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by hadlock
449 days ago
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I don't think he did it out of the goodness of his heart, the calculus just happened to work out in favor of the worker in this singular case. With large factories you have training costs, retention costs etc. Paying higher than the going rate meant you had higher quality workers because you could select the best ones from a larger pool. This caused manufacturing defects to go down and remanufacturing costs (extremely expensive) to shrink. Paying more for better workers reduced costs. Limiting hours worked per week reduced costs as well as those workers made fewer mistakes reducing remanufacturing/rework costs. Stable employment, good wages and short(ish) work weeks resulted in worker retention going way way up which meant less churn, less training expenses etc. TL;DR Henry Ford realized car manufacturing was a semi-skilled job, not an unskilled job, and hired and paid for it accordingly, quality went up and costs went down. It's not rocket science. |
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It wasn't a singular case.
He was principled enough about it that Dodge sued to compel him to put shareholders' interests ahead of employees and customers-- a suit Ford fought against, and lost.