Reflections on business past...

The first of them arrived at 3 a.m. By daybreak some 4,000 were huddled in the deep January freeze. By 7:30, 10,000 men had gathered at the entrance to the Highland Park, Mich., factory, hoping for a job at a wage that sounded too good to be true.

But it was true. The previous morning, Henry Ford had lingered near a window while his treasurer read a statement to reporters: “At one stroke, [Ford] will reduce the hours of labor from nine to eight” and offer its workers “five dollars per day”—more than twice the prevailing wage of $2.34.

The 1914 announcement hit America like a thunderclap. The Wall Street Journal accused Ford of “an economic blunder if not crimes.” But Ford’s motives were neither socialist nor utopian. Ever since his assembly lines had lurched into motion the year before, he simply could not keep workers. Turnover of 370% required hiring almost 50,000 people a year just to maintain a workforce of 14,000. Putting $5 in a worker’s pocket, Ford hoped, would do more than reward him for grueling and mind-numbing work.

Seems to me that this is a lesson which American businesses would be wise to relearn.

An interesting article on the Fortune website on the best and worst calls in business history.