The failing of Ford offers history lessons for the housing crisis
Whenever talk turns to the housing crisis, someone is bound to proclaim that millions of new prefabricated houses are the answer. 'Just like car production, old chap.' And, of course, you can compare car, or better still van, production with house building. Four Ford Transits joined together might make a decent starter home and there can be no argument about its feasibility.
Fifty years ago the Bristol Aircraft Company was turning out modular aluminium dwellings at a rate of one every 10 minutes. If they could do it then, we can do it now. And if we still can't do it now, the reason can only be because we have erected barriers to prevent ourselves doing it. Barriers like the artificial scarcity of land created by the planning system; the untaxed owner-speculation that diverts resources; and, most of all, the absence of a charismatic figure like Henry Ford, founder and first president of the Ford Motor Company.
Ford was a man who could have solved the housing problem - he had already solved the motor-car problem. At the beginning of the last century motor cars were as scarce and expensive as houses are today, or at least they were until Ford created the world's first modern mass-produced motor car, the Model T Ford. From the outset he intended to keep this vehicle in production until he had motorised the whole world but, in the event, production of the Model T Ford ceased after only 14 years.
During those years, 15 million Model Ts were made in factories on production lines altogether capable of turning out a car every 10 seconds. This performance enabled the Ford Motor Company to take 57 per cent of the entire United States car market in 10 years and then to venture into overseas markets - but even that was not enough. Ford's marketing method was simple and universal: a completely standardised product - 'Any colour you like as long as it's black' - and a no-nonsense slogan: 'It gets you there and it brings you back.' There were to be no face-lifts or performance models, but there were regular price reductions designed to increase Model T ownership among first-time car buyers.
This bargain-basement strategy worked brilliantly in the early years, when demand for motor cars was still indiscriminate, but it failed dismally when General Motors' low-cost Chevrolet division opened a styling studio (eventually destined to employ 1,400 designers), and fitted its cars with such luxuries as electric starters and hydraulic brakes. By 1927, the last year of Model T production, sales of the car had fallen so far that Ford was compelled to close down the factory while a new car, the Ford Model A, was designed from the ground up according to less Spartan principles.
The lesson of the Model T can be summed up in two words: market saturation, of which the Ford Model T was an early casualty. This condition arises when demand for any particular good or service is satisfied but production continues unabated. When this happens alternative marketing strategies are required: price cuts, technical improvement of the product or service, increased advertising, or other inducements.
It was here that Ford failed. He had the means to hand to build a car for every man, but he had no idea how to sell a car to any man who had one already. That was the new task that, for the first time in history, devolved upon the technicians, designers, stylists and even architects of the late 1920s - and that was where the production of cars parted company with the production of houses. Instead of housing the world, we taught it to drive.