneering the assembly line model to produce his Model T, which he did in order to make the automobile—then a high-priced item and status symbol—cheaper to make and thus more affordable to average consumers. “It’s difficult to emphasize too strongly that Ford was thinking about cars for everyone when cars were still an extraordinary luxury item that only a tiny minority of people could afford to buy because the early cars’ prices were so very high,” Dr. Allitt said.
Pathways to Success in Early American Auto Industry
In order to create more customers for his Model T cars, Henry Ford decided to raise the salaries of his workers, making them beneficiaries of the very business model at which they toiled. “He made the dramatic decision to more than double the average wage in his factories from about $1.50 per day to $5.00 per day, and at the same time cut working hours from nine to eight,” Dr. Allitt said.
Ford saw three advantages to this move. It lowered turnover rates by encouraging workers to stay at their jobs, it provided terrific publicity to his company as a friend to the working man, and it put his workers into a financial position of being able to afford a Model T of their own—based on an installment plan that Ford himself adapted from Singer for purchasing sewing machines.
Today’s global market and culture of outsourcing look very different from the burgeoning car movement that the Model T conquered in the 1910s and 1920s. However, the impact of the auto industry on American culture and economy is hard to shake. If the “Detroit Three” can regain favor in the public eye as Henry Ford did over a century ago, their critics will have far less ammunition.
Dr. Patrick N. Allitt contributed to this article. Dr. Allitt is the Cahoon Family Professor of American History at Emory University, where he has taught since 1988. The holder of a doctorate in history from the University of California, Berkeley, Professor Allitt—an Oxford University graduate—has also taught American religious history at Harvard Divinity School.