The History of American Technology -- Fall 1998
	C&S (14), "The Assembly Line," pp. 220-222

I think the most important thing I can do to help you with this section is to underscore just two of the points that C&S make:

• First, take note of this: Henry Ford was making model T's for 5 years before adopting any moving assembly lines. He'd sold 32,000 in 1910, and by 1913 his Highland Park plant had the capacity to turn out 26,000 Model T's each month, that's over 300,000 each year--BEFORE the moving assembly line. Before the old methods of assembly ran their course, Model T's were being sold through more than 3,500 dealers and the Model T already accounted for 3/4 of the cars on American roads. That meant that over half the cars in the world were Model T's before Henry Ford introduced the moving assembly line.
• The second point is this: The assembly line lays its own nasty form of 'trap' to await the unwary. Even Henry Ford tripped up on it. The assembly line specialized machinery is very expensive, and subdividing the work so that each worker has only one task to perform means that you have to have employ thousands of workers to run an assembly line for a product like the Model T. The economics won't work until you produce in VERY LARGE volumes. Remember Ford replaced the old method with the assembly line after he already had developed capacity for 300,000 units a year. No country in the world other than the U.S. introduced moving assembly lines until the 1930s--no one had the volumes to justify it until the British did at that point. The cost of assembly lines was the major cause of the shakeout in the auto industry that reduced the American industry from hundreds of firms in the 1910 era, to dozens in the 1920s, just 8 in the 1930s, and only really 3 successful firms by the late 1950s--during the peak 'Golden Age' of the American automobile. As late as the 1950s, the Detroit rule of thumb was that an assembly line had to turn out a minimum production of 250,000 units each year to justify its cost.
  
  As C&S tell us, the investments in assembly lines produced a decided reluctance to engage in product innovation--it still works that way. The auto industry as it settled into assembly line production saw radical innovation disappear. GM's marketing strategy of annual model changes--introduced in the 1920s actually amounted to a series of annual modifications, primarily in styling. By the 1930s, the annual model change had produced a 7-year cycle of changes that were largely cosmetic--automakers couldn't afford to tear out the expensive assembly lines for retooling any more frequently.
  
  Henry Ford ran the T line as long as he could--until 1927, at which point he had produced just over 15 million while adding hundreds of millions of dollars to his personal fortune. But, by that time, Ford had dropped in market share from figures that had peaked in the 70% range to the area of 20%. By the time Henry Ford realized he couldn't get market share back, the company was losing money almost as fast as he had made it in earlier good times. Effectively, the Ford Motor Co went 'bankrupt' in the late 1920s, and it really didn't start earning money again on automobiles until after World War II. What saved the company was Henry Ford's willingness to pour money that he had earned from the Model T back into the operation. As Ford tried to compete on the basis of his full scale assembly lines in the 1930s, he simply wasn't making and selling enough cars to get the economies of scale needed for profitability. The same problem has afflicted GM since the early 1980s--dropping market share has meant very difficult times maintaining profitability on its huge investments in plant and equipment.
• The moral of the story? 1) Assembly lines aren't necessarily the way to make products 'cheaper'; it only really works when you can run at capacity; anything less and you start losing money very quickly. 2) The capital investment required and the specialized tooling make assembly lines prone to limit possibilities for product innovation. 3) The complexity of their development, tooling, and implementation make assembly lines very time consuming to set up--thus, assembly line production has difficulty in responding to change.
  
  Overall, the lesson is much like the one about interchangeable parts and the early armory practice--its much overrated in the collective American consciousness. Until the 1840s, armory practice couldn't produce what it promised even when focused on one design that was 160 years old--a product that was more expensive than handicraft, one that only the military would buy. With the assembly line, the technology tended to 'freeze' the product, which couldn't be produced at a profit unless you could sell the product as a commodity.

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