The first Model Ts were barely under $1,000 each, but by 1920 Ford had cut the price to a mere $355-roughly $3,500 today. With all of their manufactured steel, vulcanized rubber, and processed plate glass, Model Ts were selling for less than 30 cents a pound-perhaps the best bargain in the industrialized world.
How could Ford repeatedly cut prices and boost quality at the same time? His ingenuity took the assembly line method of production to new heights of productivity and efficiency, but he shook the industrial world to its foundations with an amazing gamble: he doubled wages and reduced working hours. "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made," Ford wrote in the early 1920s. The five-dollar-a-day wage policy reduced turnover, improved morale, and brought some of the best workers to his plants in Michigan. Ford even hired thousands of handicapped but capable workers, including bedridden patients who happily screwed nuts and bolts together on mini-assembly lines in their rooms.
To Ford, the issues of minimum wages, maximum working hours, the hiring of workers, and the pace of industrial productivity should be resolved by the market, not the government. "Our help does not come from Washington, but from ourselves," he wrote. "The government is a servant and never should be anything but a servant.".
Henry Ford made the best car at the lowest price and earned a billion dollars. Only when he became complacent with the Model T and refused to innovate did he fall from the top. "It is strange," he wrote in 1926, "how, just as soon as an article becomes successful, somebody starts to think that it would be more successful if only it were different. There is a tendency to keep monkeying with styles and to spoil a good thing by changing it." He purportedly once said that customers could have any color of car they wanted, so long as it was black.
