Ford History II: Young Henry

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In August 1943, when Lt. Henry Ford II, USNR, was released from active duty to help save Ford Motor Company after his father Edsel Ford had died unexpectedly, the company was in shambles.

The U.S. government was heavily dependent on war production from Ford plants — B-24 bombers, aircraft engines, gliders, trucks, tanks and tank destroyers, tank engines, armored cars, amphibians, and other components. And this output was threatened by the antiquated mismanagement of Young Henry’s 80-year-old grandfather Old Henry and his henchman, Harry Bennett.

To most outward appearances, the fleshy young scion of the family wasn’t bringing much to the table beyond his name. He had playboyed his way through prep school and college, dropping out to marry a New York socialite in his Yale senior year without graduating. To his credit, however, he had joined the Navy before Pearl Harbor.

And Young Henry was determined to right the wrongs done to his father by his tyrannical grandfather. He was also devoted to the family enterprise, Ford Motor Company.

Turnaround number one

It took him two years to figure out all the things wrong, and a plan to fix them. He carefully selected surviving managers who would be loyal to him and the family and not the feared Bennett. He listened to the wise counsel of his mother’s brother-in-law, banker Ernest Kanzler, a one-time Ford executive who founded Universal Credit Company, Ford’s early response to General Motors Acceptance Corporation (GMAC). Kanzler had long been banished from the company by Old Henry.

With the end of the World War II, progressive plans for post-war models were threatened by Old Henry’s senile desire to go back Model T days of one car and one engine. Young Henry, key ally and ex-FBI agent John Bugas, and the Ford women, Clara (Mrs. Henry) and Eleanor (Mrs. Edsel), succeeded in dethroning the old man. Henry II was named president in September 1945.

He immediately undertook hiring three groups of people who would, successively, help him lead the company for the rest of his 42-year tenure. They were: the first class of college graduate trainees, including Lee Iacocca; a team of ex-Army Air Corps statistical control officers and former college teachers later known as the Whiz Kids, and a group of General Motors executives headed by Ernest R. Breech.

Among the ten Whiz Kids, one became vice-chairman, Arjay Miller; one became president, Robert McNamara; one became executive vice president, J. Edward Lundy; another became group vice president, Jim Wright, and three others became vice presidents, Jack Reith, Ben Mills and Charles Bosworth.

The Breech GM group supplied most of the company’s top executives for the next ten to fifteen years, until the others were trained in the mysteries of the auto industry. Altogether, their selection and hiring marked a singular and lasting accomplishment of Young Henry.

The salvation of Ford Motor Company beginning in 1945 became one of the great business stories of the 20th Century. In terms of the organization, it encompassed installation of financial systems and controls, professionalization of engineering, installation of sophisticated personnel practices and management development, cleaning up graft-ridden purchasing, and modernization and expansion of manufacturing and assembly plants.

Postwar boom

On the product side that most interests TCC readers, the Young Henry-led Ford executives, carryover and new, crashed to bring out all-new post-war cars and trucks. Ford was first to return to civilian production just as it had been last to close it but, in line with most of the industry, 1946-47-48 models were slightly restyled 1942s. The powertrains and chassis were little changed from Old Henry’s 1932s, beetle-back body styling dated from 1938 and Ford had no automatic transmission in the works to counter competition.

Remarkably, starting almost from scratch in mid-1946, the company was able to bring out 1949 models beginning with two different-sized Lincolns plus Mercury in April and Ford in June, 1948. The Lincoln-Mercury cars were styled by Bob Gregorie while the very different Ford was a George Walker creation. Underneath the new skins was a totally new chassis that abandoned the former transverse-leaf spring arrangement, a favorite of Old Henry. Lincoln dumped its troublesome V-12 in favor of a new flathead V-8 (lamentably about the time Cadillac and Olds were introducing modern OHV high-compression V-8s) while Ford and Mercury maintained their pre-war flathead V-8s. That this widely accepted transformation, said to have saved the company, could be accomplished in less than 24 months is truly incredible.

In addition, in 1948 Ford also brought out its first F-1 pickup, a new cab on a pre-war chassis, which company promoters now claim to be the origin of the present world-best-seller F-Series. (Note: my co-author, truck historian Jim Wagner, feels the F-100 of 1953 is the more legitimate forbear.)

In the meantime, the old man finally passed away in 1947, seemingly unaware of the accomplishments of his oldest grandson. Even earlier, Young Henry’s reputation as an industry statesman and executive friendly to labor was being established.

With the company in the good hands of its largely professional managers, Henry II was able to accept an appointment from President Eisenhower as a United Nations delegate at the same time plans were underfoot to offer Ford common stock to the public, accomplished in 1956. Ford had wrested industry second place back from Chrysler in 1950 and was positioning itself to challenge General Motors on a division-to-division basis.

Fiasco, then fame

This resulted in the Edsel fiasco, an embarrassment to the family if for no other reason than its name. But Ford Motor recouped with the successful introduction of other market-creating cars and trucks in the 1957-67 decade. Think retractable hardtop, Ranchero, heavy-duty truck, four-place Thunderbird, segment-leading Falcon and Comet compacts, Fairlane and Meteor intermediates, Econoline and of course Mustang and Cougar. Although highly prized by collectors today, the mid-Fifties two-place ’Bird and the Continental Mark II were hardly great sales successes.

Overseas, Ford rebuilt its British and German companies into a merged Ford of Europe, discarded the French investment, struggled lastingly against GM’s Holden in Australia, all the time coping with foreign laws which virtually excluded American vehicles from the largest markets.

All this took place on Young Henry’s watch. Unfortunately, his personal life began to dissemble in the Sixties as he divorced and joined the Jet Set.

In 1960, Breech had retired from Ford and Henry II replaced him as chairman of the board. A succession of presidents followed, and it became apparent that The Deuce, as he was now called — but never to his face — had inherited one of his grandfather’s most feared and hated characteristics: removing top executives seemingly by whim. McNamara bailed out for the Kennedy Administration after only a few weeks on the job — no reflection on Henry as far as it’s known.

A few years later, though, he bumped Arjay Miller up to vice-chair and hired Bunkie Knudsen from GM as president. In little more than a year, he then dismissed Knudsen, creating a temporary organization with three presidents.

From the time he took the company reins, he had never allowed his younger brothers Benson and William Clay a long-lasting shared leadership and, especially after suffering an angina attack in the mid-Seventies, Henry II began to stew about an ultimate successor.

Iacocca comes in

Finally he settled on Iacocca, but apparently never quite trusted him. In 1978, shortly before he planned to retire from active management, Henry fired Iacocca and elevated Phil Caldwell to chairman and Don Petersen to president.

Henry II, interested in affairs outside the company from his formative years, was deeply shocked by the Detroit race riots of 1967 and 1968. One result was his plan to reinvigorate the city’s riverfront with the Renaissance Center development (now occupied by GM) and the other was a close relationship built up with the new African-American mayor of Detroit, a one-time radical UAW official.

But on the business side, due to the gasoline availability scare of 1979, the industry and Ford went into a two-year tailspin — the one where Chrysler had to beg a Federal loan guarantee to survive — and Caldwell and Petersen had to struggle along with Henry looking over their shoulders. Nevertheless, because of him or despite him, Ford Motor managed to bring out its jellybean styled cars, which overtook GM for design leadership. Ford trucks also overtook first Chevrolet and then Chevy and GMC combined for sales leadership.

Probably Henry II’s most lasting contribution to Ford Motor Company products was his steadfast conviction in the Panther program of 1978 introduction, still the basis for today’s Ford Crown Vic, Mercury Grand Marquis, and Lincoln Town Car, one of the longest-lasting — perhaps THE longest-lasting — platforms in the worldwide industry. He always had an unerring seat-of-the-pants feel for what the market and the public demanded, an instinct for which he was little known outside the company.

Henry Ford II died September 29, 1987, having witnessed the second renaissance of his beloved company. And two possible family heirs to run the company, his son Edsel Ford II and nephew William Clay Ford Jr., were progressing along the management development ladder.

His was certainly a colorful career, easily matching that of his grandfather, but with far more wide-ranging successes and, on the whole, far fewer distractions.

But what of the next generation in the family-and-corporate dynasty? The conclusion next week.

Some material in this account is adapted from “Ford Dynasty: A Photographic History,” Arcadia Books, 2002, by Michael W. R. Davis and James K. Wagner

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