newmercman:
[…]
It (Fordism) was a good idea at the time, but it would only work for a couple of generations, by then the business would expand to it’s natural capacity and breeding by previous generations would mean there were now too many people for the factories to support to the point that they could all own a Ford. At this point, Fordism was finished. It wasn’t an act of philanthropy, it was a genius business strategy from Henry Ford and it put his company on the map.
A pretty good summary of the situation (the part I’ve snipped).
I’ll only say about Fordism (and this is primarily Carryfast’s pet business philosophy, not mine) that increased populations do not impair the general Fordist employment model, because all things being equal with more people come more car consumers.
The reason the American domestic car industry lost ground is partly because other countries became industrialised and competitive with the US (eroding the US’s privileged export position), another is that the American working class in general stopped getting pay rises from 1970 onwards (thus eroding their domestic market for new cars), a third is that car production actually involves less labour nowadays and the cars themselves are more durable and replaced less often (and labour unions have not generally succeeded in reducing working hours to maintain employment levels and enlarge the market for leisure-time consumption).
Another thing worth mentioning is that the car industry in those days was vertically integrated, and the car companies practically ran mini-economies, with all important operations under common ownership and coordination, transforming ores and basic raw materials into finished product in a small geographic area, so industrialists like Ford could essentially set what today would be called “macro-economic policy”. A power that no industrialist has today like they did in early 20th century America.
Nowadays, transport infrastructure has improved (making companies less geographically concentrated) and vertical integration is out of vogue, and economic complexity has increased massively, and so even if a “car company” had a policy of high wages for the car assemblers, it would not have the same economic effect. Those powers now almost exclusively belong to central bankers and politicians - states, in other words.