Pictured above: Current view of Henry Ford’s original Highland Park assembly plant where the $5.00 wage was introduced, and was once home to an estimated 50,000 employees. The Ford Motor Company Highland Park plant opened in 1910. It was the first factory to use a moving assembly line, producing 9000 Model Ts per day by 1925. Credit: iStock.com/TennesseePhotographer
Only about 8 percent of U.S. workers are employed in manufacturing jobs today (2018). In 1960, that figure was 24 percent, and at the height of the Industrial Revolution it is believed that, in large parts of the country, the number exceeded 50 percent.
According to CNN Money, the United States lost 5 million manufacturing jobs in the first 16 years of the 21st century. The industrial age may thus be thought to be coming to an end in some countries, including the United States. Yet worldwide, manufacturing is at an all-time high. In the first decade of the century, the International Labor Organization reported the percentage of the global workforce in industrial jobs had reached 30 percent. By 2015, 40 percent of the Chinese workforce was in industrial jobs.
The reasons why manufacturing jobs have left the United States and gone abroad are well documented. An excellent review of the historical causes can be found in Behemoth, Joshua Freeman’s 2018 history of the factory and its role in making our modern world. The exceptional size of many factories played a role. The Ford River Rouge peaked at more than 102,800 workers in 1929. Such large-employee factories represent “industrial giantism” and are termed “behemoths” by labor historian Freeman.
Ford, beginning with the Model T and continuing with its Model A, exercised total control over design, manufacture, and sales of its cars. Its Highland Park plant employed the first continuously moving assembly line. River Rouge served as its feeder plant. The Rouge foundry alone employed 10,000 workers (all male) to cast engine blocks. It also had a blast furnace, coke ovens, open-hearth furnaces, rolling mills, glass factory, rubber/tire plant, leather plant, paper mill, box factory, and textile mill—covering a total of 1,096 acres in all. Ford also purchased coal mines and iron mines, and forest land (where it had sawmills and factories for the manufacture of the Model T’s wood parts).
Ford was clearly a pioneer, but was not alone in the establishment of mass production. By 1919, there were more than 1,000 plants in the United States that employed over 1,000 workers each. General Electric had 15,000 at Schenectady, N.Y., and 11,000 at Lynn, Mass.
Long hours, crowded living conditions, and domineering management resulted in factory worker discontent and the consequent union movement, with its costly and sometimes militant strikes.
In the machine-paced production assembly lines designed to speed up output, workers were often placed elbow-to-elbow, especially in automotive plants. In Detroit, the Ford labor force consisted largely of unskilled immigrants. Absenteeism and turnover were both high. And worker strikes could be costly in both lost output and in meeting the employee demands.
Incentives grew for manufacturers to disperse production to parts of the country where labor costs were lower and unionism not as dominant. Some companies refused to expand employment at plants where strikes had taken place.
In 1936, a month-long strike at RCA’s 2-million-square-foot complex in Camden, N.J., led to the unionization of its 9,700 workers. RCA responded by moving the Camden operations (including the manufacture of radios, vacuum tubes and other electronic components, as well as cabinets and records) to six new locations in Indiana, Pennsylvania, Virginia, and California. By 1953, only 300 consumer electronics jobs remained in Camden.
At the General Electric Schenectady location, the workforce dropped from 40,000 during World War II to 20,000 in 1954 and 8,500 in 1965, with the transfer of work to plants elsewhere in New York and five other states. Locations attracting the transfers, aside from featuring the absence of militant labor, might also offer tax breaks and labor-training programs. More efficient and less costly transportation of parts and subassemblies over longer distances than was once the case proved another inducement for smaller, remotely located factories.
The Failure of Vertical Integration
Vertical integration of manufacturing, epitomized by Ford in its ownership and control of all parts manufacture and assembly operations, as well as much of the raw materials, has not survived the test of time. Its serious shortcomings were evident with the end of Model T production in 1927. The uselessness of machinery dedicated to making a single part when transitioning to a new model (the Model A in this case) became obvious. Ford ceased production for six months and laid off some 60,000 workers. It had to replace 15,000 machine tools and rebuild 25,000 others.
Ford’s intense vertical integration thus resulted in several years of loss while its new competitors (e.g., General Motors) turned a profit. General Motors had responded to the vulnerability of its own integrated production system when a strike at its Ohio transmission factory caused the shutdown of all its North American Chevrolet plants. It began building plants in locations having smaller or less militant worker populations. And, unlike Ford, it adopted a policy of using outside suppliers for many of the parts of its vehicles.
Fast Forward to the 21st Century
Corporations today, particularly those in the United States, have determined to avoid many of the problems experienced during the early history of manufacturing. They seek to minimize the number of workers they employ by outsourcing as much as possible, and to do so to areas of low-wage workers. Thus the design, manufacture, and marketing of products that traditionally took place in a single company known as “the manufacturer” has been replaced by product “suppliers” who still design and market, but who outsource all or most manufacture. Among the companies who have elected to work with contract manufacturers outside the United States are IBM, Hewlett-Packard, Texas Instruments, Cisco, Ericsson, and Apple.
Apple once manufactured its own products, but in the 1990s began contracting out production. By 2016, it made only one product in-house. By working with huge contract manufacturers like Foxconn, Apple can quickly obtain the inventory it needs to respond to a new product introduction. CEO Steve Jobs described inventory as “fundamentally evil” and minimized it by promoting just-in-time production.
The control of product quality was traditionally the sole responsibility of the seller—when the seller and manufacturer were one and the same. Now it is more difficult. The seller’s headquarters may be in the United States while the contract manufacturer is in China. Evaluation of operational quality and life expectancy may be left to the ultimate customer.
When normal trade relations between the United States and China was re-established, U.S. companies accelerated the transfer of manufacturing operations to China. This trend was so rapid that the population of Shenzhan (known as “Foxconn City”) exploded from about 320,000 in 1980 to over 7,000,000 in 2000, the rise consisting largely of Chinese peasants hired to work under oppressive conditions at low wages, and live in company dormitories. The proximity of the dormitories to a factory made it easier to demand shifts of 12 hours or more. Foxconn’s dormitory rooms typically house from 6 to 12 workers each.
In 2010, eighteen workers at Foxconn factories in China attempted suicide, all but one by jumping off a company building. Fourteen were successful. The company reacted by securing the balconies and windows, and placing netting around all factory and dormitory buildings to catch any jumpers who managed to unlatch the newly installed locks. None of Foxconn’s major clients, including Apple, Hewlett-Packard, and Dell, discontinued using its manufacturing services.
There seems little doubt that the factory will continue to spread in numbers and global locations. And so will the challenges of controlling the quality of its output and the treatment of its workers. While the engineering profession played (and still plays) a dominant role in the industrial revolution, largely unanswered is whether it could have eased the pain the factory inflicted (and still inflicts) on its workers.
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Donald Christiansen is the former editor and publisher of IEEE Spectrum and an independent publishing consultant. He is a Fellow of the IEEE. He can be reached at firstname.lastname@example.org.