The Rouge & the Black

(See Cover) In the folklore of American capital ism, the rich boy sometimes seems to have less chance of success than the poor boy. Americans build fortunes, but sel dom dynasties. And enough fortunes have been wasted away by the sons of rich men to give truth to the saying: "From shirtsleeves to shirtsleeves in three gen erations." No one had a better chance to make this saying come true again than the Ford brothers, Henry, Benson and William, grandsons of the unpredictable, profound ly radical genius who began the age of mass production and created a billion-dollar empire out of a simple idea : "A car for the masses." By its balance sheet alone, the empire left at the end of World War II by Old Henry Ford to Henry, Ben and Billy-made them perhaps the richest young men in the world. It comprised 150,000 work ers and 48 plants in 23 countries. In the till was $680 million in cash and bonds.

But the statistical evidence of wealth was deceiving; the vast empire was actu ally as shaky and ready to col lapse as a 25-year-old model T trying to make its way through deep sand. Once the world's biggest automaker. Ford had seen its share of U.S. auto sales drop from 40% in 1930 to 21% in the first postwar year of car production. What was more, in 1946, Ford was losing money at such a clip--$55 million in six months--that even its vast reserves might soon be exhausted.

None of the three rich young men really knew whether the empire could be saved. But in a wry twist of the old saw, Henry, the eldest, took off his coat, rolled up his shirtsleeves and decided to try. Was he frightened by the responsibility? Says Henry: "I didn't know enough to be frightened."

"We Want to Be First." Actually young Henry II had grown up learning about the auto business as other children learn about baseball or stamp collecting. And, as it turned out, he knew what to do about the failing company. He swept out all the old, tired policies and corporate deadwood, brought in new, young ideas and a new, young team to put them into effect. As a result, the company was on the comeback road when brother Benson Ford joined him at the Rouge plant in 1947-Billy Ford joined his brothers three years later. Henry helped teach them their jobs and, like an elder brother, bore down to see that they did them--and was frequently told to "go to hell" for his pains.

Like all brothers, they bickered and fought--over how many cars to make, and how the cars should look. "We do a lot of needling among ourselves," says Billy.

"Of course, in the Ford family, everyone thinks he's a stylist. Ben is perhaps the most serious. Henry will give you a hard time on everything and usually does. We are all reasonably opinionated. We agree on policy matters, but when we get into operational matters we disagree quite violently at times. But on one thing we all agree: what we do make, we want to be first with." Score Card. In their burning desire to be first, the brothers and their management team not only saved the company; they transformed and expanded it in a way that would have dazzled even Old Henry. Last week, as the Ford company celebrated its 50th anniversary, the six-year comeback was best measured in the cold cash of profits. Although Ford still keeps its finances secret, enough information was let out by the family to give the U.S. business world, for the first time, an accurate appraisal of the empire's financial position. * Over the past six years, the company's net profits after taxes totaled $870 million (see table), more than the entire worth of the company when young Henry took over. To the thousands of people invited to Dearborn for the anniversary celebration, there were many other things about the new empire which the three brothers were proud to talk about -- or show off.

Among them: P: Ford Motor Co. has spent $900 million postwar, much of it from profits, for new plants and modernization. It will spend $500 million more in the next two years to boost its present car-making capacity of 2,378,000 a year by another 30%. The new plants will span the continent: a $100 million assembly plant near San Francisco, a $75 million plant near Louisville, and a $90.0 million one at Mahwah, NJ. Other millions will be spent to almost double the facilities of present plants in Cleveland and Cincinnati, retool a tank plant at Livonia, Mich, for auto-transmission production.

P: In Dearborn, a new $80 million Engineering & Research Laboratory was opened, giving Ford its first research facilities as up-to-date as G.M.'s. In it, hundreds of scientists and engineers will not only seek ways to improve cars, but will work on pure research. P: A new Continental is tentatively scheduled for 1956 to try to recapture the prestige of the old Lincoln Continental, which many automobile buffs still consider the best-looking U.S. car ever made. P:A new hard-top convertible, the Syrtis, is also scheduled for '56. Its metal top slides into the luggage compartment.

String Saver. As part of the anniversary celebration, the Ford family also formally opened to historians an amazing collection of personal possessions which Old Henry had gathered at Fair Lane, his huge, grey stone mansion, not far from the Rouge plant. After Mrs. Ford died in 1950, the family sent a crew of archivists to look through the memorabilia stored there. They were astounded by what they found. Some of the 55 rooms in the mansion were so crammed with clocks, rare books, cameras, music boxes, files, unpublished photographs and crates of papers that the doors could hardly be opened.

Henry Ford never threw anything away. Fair Lane's store will not only enrich future biographies of Ford; it is also a great hoard of source material on the history of the auto age. Archivists have still studied only a tiny part of the collection.

In the rich storehouse of Americana at Fair Lane were the love letters of Ford to his wife, Clara, a paper boy's receipt for 45-c- that Ford paid him in 1894, a receipted bill for four pounds of trout (price 72-c-) delivered in 1906, the bill for the gasoline for his first car, letters from Presidents and crowned heads, and thousands of letters that Ford did not even bother to open--some containing thousands of dollars. There were the first rough sketches of cars and of assembly plants, hundreds of "jotbooks" into which Ford noted everything that interested him --new ideas, new words (garrulous, adulation, ambrosia), and the sly maxims he coined ("A bore is a fellow who opens his mouth and puts his feats in it" and "He took misfortune like a man--blamed it on his wife").

"One in Every Family." In his lifetime. Henry Ford was damned from time to time as a Communist (for his $5-a-day wage), an anarchist, an anti-Semite, a Fascist; he was praised as the greatest living American, whose diverse interests (e.g., planes, rubber growing, synthetics, early American furniture) made him seem a kind of machine-age Leonardo. Now the archives reveal for the first time what manner of man he really was.

_ In one of his dog-eared jotbooks was his first notation of his single-minded philosophy of production, which put the world on wheels: "A car for the masses . . . One in every family . . . Nothing will do as much to make good roads as a car in every family." But instead of a car for the masses, his first two companies, formed in 1899 and 1901, made expensive racing cars. In one of them, Ford became the first man to travel 90 m.p.h., and won such fame as a racer that he wrote, optimistically, to his wife's brother: "There is a barrel of money in this business." There wasn't: both companies went bankrupt.

In 1903, aged 40, he raised $28,000 and started again, this time to make his "car for the masses." Nevertheless, his Ford Motor Co. at one point was only $223.65 short of bankruptcy again. It was saved only by the arrival of an $850 check from a Dr. Pfenning of Chicago, who bought the company's first car. In two years the company was so successful it could proudly mail out a 100% dividend.

Through the Courthouse. Early dealers had their problems. One Ohio dealer worriedly asked Ford if he should bet a competitor $500 that the model S Ford could beat a rival car to Columbus and back. Wrote back confident Mr. Ford: "Is it any credit for the U.S. to whip Venezuela? Take a bet like that with any car." To make a sale, a Kentucky dealer had to drive a Ford up the courthouse steps to prove that the car was as sturdy as a horse. For others who also raised this point, Ford had a brochure: "Autos do the work of three horses, and there is always the possibility that the horse may die ... while the automobile can always be repaired at a nominal cost."

Soon the car crowded out the horse. As the company became the No. 1 carmaker, Ford quarreled so bitterly with his stockholders that he decided to buy them out. In 1919 he paid them off with $75 million.* By 1923 he was able to turn out 2,201,188 cars--a record his company did not better until 1950's 2,364,508. Ford went everywhere, met everyone, and had opinions on everything. He became such a national hero that millions urged him to run for President. When he refused in 1923, Cal Coolidge, who wanted the job, sent him a telegram of thanks: IT is

NATURALLY A GREAT GRATIFICATION . . .

Anarchist to Anarchist. By 1927, slipping sales made Ford realize that his model T was out of fashion, and he shifted to the snappier, more powerful model A in time to avert disaster. But he could still find time to interest himself in others' troubles. Ford, who had been called an anarchist by the Chicago Tribune in 1916, spoke out against a death sentence for the Anarchists Sacco and Vanzetti. Two days before the execution in Boston, Vanzetti wrote Ford: "I have always claimed my intire innocence and I will die affirming it. We have an extraordinary mass of newly discovered evidence of such weight and nature to impose our release ... I beg your pardon for my so many words .'. ."

Later, after Ford changed over to a more powerful V-8 engine, he got another kind of note from Public Enemy No. i, John Dillinger, who made his getaways in Fords. Wrote Dillinger, passing through Detroit: "Hello Old Pal. Arrived here at 10 a.m. today. Would like to drop in and see you. You have a wonderful car . . . It's a treat to drive one. Your slogan should be: 'Drive a Ford and watch the other cars fall behind you.' I can make any other car take a Ford's dust. Bye-bye."

Ford, who thought the best government was that which governed the least, bitterly fought all the New Deal's works as well as the unions. His bodyguard and aide, Harry Bennett, onetime boxer who had become a top power in the company, was the man who barred the doors. But it was Ford himself who was responsible for the union-busting as his veteran secretary, Ernest Liebold, made clear in a tape recording for the archives: "Nobody was doing anything around Dearborn . . . that Mr. Ford didn't agree with 100%." In 1941, when the C.I.O. had ringed the Rouge plant with pickets and barricaded the entrances, the unpredictable Henry Ford suddenly sent word that he would not only deal with the union but give it everything it wanted--closed shop, checkoff and all. In another tape-recorded interview, a friend of the Fords explained why: "His wife Clara refused to let him fight it out. She didn't want to see a lot of rioting and bloodshed because of the strike."

The Troubles. It was a dramatic gesture, but no single change could save the ailing Ford Motor Co. The Ford car was second to Chevrolet, and the company had fallen far behind the industry in engineering and styling. World War II, with its big military orders, gave the company a breather. But at war's end, after the death of Edsel Ford and with the rapid aging of Old Henry, the tough job of saving the company was handed to young Henry (who signs his office memos HF II).

HF II soon showed that he could act with the decision of his grandfather. One of his first acts was to fire Harry Bennett, who was virtually running the company, and who was a symbol of union-busting to the U.A.W.-C.I.O. After that, there was no question of who was the new boss of the empire.

Young Henry brought in Ernest R. Breech, a crack production man who had run three General Motors subsidiaries, and made him executive vice president. When he joined Ford, said Breech, "there was no second team. We had nothing but top bosses and workers. We had no real research. Even the new [postwar] engine was no good; the Rouge was obsolete, and the company had lost $55 million in the first half of '46. About all we had that was any 'good was the name of Ford."

The Solutions. Together, Breech and HF II performed radical surgery. They shucked off all Old Henry Ford's peripheral enterprises, such as his Brazilian rubber plantations, his money-losing deal to make Harry Ferguson's tractors,* his experimental farms. They had another big problem: the inheritance taxes on the $208 million estates of Henry and Edsel. Luckily, Old Henry himself left $28 million in cash, and the family got the rest by loans from the company and sales of property. They kept control in the family by keeping the 172,645 shares of voting stock (now held in equal shares by Mrs. Edsel Ford and her sons and daughter), while the 3,089,908 shares of non-voting stock went to the Ford Foundation.

After reorganizing the company from top to bottom, Ford and Breech began to plow back profits and cash on hand into modernization and expansion.

As a whole new management team was assembled, Ford demonstrated that he had inherited his grandfather's capacities for radical innovations. He ordered tests to pick out promising young men on the production line to send them to school for training as managers. In spite of the fact that the company was overloaded with older workers, the corporation took on an $8,000,000 burden to set up pensions. But it reaped dividends in efficiency. Ford became a young man's company: the average age of its 35,000 salaried men is only 38, and that of its 130.000 production workers is 42. The Ford local of the union, the U.A.W.'s biggest, was skeptical of all these changes, notably because the long years of union-busting had given the local a hard core of Communists and fellow travelers. But its leaders have grudgingly doffed their hats to the new management. Last week, after Ford, with no fanfare, adopted a proposal to train Negro women without discrimination, the local's paper wrote: "There is a revolution in the Rouge on the entire question of the company's social responsibilities . . ."

The New Look. There was also a revolution in car design and style. Old Henry Ford had never given a hoot about either ("Give them any color they want as long as it's black"). Edsel, who had a flair for design, brought out the Lincoln Continental in 1939. But he made little progress in getting the company to set up its own design department. Breech and young Henry made that a first order of business. They also hired George Walker, a noted independent Detroit designer.

Walker's first product was the '49 Ford --the company's first completely redesigned postwar model--and it was an immediate hit. The long, graceful lines have proved so popular that the company will not make a complete body change until the '56 Ford (already mocked up). However, the engine for next year's Ford has been redesigned to step it up from no to 125 h.p.

With the empire in top shape at home, the new management went to work to cure the ills of its outposts abroad (its. companies are usually 60% owned by Ford and 40% by foreign nationals). Some plants had been bombed and all were hampered by currency restrictions. But most of them are now doing fine. British Ford cars (paced by the fast-selling Zephyr, which won in its class in Europe's tough Monte Carlo rally this year) rank third in popularity in England (after Austin and Morris). Ford of Germany's squat, square Taunus is the fourth-best seller in West Germany. Ford of France is still losing money. To rescue it, the company recently sent over a new manager, Jack Reith, 38, one of a group of ex-Wright Field statistical control experts who became known as Ford's "whiz kids." Whiz Kid Reith, says HF II, "will put Ford of France in the black if anybody can."

Rich Reward. Trie management team that put the whole works in the black is getting rewards commensurate with its achievement. To get the new men the Ford company wanted--and to keep valuable old hands from being lured away--the Ford brothers let the top brass write out their own incentive plan. A new company, Dearborn Motors, Inc., was set up by the executives as the selling agent for tractors, and the stock was split among Breech, former Sales Manager Jack Davis, Production Boss Del Harder, Labor Boss John Bugas, Ford Division Boss Crusoe and eight others.

The Ford company will soon buy up the stock of Dearborn Motors at a price which will give the holders huge capital gains taxable at only 26%. As for Breech, whose 20% of Dearborn stock is the biggest bloc, his investment will bring him a fortune so that he can retire any time he wishes, though he shows no sign of doing so.

"Health Is Catching." Henry, Benson and Billy Ford are not yet ready to run their company alone, even though they have been training for the job most of their lives. When they visited their grandfather as children, he taught them the joys of simple things, let them sleep in a barn because he thought that was a thrill every child should have, took them hunting birds' nests and tramping through his fields. He dinned into them pithy saws ("Health is catching") which extolled clean living and hard work. He and son Edsel saw to it that their toys were useful, mechanical things. Billy, who looks most like his grandfather and inherited most of his zest for tinkering with engines, got a midget racer when he was only 14. Though father Edsel put a governor on it to hold it down to 40 m.p.h., Billy found a way to remove it,, and roared around the Ford test track at breakneck speed. None of the brothers ever got into the usual adolescent scrapes; they were too closely guarded because of the family's fear of kidnapers.

The brothers all attended Connecticut's Hotchkiss School, and in summer, worked in the Rouge or other plants getting their hands greasy. They kept up this apprenticeship during college. None was an outstanding scholar. Henry quit Yale in his senior year ('40) with insufficient credits to graduate, and Benson, a sophomore, quit Princeton the same year. Only Billy (Yale '50) graduated.

The brothers had creditable, if unexciting, war records. At 17, Billy volunteered for the Naval Air Force, spent 2 1/2 years "trying to get into an airplane but washing them instead," came out a naval cadet. Ben, turned down by his draft board because of defective vision, also volunteered, served in Newfoundland with the Air Force and emerged an administrative captain. As a naval lieutenant, ., Henry was stationed at the Ford company, where he taught mathematics to sailors until released from the service to rejoin the company after his father's death.

The Brothers. The three Ford broth ers not only differ markedly in looks but in personalities. Henry, now 35, is tall (6 ft.) and plumpish, has an air of casual charm, a ring of earnestness in his voice, and an articulateness that makes him an ideal spokesman for the company. As the grandson of a man whose every pronouncement used to be Page One and free advertising, Henry has worked hard at his own role as the headline-winning industrialist. He has the pragmatic common sense of his grandfather, his father's even temper. Like Old Henry, he reads little. He is a "tell it to me" man who learns by ear, and has his grandfather's same sharp-eyed way of looking about him and asking, "What's the good of this?" While his family is Protestant (Episcopal), Henry became a Roman Catholic before his marriage in 1940 to the former Anne McDonnell, granddaughter of famed Inventor Thomas E. Murray, once an associate of Thomas E. Edison.

Benson, 33, is shorter (5 ft. 9 in.) and chunkier than Henry, and more of a desk man. For a while he liked nightclubs more than the office. But now he is the hardest worker of the three. He puts in long hours as boss of the Lincoln-Mercury division, has not had time for a round of golf in two years. But he finds time to cruise on Lake St. Clair on weekends in his 42-ft. cabin cruiser with his wife, the former Edith McNaughton of Detroit, and their two children. Like Henry, Ben has also developed into an able speaker. "When we decided it was time for him to make a speech to the Washington dealers," Ernie Breech recalls, "he stammered and stumbled, and I think he would have fallen on his face if he hadn't been holding on to the podium." Now Ben has plenty of confidence on his feet.

The 3 a.m. Call. Billy Ford, 28, is the irrepressible kid brother. He is the smallest (5 ft. 7 in.), and his wiry, 150-lb. frame is full of bounce. He not only has Old Henry's mechanical flair but his passion for collecting (he owns 200 old-fashioned guns). He is married to Martha Firestone, granddaughter of Harvey

Firestone, his grandfather's close friend.

Nimble-footed Billy, once a junior ten nis champion, is now a first-class golfer: Last fall brother Henry, getting home late one night, put in a 3 a.m. call to Billy to give him an elder brother's warning. Billy was scheduled to address a dealers' meeting at Detroit that night, but he also wanted to play in the annual amateur-professional golf tournament at White Sulphur Springs, W. Va. "Forget your golf," said Henry, "and be on deck for that meeting." With HF II in the aud ence, Billy made the speech, then grabbed a plane to Goldsboro, N. C., hired a car and drove the remaining 90 miles to the Greenbrier, arriving at 7:30 a.m. He teed off at 10 without any sleep. He shot a 71, and with his pro partner, George Fazio, won first prize. He flew home, wait ed till 3 a.m., then phoned Henry. Said Billy: "I won the tournament." Billy, who also likes to race cars, is go ing to drive Henry Ford's famed old 1902 racer 999 at the Indianapolis Speedway on Memorial Day, and will also drive a Ford there to pace the start of the race.

The brothers live not far from each other in Grosse Point, in spacious, $50,000 homes, but they go their own ways socially, don't see each other much out side their work. They are all camera and movie fans, like to rent commercial films and show them in their homes. The broth ers all depend heavily on the advice of their mother, a determined and steadfast woman, now in her late 50s, who has done most to keep her sons prudently husbanding the family's legacy.

Tough Jobs. While young Henry is the overall boss, his brothers have their separate company roosts to rule. Both were handed tough jobs, and no one has gone out of his way to help them. When Ben was made boss of the Lincoln-Mercury division in 1948, it was in poor shape. It had to assemble its cars in an ancient shop he called "a barn," had no manufacturing facilities, bought all its parts from the other Ford divisions -- often at prices Ben thought too high. On top of that, the public didn't care much for the Mercury and Lincoln designs. Says HF II: "We made some bum cars." Just as Henry had to reorganize the whole company, Benson had to shake up his division. He put together his own management team, persuaded the 19-man Ford Administrative Committee (on which he and his brothers sit) to let him modernize his production facilities, got together a crew of designers. The new team liked to work with him. Says Ben: "You can't have people work wholeheartedly with you if you say 'Do it this way.' You've got to ask them their opinion, because often enough you might be in error. In a business as big as this one, no one knows everything."

This year Ben has a car he wants his friends to buy. His Mercury is selling so well that he hopes to make 300,000 this year (v. 178,000 last year), 6% of the entire auto market. His Lincoln is also vastly improved. With the most powerful engine (205 h.p.) in an American car, Lincolns came in one, two, three in Mexico's last border-to-border race.

Continental Campaign. It was Ben who started the campaign to put out a new Continental because he wanted a prestige car for the company, and he quickly persuaded Billy to join him. Billy was a shrewd ally. Recently, before the formal monthly meeting of the Administrative Committee. Billy buttonholed each member separately and asked: "Don't you think it's a good idea to build a Continental?" Most agreed, although Breech thought Ford ought to stick to money-making products. At the meeting, Billy clinched things by saying: "Nearly all of you favor building a Continental, so why don't you approve it?" They did.

But when Billy got the job of designing it, he was on his own. HF II gave him only one man and said, "Bill, it's your problem." By luring away designers from other departments and hiring them from outside, Billy put together a null special projects department, designed an experimental model, and for a while carefully kept it hidden, even from his brothers. When he showed it off, he got a shock. Brother Ben's designers had been secretly working on a 1956 Lincoln. Says Ernie Breech: "It practically floored Billy, for Ben's looked better than his. Billy took it well, went back to his shop and worked out a new three-eighths scale model. It looks fine."

Battleground Ahead. With this kind of bounce and zest, the top brass looks forward to the fast-approaching day of a buyers' market in cars. They think that will be their chance to make the Ford car once more the No. i seller, knock out Chevrolet. At present, G.M. and Ford are selling all the Chevvys and Fords they can make. Since G.M. has greater productive capacity, it can turn out more Chevvys than Ford can make Fords.

Ford's half-billion in new expansion will change all that, should make Ford and Chewy production facilities equal. (The Ford company, which made a total of 1,678,954 cars and trucks last year, is well behind G.M.'s total production of 2,234,-397). But when the time of production equality comes--and buyers get more choosy--the Ford brothers think they will wrest back the title they lost to Chewy 18 years ago. Said HF II earnestly: "As soon as we can outproduce them, we'll outsell them."

* And to their mother. Mrs. Edsel Ford, and sister, Josephine. Edsel Ford died of cancer in 1943; Henry Ford, aging and ailing, lived on till 1947. * The biggest share went to Ford Motor's Secretary James Couzens, later U.S. Senator from Michigan, who got $30 million. The Dodge Brothers, who had taken stock in lieu of payment for some of the engines they supplied Ford, got $25 million, which helped buttress their own famed company. * An act which later cost Ford $9,000,000 to settle Ferguson's patent infringement suit.

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