Detroit, USA, January 1914. Henry Ford raised wages of workers from $2.40 for a nine-hour day to $5 for an eight-hour day as he began assembly line production of the Model T. The press suggested that he was crazy, but it was a shrewd move. Ford had taken more than 85 percent of the labor out of a car, so he could well afford to double wages. He had already dropped the price of the car dramatically. Now he drove up wages and shortened work hours to help create a middle class with the time and money to buy automobiles.
It used to take more than 12 hours to assemble an automobile; now it took about 90 minutes. What happened to all of the time? Ford managers applied the ideas of efficiency expert Frederick Winslow Taylor as they designed the production line jobs. Taylor believed that most fixed wage workers spent their time trying to figure out how to work slowly, since being efficient brought no extra pay and could threaten jobs. His approach was to divide the assembly line work into very small steps, and time the workers to uncover the "one best way" to do each step.
Work on the assembly line was boring, repetitive, and tightly controlled. The workers were shown exactly how to do their job and told how much time they had to complete it. They could be trained in ten minutes, and they could be replaced in ten minutes. Like the interchangeable parts of a century earlier, interchangeable workers were at the center of a new industrial model: mass production.
High wages were supposed to make up for the lack of variety and autonomy, and for a while they did. And for a while, things went very well for Ford. Sales soared, and Ford owned the market. But after a while the Model T grew old and an increasingly prosperous middle class wanted to trade in their old cars for more stylish sedans. Ford was slow to respond, because his production system was most efficient when making only one kind of car. Meanwhile at General Motors, Alfred P. Sloan had created an organization structured to produce multiple models aimed at segmented markets. As the demand for variety and complexity grew, Ford's production system grew unwieldy.
Also as time passed workers began to feel trapped in untenable working conditions. They had become accustomed to a high standard of living and were unable to find comparable salaries elsewhere. The widespread labor unrest in the United States in the 1930s is often attributed to a system which held little respect for workers and regarded them as interchangeable.