[ftxbro]

> "When you do the math on what that means to a median household, it is basically pricing the median completely out of the new vehicle market"

Some years ago, 'above median' didn't count as 'rich'. There were 'the masses' maybe like 90% then a bourgeoisie maybe the next ones above that, then less than 1% aristocracy and nobles. Also social class wasn't determined solely by net worth or income. Maybe we will go back to that kind of situation where the median will be considered squarely in 'the masses' class and nowhere near 'rich'.

[PaulHoule]

I dunno. Ford saw the automobile as being revolutionary only if the person who makes the automobile is able to afford the automobile. (Funny, nobody applies this one to child care.)

[tdba]

Interestingly, Ford put his money where his mouth was and dropped the price of the Model T by 5x over the production period. Very hard to imagine today.

https://en.wikipedia.org/wiki/Ford_Model_T#Price_and_product...

> I will build a motor car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces.

[Spark_Ed]

Thanks to Ford being sued by Dodge and setting the precedent that you must operate in the interests of the shareholders and not the customer or your employees.

[throw0101b]

> […] you must operate in the interests of the shareholders and not the customer or your employees.

This is a legal myth:

> The case still most often used in law schools to illustrate a director’s obligation is Dodge v. Ford Motor (1919)—even though an important 2008 paper by Lynn A. Stout explains that it’s bad law, now largely ignored by the courts. It has been cited in only one decision by Delaware courts in the past 30 years.

* https://hbr.org/2010/04/the-myth-of-shareholder-capitalism

The Stout paper, "Why We Should Stop Teaching Dodge v. Ford":

> This Essay argues that Dodge v. Fordis indeed bad law, at least when cited for the proposition that the corporate purpose is, or should be, maximizing shareholder wealth. Dodge v. Ford is a mistake, a judicial "sport," a doctrinal oddity largely irrelevant to corporate law and corporate practice. What is more, courts and legislatures alike treat it as irrelevant. In the past thirty years, the Delaware courts have cited Dodge v. Ford as authorint in only one unpublished case, and then not on the subject of corporate purpose, but on another legal question entirely.15

* https://scholarship.law.cornell.edu/facpub/724/

[frumper]

I mean, Ford could have also not sold shares(ownership) in his company then they could do what they want.

[xigency]

So if a company wants to cater to customers and employees first it needs to be organized as a co-op?

[orwin]

Yes.

By the way, SWE consultancy co-op are a thing and in my experience pay 15% more than regular consultancy.

[dwaltrip]

I believe there is also the option of structuring it as a “public benefit corporation”.

[ftxbro]

Yes this is an excellent example! When I said 'some years ago' I pretty much meant pre-USA. The Ford story is a great example of that American socio-economic differences from the previous 90/9/1 kind of distribution they had before that in England or other places.

EDIT: Also, people today would be calling Ford as literally communist

[eesmith]

What are you talking about? Ford was about as anticommunist as you could get.

He was a strong anti-Semite, a conspiracy theorist who railed against "international Jewry", who paid to print the fabricated 'The Protocols of the Elders of Zion' in the US. He was absolutely against unions. His private police force used violent opposition against unionization, like the Ford Hunger March and the Battle of the Overpass. And he admired Nazi Germany, and was literally praised by Hitler in Mein Kampf.

[ftxbro]

> What are you talking about? Ford was about as anticommunist as you could get. He was a strong anti-Semite, a conspiracy theorist who railed against "international Jewry", who paid to print the fabricated 'The Protocols of the Elders of Zion' in the US.

they would call him a communist, and also an anti-semite

[eesmith]

You haven't said why they would they call him a communist, only asserted that he would.

People use "communist" as a generic slur - there's probably people who called Joseph McCarthy a communist too.

Is that really the point you're trying to make? That calling someone "communist" has no meaning these days?

Otherwise, you can read how in 1923 Ford wrote that communism has failed. In his own words, https://archive.org/details/in.ernet.dli.2015.260931/page/n1...

"As soon as [Russia] began to run her factories by committees, they went to rack and ruin; there was more debate than production. .. The fanatics talked the people into starvation. ... Bolshevism is now crying for the brains and experience which it yesterday treated so ruthlessly. All that “reform” did to Russia was to block production. ... The same influence that drove the brains, experience, and ability out of Russia is busily engaged in raising prejudice here."

"The reason why Bolshevism did not work, and cannot work, is not economic. It does not matter whether industry is privately managed or socially controlled; it does not matter whether you call the workers’ share “wages” or “dividends”; it does not matter whether you regimentalize the people as to food, clothing, and shelter, or whether you allow them to eat, dress, and live as they like. Those are mere matters of detail. The incapacity of the Bolshevist leaders is indicated by the fuss they made over such details. Bolshevism failed because it was both unnatural and immoral."

Shortly afterwards is his philosophy:

There can be no greater absurdity and no greater disservice to humanity in general than to insist that all men are equal. Most certainly all men are not equal, and any democratic conception which strives to make men equal is only an effort to block progress. ... It is the larger men who give the leadership to the community and enable the smaller men to live with less effort."

He believed him to be one of those larger men, and his methods the way to get smaller men to live with less effort. Which included being able buy his cars.

That's not communism, that's the utopian paternalism of American technocracy.

[chollida1]

> Ford saw the automobile as being revolutionary only if the person who makes the automobile is able to make the automobile

What is this supposed to mean? I'm not sure if I'm being obtuse or its too profound for me to understand.

[mbiondi]

Maybe he means the person who makes the automobile can afford to buy an automobile?

[PaulHoule]

Fixed typo inserted by spell checker.

[stagger87]

You can find a better retelling of this elsewhere, but Ford wanted his employees to be able to purchase Ford cars. The story is often used when discussing the fairness of employees wages, or the cost of goods. Auto employees have long been considered part of the middle class. I think the OP was referring to the fact that probably many of the people making these cars can't even afford them nowadays. Given that cars are practically a necessity in most of the US, I don't think that sits right with people.

[PaulHoule]

I dunno, auto workers are better paid than many other workers.

My son is still living at our farm but he is starting his first real job. We’ve looked at options for his first car, he is interested in getting an early 1990s Buick or something like that (which can be had under $4000), the kind of used car that I find attractive (a 2010-2020 Honda) is pretty expensive ($13-$18k). We’re leaning towards taking our chances with the bucket.

[retrac]

Mass production requires mass consumption.

[tehjoker]

That doesn't make any sense. This sounds like a play for a more loyal labor force, a larger labor force, or to head off unionization. Ford was an incredible asshole that supported Nazi beliefs. He's wasn't going to just give people money.

[ROTMetro]

Quoting Ford “I will build a motor car for the great multitude. It will be so low in price that no man will be unable to own one.”. You are looking at it from a take of more people fighting over how big their slice of the pie will be. Instead of splitting up one pie, Ford wanted to make more pies and drive down the price from the efficiencies/economy of scale of making so many pies that everyone got their own. And it worked.

[PaulHoule]

Being “revolutionary” in my use is that “cars change the world”, which they did. If it was all about F1 racing and Bentleys that 1% of people could afford, cars wouldn’t be the force that they are.

[tehjoker]

Yes, driving down the unit cost increases scale and makes things more affordable. That's standard commodity capitalism. Paying your workers more, well what percent of the economy did Henry Ford control? Was it enough to substantially influence mass adoption? In any case, that's coming right out of his own pocket, so he'd have to hope that it's a marketing strategy for... other capitalists? The rest of the population? Otherwise he's just subsidizing cars and eating the costs.

Raising the wages directly for labor-related issues makes more sense.

You have to remember that rich people like Henry Ford and their estate/descendants (e.g. the Ford Foundation) like to manufacture an image for themselves. It's a nice story if instead of spreading anti-Jewish conspiracy theories, Henry Ford was a great friend to the workers with a nonsensical business concept.

"Indeed, as a vocal antisemite, he used his status as one of America's most well-known and trusted business leaders to systematically spread conspiracy theories about Jews. His screeds against Jewish people became so well-known at home and abroad that he is the only American whom Adolf Hitler compliments by name in Mein Kampf.

...

But while it dramatically reduced manufacturing time—from 12.5 hours to 93 minutes per car, allowing mass production of up to 10,000 Model T cars a day by 1925—it also made his workers’ jobs more monotonous and unsatisfying. The turnover rate at Ford’s Highland Park, Michigan factory soared to 370 percent.

To solve the problem, Ford realized it would be cheaper to raise wages (which at the time were competitive with those at other auto companies) than to continue hiring and training new people at the same pace. So on January 5, 1914, he announced that his company would double wages to $5 a day. The move proved seismic: By prompting wage hikes across the car industry, historians say, it gave American factory workers a crucial boost into the middle class, allowing many to afford their own Model Ts.

...

While $5 a day was a generous factory wage at the time, it came with a substantial catch. Technically, workers’ pay remained less than or near $2.50 a day, and the extra money was a bonus they had to earn. The year Ford introduced the bonus, he established a company Sociological Department that sent inspectors to the homes of his employees—at this point, mostly male immigrants—to make sure they were living in a way Ford approved of. Workers were denied the full $5 a day if their wives worked outside the home, if their homes were unclean, if they displayed signs of drinking or gambling, if they took in boarders or if they didn’t contribute to a savings account. "

https://www.history.com/news/henry-ford-antisemitism-worker-...

Worth noting that American companies did stuff like this in South America too. The population generally doesn't want to work on the terms of the corporation, so they "terraform" the place until they have a compliant population. Shredding extended family ties, religions, etc. Anything that would interfere with the relationship between a man and his boss.

[jandrese]

Making the product cheap enough for the common man to afford is the first and most important step in mass market adoption. You make up the loss in per-vehicle profit with volume and in the end of the day walk home with a lot more money. Ford is saying if a simple factory worker could buy his product he was going to be a rich man.

[ramesh31]

>Maybe we will go back to that kind of situation where the median will be considered squarely in 'the masses' class and nowhere near 'rich'.

We're already there. American society has stratified into three groups over the last 20 years. There's the 99th percentile elite who have hoarded over half of all overall wealth, the 90th percentile bourgeois (tech workers, lawyers, doctors, etc.) that are able to maintain a modicum of security and prosperity through real wage growth, and then the masses below who are desperately working themselves to death for near starvation wages to service the above two classes, with zero chance of economic mobility.

[candiodari]

... And yet if you replaced everyone's wages with the average (which is of course the best redistribution can achieve), $97,962, call it $100k whilst that would be an increase of just shy of $30k per year, minus tax on that ($30k), average rent ($30k), transport ($11k), food ($5k), entertainment ($4k) ... which would leave you with $20k.

Note that taxes are progressive, so from a $70k wage you get about $10k "free cash" to spend, whilst a $100k wage gives you the above number of about $20k.

So it takes A little over 2.5 years' worth of average full-time wages to buy a car in the US.

Therefore I disagree, the problem is the average cost of a new car, expressed in labor (2.5 years average full-time labor), much more than the stratification of US society.

I would argue 6 months full-time labor would be quite expensive for a car, and for the value of a car to be that, you'd need to make $170k per year, you'd have to be in the top 10%. Only at a 5% income do the cars this article talks about become reasonably priced. And I do mean reasonably priced. Not cheap.

Second problem is if you look at where the problem is, profit ("capitalism") ... is not the problem. GM makes $2,150 per car, the average car manufacturer half that, according to Google. Whilst this amount would move the needle a bit, it would certainly not solve the problem. That would make cars affordable for the top 11% of the population (and that's taking the GM figures), which would be just the tiniest of improvement.

According to this article:

https://carfromjapan.com/article/industry-knowledge/how-much...

Only raw material cost, labor and (barely) tax would make a decent dent (at least 10%) in the cost of a car.

Note: numbers all just Googled and taken at face value, maybe converting to per year (from per month) but no more processing. Obviously big mistakes could have happened, although I think not. I could do better but back of the envelope this should be about correct.