Henry Ford's Blunder

0 Comments | Milwaukee Sentinel, Jan 12, 1995 | by ROBERT GREDE

Think about the president of your company for a moment.

Is he approachable? Would you be comfortable disagreeing with his decision?

If not, you may be among the most dreaded of all employees, the "Yes Man" (or "Yes Woman").

Typically, the larger your company, the further removed your leader becomes from day-to-day operations and the loftier his position seems. He evolves into a symbolic corporate figurehead almost godlike in his pronouncements and decisions.

He also becomes a prisoner of his own triumphs in a world where no one will disagree with him about anything. And that can hurt his business, whether he knows it or not.

My father tells me the story of just such a man Henry Ford II, grandson of the great Henry Ford, who invented the assembly line and founded Ford Motor Co.

In 1913, Henry Ford established a body assembly plant outside Iron Mountain, Mich., and named it Kingsford.

His purpose was to be near the Ford forests throughout the Upper Peninsula. Those forests supplied wood used for floorboards, door frames, and roof supports in Model T cars.

After World War I, wood was replaced with steel in the Model T.

But Ford engineers aiming to make use of their forests designed an upscale Model A that resembled a truck. They called it a "station wagon," but many people referred to as a "Woody" because of its fancy wood sides.

In 1946, Grede Foundries of Milwaukee built a gray-iron metal-forging facility directly across the street from Ford's Kingsford plant. It became Grede's Iron Mountain Division.

By 1953, the Woody had faded into history, and Ford used almost no wood in any of its vehicles. The decision was made to close Ford's Kingsford operation.

At the time, Ford's vast holdings dominated the countryside. The Kingsford operation consisted of 14 assembly buildings, a maintenance building, a charcoal plant, a steam generating plant, a chipper/sawmill building, an airfield, a waterworks, and a hydro power plant and dam.

Henry Ford II, then chief executive officer of Ford Motor Company, donated the airfield and water works to the City of Kingsford. The remainder of the property he listed for sale.

My grandfather, Arthur L. Grede, then executive vice president of Grede Foundries, and his brother, William J. Grede, then president of Grede Foundries, bought the Ford property.

My father, Ned Grede, worked as a salesman for Briggs & Stratton Corp. at the time. When his father invited him to attend the final purchase negotiations, he arranged to be in Kingsford on the appropriate date.

There, my father was introduced to Henry Ford II and also met the Kingsford plant manager and several other Ford executives. They included the plant's maintenance supervisor, with whom my father sat.

At one point during the final negotiations, Mr. Ford turned to the plant's maintenance supervisor and said, "I want to keep the plant on our regular maintenance schedule right up to the date of closing," which was scheduled for five months later.

Obviously taken by surprise, the supervisor gulped.

"Yes, sir, Mr. Ford," was all he said.

After the signing, the supervisor agreed to show my father the property. As they were walking, my father asked why he had seemed so distressed when Ford told him to keep up the maintenance schedule.

The supervisor told my father that he could understand maintaining the property and even replacing the roof on one of the buildings, which was scheduled for the following month.

But he said he was amazed that Mr. Ford wanted him to take delivery on a brand new diesel locomotive just five days before turning the plant over to its new owners. The new locomotive had been scheduled, as part of the maintenance schedule, to replace an engine being retired after 20 years of service. The locomotive manufacturer was Fairbanks Morse, of Beloit, and the cost was over $100,000 (in 1954 dollars).

My father was shocked. He asked why the maintenance supervisor hadn't mentioned the locomotive to Ford.

"Me contradict Mr. Ford?," he replied. "No, sir."

My father knew that Art and Bill Grede had no plans to use the railroad, which ran between the plant and the Ford forests. After my grandfather was informed of the locomotive, he made a deal with Fairbanks Morse to deliver the engine to another customer (Fairbanks Morse had a backlog of orders at the time).

Fairbanks Morse also found a buyer for the old locomotive that Ford had planned to retire.

Art and Bill Grede sold the Ford hydro plant to Wisconsin Michigan Power Co., retained 750 acres of land (more than a square mile), and leased out most of the buildings.

With the money they received from selling the two locomotives and the hydro plant, the Grede brothers were able to keep the charcoal plant operational.

It became known as the Kingsford Chemical Co., which began bagging charcoal briquettes for sale to an exploding population of suburbanites wanting fuel for their outdoor barbecues. (Kingsford was later purchased by the Clorox Co. in the early 1970s.)

There is a moral to this story.

Henry Ford II loomed so awesome to his employees that they were afraid to disagree with him, suggest alternatives or improvements, report bad news or even address him directly.