Henry Ford's Counterattack On FDR

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Posted: Mar 02, 2020 10:13 AM
Henry Ford's Counterattack On FDR

Source: AP Photo

As mentioned in my previous article, the ill-tempered Hugh Johnson and the tyrant Roosevelt could not bully Henry Ford into cooperating with the ill-fated NRA (National Recovery Administration). When others would not cooperate, Johnson “did use the arm of the law to jail many men who refused to jeopardize their businesses by complying with NRA codes.”[1] Yet, Ford refuted Johnson and Roosevelt.[2] Ford stands, not only as an example of American Exceptionalism for his innovation in automobiles and manufacturing, but also for his patriotic rejection of the tyrannical efforts of FDR and his cronies.

Henry Ford would demean men “whose particular genius is to try to run other people’s business,” and knew government had “not any too rosy a record in running itself this far.” Ford was also “under the impression that to manage a business properly you ought to know something about it.”[3] In fact, Henry Ford’s top operations manager, Charles Sorensen, described the situation and Ford’s defiance:

The year 1933 ushered in the New Deal and Franklin Roosevelt as president. It also brought the National Industrial Recovery Act, with hard-boiled, gravel-voiced General Hugh Johnson as administrator. Under NRA’s weird-looking “Blue Eagle” emblem, freedom of enterprise was brushed aside. Each industry had a code of operations which regulated wages and hours and required postings of signs that workers were free to organize for collective bargaining.

Henry Ford would have nothing to do with either the Blue Eagle or the automobile industry’s code. He balked at the code’s collective bargaining provisions and said that under the Blue Eagle he would have to share business and production secrets with his competitors. The Roosevelt Administration put every possible pressure on him to sign the auto code. Government contracts for Ford cars and trucks were canceled. Johnson suggested a boycott of Ford and turned in his Lincoln car. Threats came out of Washington that Ford would be closed down and the government would take over his plant. His reply was pure defiance.[4]

Besides Ford’s complete rejection of the NRA due to his staunch belief in the free-market and open competition and rejection of intervention; he also already complied with – actually excelled beyond – nearly all of the wage rate and work hour requirements due to his efficiency as a manufacturer and high margins while offering competitive prices. Thus, from this perspective Ford also saw no reason to sign the codes since he was already meeting or exceeding the requirements.[5] Ford’s position greatly irritated Roosevelt, who told Thomas Edison’s son, Charles, “If Henry [would] quit being a damn fool… and call me on the telephone I would be glad to talk to him.”[6] But Ford never called. The battle continued to wage when at one point statements issued by the Ford Motor Company “accused Johnson of assuming the airs of a dictator” all the while Ford was complying with the law.[7]

Towards the later part of 1934, President Roosevelt reached out a third time to talk directly to Henry Ford. Ford refused yet again, albeit in a polite manner. He indirectly supported the president’s efforts stating “the President was doing the best he could in an extraordinarily difficult situation.”[8] Ford actually sent his son, Edsel, in his stead, to meet with Roosevelt. Roosevelt capitulated his stance on Henry Ford, as the NRA had begun crumbling and Johnson resigned in September 1934. Roosevelt also knew that Ford’s production might would be critical in case war production would come to pass. Despite refusing to sign the code and the threats from Johnson and the government, Ford continued to prosper in the dismal economy, massively investing in his operations and “making [improvements] which outstripped that of his two rivals.” Ford’s resolute belief in free-market competition and liberty of the business enterprise easily allowed him to thumb his nose at the administration and the rest of industry – and thrive! After a pleasant meeting and picnic with Roosevelt, Edsel Ford told reporters, “We have not signed an NRA compliance certificate, and have no intention of doing so. However, we are complying 100 percent and more with the code requirements.”[9]

Ford’s public relations representative, William Cameron, wrote eloquently that, “There can be no doubt […] that proposals are being made in the name of recovery that have nothing to do with recovery, and that seriously affect[s] the fundamental American idea. We doubt that it is necessary to scrap America in order to achieve recovery.”[10] But, perhaps Henry Ford summed it up best about what American Exceptionalism means for business and industry, and also sent a clear message to the Roosevelt administration, stating it would be better for the country as a whole:

…if American industrialists would just forget these alphabet schemes and take hold of their industries and run them with good, sounds American business sense.”[11]

[1] Burton W. Folsom, Jr., 2008, New Deal or Raw Deal?  How FDR’s Economic Legacy has Damaged America, (New York, NY: Threshold Editions), p. 53.

[2] For details about why Ford rejected the NRA see Burton W. Folsom, Jr., 2008, New Deal or Raw Deal?  How FDR’s Economic Legacy has Damaged America, (New York, NY: Threshold Editions), pp. 48-49, and Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), pp. 15-41.

[3] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), p. 17.

[4] Charles E. Sorensen, 1956, My Forty Years with Ford, (New York, NY: WW Norton & Company), p. 258.

[5] For details about why Ford rejected the NRA see Burton W. Folsom, Jr., 2008, New Deal or Raw Deal?  How FDR’s Economic Legacy has Damaged America, (New York, NY: Threshold Editions), pp. 48-49, and Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), pp. 20-22.

[6] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), p. 21.

[7] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), p. 22.

[8] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), p. 25.

[9] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), pp. 25-26.

[10] C.J. McNair and Richard Vangermeersch, 1998, Total Capacity Management: Optimizing at the Operational, Tactical, and Strategic Levels, (Boca Raton, FL: St Lucie Press, The IMA Foundation for Applied Research, Inc.), p. 186.

[11] Allan Nevins and Frank Ernest Hill, 1963, Ford: Decline and Rebirth 1933-1962, (New York, NY: Charles Scribner’s Sons), p. 26.