Henry Ford’s Most Decisive Defeat: Fordlândia

  Henry Ford in 1919 

 (July 30, 1863 – April 7, 1947)

Today, it’s hard to fathom that in early 20^th century America, a major cartel comprised of a few Dutch and English barons had a stranglehold on the vast majority of the world’s supply of rubber.  You see, for a time during that era the only source of rubber was the tree native to South America: ‘Hevea brasiliensis’, more commonly known as the ‘Rubber Tree’; whose sap is a natural latex source.

Several years prior, in the 1870’s, a group of entrepreneurial smugglers had secretly slipped seeds of the wild rubber tree from the Amazon rain forest in South America into East Asia, which was quite key to establishing sprawling rubber plantations in that region of the world; coincidentally, you might say, production and the need for latex sap was at it’s peak at just the right time. 

By the late 1920’s, the infamous automobile tycoon Henry Ford set out to break the back of the monopoly. His hundreds of thousands of new cars & trucks were in need of millions of tires; which were rather expensive to produce, especially when buying raw latex from the well established rubber lords of East Asia.

As a result, Ford established Fordlândia, a tiny piece of America which was transplanted to the Amazon rain forest of Brazil at great expense; with a single purpose in mind: To create the largest rubber plantation anywhere in the world.  The concept was immensely ambitious; however the project would ultimately be a fantastic failure.

The year was1929, Ford hired a native Brazilian named Villares to survey the Amazon region for a good location to host the massive undertaking.  Brazil seemed the perfect choice especially since rubber trees were native to the region; an added bonus was that the rubber harvest could be shipped to the tire factories in the US by land rather than by sea, so it’s obvious why Ford elected to follow the advice of Villares and purchased a 25,000 square kilometer (9,652.5 sq. miles) tract of land along the Amazon river.

A steamer arrived toting a barge laden with earth-moving equipment, a pile driver, several tractors & stump pullers; a small locomotive, ice-making machines, and likely the regions first prefabricated buildings. Workers soon began building a rubber processing plant as the surrounding area was cleared of the abundant vegetation.

Numerous Ford employees were moved to the site, and within the first few months an ‘American-as-apple-pie’ municipality was up and running in an area that had only recently been a jungle wilderness. Improvements to the community included a power plant, an up-to-date hospital, a library, a golf course, a hotel, and row after row of white clapboard houses proudly displaying wicker furniture on the patio. As the town’s population grew, all manner of businesses were created; including tailors, shoe shops, bakeries, butcher shops, restaurants, and Model T Fords frequented the neatly paved streets.

Just beyond the residential area, long rows of freshly-planted saplings dotted the landscape. Unfortunately Ford chose not to employ botanists in establishing Fordlândia’s rubber tree fields; he chose instead to rely on the cleverness of several of the company engineers. . . That was major mistake #1, with no prior knowledge on how to grow rubber trees, the engineers made their best guess, and planted about two hundred trees per acre even though it was common knowledge that there were only about seven wild rubber trees per acre in the Amazon jungle.

Ford’s tiny slice of America in the jungle attracted a slew of local labors. Brazilian workers were paid a wage of thirty-seven cents a day to work in the ‘tree fields’; about double the normal rate for that line of work. But the effort to transplant ‘America’ to include what Ford called “the healthy lifestyle” comprised a bit more than just American styled buildings; it was also mandatory to practice  what Ford perceived to be an “American” lifestyle and values. The municipality’s cafeterias were self-serve (not the local custom), and they provided only American foods such as hamburgers & hotdogs. It was compulsory to live in American-style houses, and each worker was assigned a badge number which had to be display on their clothing for identification; the cost of the badge was deducted from the first paycheck. Brazilian workers were also required to attend “squeaky-clean” American festivities on weekends, such as square-dancing, English-language sing-alongs, and poetry readings.

One of the more unsettling cultural differences was Henry Ford’s own “mini-prohibition” program! Alcohol was strictly forbidden inside Fordlândia, even within the workers’ homes, on pain of immediate dismissal. Ford not only barred alcoholic beverages; prostitution, and even tobacco was prohibited within the town limits, however this major mistake was soon circumvented by the inhabitants of the community by simply paddling small craft out to merchant riverboats secured just beyond town limits and no doubt to Ford’s dismay, a whole new settlement was established about five miles upstream on the “Island of Innocence” that boasted bars, nightclubs and brothels thus allowing workers to exchange their generous pay for the comforts of rum and women.

While the community struggled along month-to-month with its disgruntled workforce, it was also faced with a “rubber tree seedling” dilemma. The tiny sprouts weren’t growing at all. It was soon determined that the hilly terrain lost most all of its topsoil during heavy rains, leaving infertile, rocky soil behind. The few trees that survived into young adolescence were soon stricken with a leaf disease or blight that gradually ate away the leaves leaving the trees stunted and pretty much useless. Ford’s untrained managers battled the fungus heroically, but they didn’t have the necessary knowledge required for favorable results, so you guested it, their efforts proved futile.

Discontent of the workers grew as the unproductive months passed. Brazilian workers –  accustomed to working afore sunrise and just after sunset to avoid the heat of the day– were forced to work proper “American” nine-to-five shifts beneath the hot Amazon sun; following Ford’s famous assembly-line philosophies. Adding insult to injury, malaria became a serious problem in large part because the hilly terrain had a tendency to pool water, providing the ideal conditions for a mosquito breeding ground.

One bright day in December of 1930, after about a year of working in an unforgiving environment with a strict and displeasing “healthy lifestyle”, worker agitation reached critical mass in the labors’ cafeteria. Having suffered one too many episodes of indigestion after consuming “American” food, a Brazilian man stood and shouted that he could no longer tolerate the conditions. A chorus of voices quickly followed his, and the disharmony was soon joined by an orchestra of banging cups and shattering dishes. Several members of Fordlândia’s American management team quickly fled either to their homes or into the woods, some chased by machete-packing workers. A few of the managers were able to scramble to the river docks to board the boats there, which they moved to the center of the river just beyond the reach of the escalating rioters.

When the Brazilian military arrived three days later, the protesters had expended most of their anger. Windows had been broken and a few trucks had been overturned, but Fordlândia had somehow survived. Work resumed shortly, though the rubber tree sapling situation had not changed.   In 1931, a British journalist writing for The Indian Rubber Journal visited and wrote: “In a long history of tropical agriculture, never has such a vast scheme been entered in such a lavish manner, and with so little to show for the money. Mr. Ford’s scheme is doomed to failure.”  The following months offered little proof to counter the journalist’s forbidding depiction of the operation.   

In 1933, after three years with no substantial quantity of rubber to show for the investment, Henry Ford finally decided it might be a good idea to hire a botanist to assess the situation. The botanist concluded that the land was simply not up to the task. The damp, hilly terrain was bad for the trees, but excellent for the blight. It was about this time that it was learned that no one had noticed that the land’s previous owner was a man named Villares; yep, the same man Mr. Ford had hired to choose the plantation’s site.

Never one to surrender after one effort, Ford purchased another tract of land fifty miles downstream from the ruins of Fordlândia, establishing the town of Belterra. The terrain was more level and less damp, making it much more suitable for the picky rubber trees. He also imported some grafts from the competition in East Asian, where the trees had been bred for resistance to the deadly leaf blight.  The new enterprise showed more promise than its predecessor, but progress was slow. For ten long years Ford’s workers labored to grow trees suitable for rubber production, yielding a peak output of 750 tons of latex in 1942 … far short of that year’s goal of 38,000 tons.

Ford’s persistence may have eventually paid off if it were not for the fact that scientists developed cost-effective synthetic rubber just as the Belterra plantation was near its peak.  By1945Mr.  Ford decided to quit the rubber production trade, having lost more than 20 Million Dollars in Brazil without ever having set foot on either site. Later that same year, Henry Ford’s grandson Henry Ford II sold both plantations to the Brazilian government for $250,000.00.

Henry Ford’s losses in Fordlândia and Belterra are equivalent to about 208 Million Dollars in in today’s (2013) dollars.  While it’s true that he was unable to buy his way into rubber royalty, and his efforts to force feed his idea of an American “healthy lifestyle” were met with anger and resentment ... history has repeatedly shown that obscene wealth gives one the privilege, some say the obligation, to make bizarre and astonishing mistakes on a grand scale. With that perspective foremost in mind, Fordlândia could not have been more successful.

Henry Ford will always be known as an American industrialist; founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production.  Ford did not invent the automobile, but he did develop and manufacture the first automobile that enabled middle class Americans the ability to buy his Model T automobiles which revolutionized transportation as well as America’s industry.  His contribution to the rubber industry in all likelihood will remain mute. 

Sources:

http://www.damninteresting.com/the-ruins-of-fordlandia/   http://en.wikipedia.org/wiki/Fordl%C3%A2ndia                                                                          http://en.wikipedia.org/wiki/Henry_Ford                                                                 http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=5000&year1=1945&year2=2013

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