Young Henry's Plan

Young Henry Ford II, who proved himself a labor statesman in settling his own labor troubles, last week suggested a statesmanlike solution for the nation's. Before San Francisco's famed Commonwealth Club, where the late President Roosevelt first raised the oriflamme of the New Deal, the Ford Co.'s 28-year-old president went back to old principles. Said he:

"The problem of labor and management getting along together can only be solved by labor and management working hard at the problem together. . . . We do not think that Government can provide the solution, because the principal thing which Government can bring to bear on the problem is the legislative club. And you cannot coerce great numbers of Americans into doing something that they think is unfair and against their best interests. We have tried that in the past and it doesn't work. It merely makes more troubles. There is a big field for sound labor legislation, but it will not be written to coerce any group."

Yet, said Young Henry, labor is only a piece of the overall problems of production and inflation. Only by solving the problem of price ceilings and making enough of everything to meet the current overwhelming demand can inflation be licked. But making enough things right now is absurdly unprofitable because 1) material costs have soared and 2) labor productivity at Ford's has dropped 34% in four years. As proof, he gave the public more of a peek into Ford company books than it has ever had before.

"In 1941," said he, "the super deluxe Tudor [most popular Ford, which retailed at about $750 F.O.B.] represented a total manufacturing cost of $512. . . . Material costs were $304, direct labor costs were $76 and overhead amounted to $132. . . . Looking at the November, 1945 cost records [of this model], when production was comparatively low, we find that total manufacturing costs added up to $962 ... or 87% more than in 1941."

When allowances for sales and distribution, etc. were added, but with no allowance for profit, the manufacturing price reached $1041.26. Yet, he said, OPA set a wholesale price on the car of $728, a net loss to Ford of $313.26.

What was the solution? It did not lie merely in the hands of OPA (although he hoped that something would be done about ceiling prices). The real solution, said Young Henry, lay in the hands of everyone. It was time for the U.S. to roll up its sleeves, set aside all other considerations and "pitch in and work."

"We must use our greatest ingenuity and effort as manufacturers to manufacture in the face of very great obstacles . . . as labor leaders to meet the problem of a falling productivity rate among workers ... as Government officials and legislators to get us clear of unnecessary entanglements. . . . We must popularize the notion of work. A recent opinion poll shows that less than 45% of factory workers belonging to unions think they should turn out as much work as they are able . . . among non-union workers 60% think [so]. . . . If this represents the attitude of union men . . . then I think the union leaders have a big educational job. ... If only six men out of ten non-union men believe in doing their best, then I think we all have a job to do."

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