The Curious Tale Of Fordlandia: How Ford (NYSE:F) Built A Small American Town In The Amazon Rain Forest And What its Demise Tells Us About The Crumbling City Of Detroit

on October 04 2013 6:01 PM
Fordlandia
Fordlandia - circa 2005 Meduse

A dog wanders aimlessly past what appears to be an abandoned American house plopped down in the middle of the Brazilian rain forest.

Sunlight streams through the trees, bouncing off the house’s red-tiled roof. Nearby, a disused water tower rises above forgotten sheds crowded with the rusting machinery of years gone by.

In photos, it is a curious scene. Where, you wonder, is this? The place looks familiar yet … something's off. Even the name of the place evokes inexplicable possibilities: Fordlandia.

Three-and-a-half thousand miles away, the crumbling area known as downtown Detroit bears many of the same industrial scars. The city, whose spectacular descent into bankruptcy made headlines recently, predates the creation of the Amazonian town, yet the history of both are intertwined: Both places are rooted in an expanding 20th-century automotive empire, and both are now reduced to grand and telling relics.   

Of the two, only Detroit is familiar to most people. Its decadent architecture, much of it tied to the automotive industry, dominates a new photography genre that takes modern urban architectural ruins as its subject. As historian Josef Goodman observed, the center of the U.S. automotive manufacturing industry “looks like the place had been totally bombed.”

Goodman, who visited Detroit to conduct academic research on post-industrial development, was intrigued by its combination of historical energy and contemporary decay. He noted that the city’s abandoned automotive factories are popular destinations for a subculture of people looking for all sorts of things: Metal to scavenge, safe havens in which to do drugs, odd mementos of the past to collect, virgin territory for artists and hipsters in which to live, and, in Goodman's case, a window though which to view the rise and fall of an empire.

Goodman studies places like Detroit to understand how industrial regions collapse. What makes Detroit’s collapse surprising is that, for many decades, it was one of the most important industrial centers on Earth. And while the ruins there and in Fordlandia are the remnants of today’s global economy, they offer clues about how big business decisions ultimately play out.   

The engine of the 20th century economy

Few technologies in American history have shaped people’s lives so profoundly as the automobile. Cars shape the world, affecting everything from the condition of our environment to where we live, how we work and how we approach economic models and new schools of political thought, including even social change.

Ford Model T More than 1,000 Ford Model T enthusiasts descended on Richmond, Indiana on July 21, 2008 to take part in a week-long Ford Model T 100 year anniversary celebration. It is the largest gathering of Ford Model Ts since the cars began rolling out of Ford's Piquette Avenue Plant in Detroit, Michigan in 1908. Picture taken on July 21, 2008.  REUTERS/Sam VarnHagen/Ford Motor Co./Handout (UNITED STATES).

Invented in the Germany in 1886 and perfected in Detroit, the automobile enabled the U.S. to become one of the wealthiest, most powerful and farthest-reaching empires in history. At the center of that phenomenon was one man: Henry Ford.

Ford’s workers streamed into Michigan to take part in the automobile revolution in the early years of the 20th century. From 1913 to 1927, the Ford Model T was the world’s most popular car, and to underscore his dominance, Ford himself watched as the 15-millionth vehicle rolled  off the production line at his Highland Park plant on May 26, 1927.

Long before that day, Ford had revolutionized the workplace, introducing the assembly line technique of mass production, which subsequently influenced almost every workplace in the world, for better or for worse. His production lines were replicated across the globe, and the $5-per-day salary that he gave his employees in the early 20th century enabled a new era of consumerism. Ford single handedly reinvented America’s middle class and ushered the nation into the industrial age, yet he was aghast at the social changes that followed the urbanization he helped create. Unbeknownst to him, he had laid the foundations for the grand-scale capitalism that would later destroy his vision of America, and in a desperate attempt to recapture a world that was slipping away from him, he created Fordlandia as his boldest project ever.

Fordlandia

Fordlandia Near the waterfront in Fordlandia, Brazil, circa 2005.  Meduse

Detroit skyline showing the GM building General Motors Corp. world headquarters is seen from an old, mostly abandoned warehouse district in Detroit, Michigan, on March 31, 2009.  REUTERS/Rebecca Cook

In 1928, Ford began construction on a large-scale settlement that included a rubber plantation and a manufacturing center located in the heart of the Amazon Basin. The 5,000-square-mile area that he bought from the Brazilian government was meant to function as end-run around Britain's monopoly of the rubber industry. This was important to Ford because, by the early 1900s, America consumed about 70 percent of the world’s rubber, with most of it funneled through Detroit or used for products made there, and the efficiency-minded Ford wanted to cut out the middle man.

His idea for Fordlandia had as much to do with breaking Britain's monopoly on rubber as it did extending Ford’s philosophy of American utopianism, which was replete with white picket fences; neat rows of gabled houses built side by side along straight, orderly roads; swimming pools for grateful, healthy workers; and other infrastructure associated with Ford’s image of the best of the old and new in the U.S. In some ways, Fordlandia was his attempt at creating a nostalgic view of an America riding the crest of a global industrial empire.

Ford sent ships up the Amazon filled with building supplies, corporate managers, food and whatever else would be needed to support his colony, although the actual laborers were hired locally. Within a year, Fordlandia had sprung up from the dense and dangerous Amazon, and it appeared that Ford had conquered a new frontier, taming the jungle with American design. From seemingly nowhere, clapboard homes emerged along paved roads, their residents benefiting from their own hospital, school, cafeteria (which served American-style food), factory buildings, electric street lamps, concrete sidewalks and red fire hydrants.

That vision -- and its ultimate demise -- prompted author Greg Grandin to write an eponymous book about Fordlandia that made the short list for the 2009 Pulitzer Prize. The jungle, Grandin wrote, in the context of Fordlandia, was less as an ecological system than a “metaphysical testing ground." It represented “a place that seduces man to impose his will, only to expose that will as impotent. Nineteenth and early 20th-century explorers and missionaries often portrayed the jungle either as evil inherent or as revealing the evil that men carry inside.”

Fordlandia was everything Ford wanted, yet as a source of happiness to him, it was short-lived. The local Brazilian workers were not used to the kind of rigid work schedules and routines that were foisted upon them there, and alcohol, women and tobacco were banned in the prefabricated town, which greatly angered the indigenous men who worked there to the point where they simply left the colony to find diversion in other towns. Unfortunately for Ford, many who left never came back.

The workers were required to arrive on time, work through the hottest part of the day and live in American-style houses that had not been designed for the heat and humidity of the Amazon. Ford engineers used tin roofs with asbestos lining that they believed would deflect the sun’s rays -- a miscalculation, as the roofs merely held the heat in. Turnover among employees was high. Traditionally, Amazonians worked only when they needed to, preferring to go back to their settlements and families as soon as they had money. Because Ford had paid his Detroit workers high salaries to enable them to buy his products and put their income back into the economy, it seemed logical to do the same in Brazil. The problem he encountered in the Amazon was that there wasn’t much to buy (at least, not much that was on the approved list), so consumerism was not viewed as a worthy goal. Ford needed rubber, and he was intrigued by grandiose ideas about industrial utopia, but as it turned out “Fordism” -- the mass-production system designed to deliver uniform, low-cost goods and offer workers decent wages to buy them -- and the rainforest were not made for each other.

In its first years of existence, Fordlandia saw riots, walkouts and army interventions. What it did not see was any rubber manufactured there. Ford had blithely decided not to send botanists to the jungle with his construction teams, expecting white-collar managers to hire locals to take care of agricultural production. Like Ford’s workers in his Detroit factories, the trees were placed side by side in close proximity to each other, mirroring his philosophy on the production line. But as they grew, the tops of the trees touched each other, allowing South American tree blight to take hold and predators such as sauva ants, lace bugs, leaf caterpillars and red spiders to thrive. As a result, tree after tree succumbed.  

In natural environments, rubber trees grow far apart from one another -- an evolutionary trait that prevented infestations and blight. The British rubber plantations in Malaya had no such problems because they did not have to deal with the same predators or fungi that were so abundant in the Amazon. By 1936, when the first exports from Fordlandia were supposed to be on their way back to America, the plantations were in ruins.

Ford, who famously never visited the site, ordered the town abandoned and moved the operation downstream to the city of Belterra, in Brazil’s Para state, where better weather conditions existed for rubber tree growth. Yet by 1945, synthetic rubber had been invented by German scientists and was popularized by the B.F Goodrich Rubber Company in the U.S. Shortly thereafter, Ford’s investment in the Amazonian wilderness was over. His son sold the land back to the Brazilian government for a token sum of $250,000, though Ford had already invested $20 million (roughly $200 million in today’s money).

Ford’s -- and America’s -- industrial empire reached finally hit a minor, yet notable dead-end. Sixty-eight years later, Fordlandia is a cautionary tale about the reach of the technologies and economic models that had been proven elsewhere.  

“Large parts of the town are occupied, as I write in the book, by ordinary Brazilians,” Grandin told IBTimes. “Cows graze on what was rubber land and a saw mill is operating at breakneck speed.” Today, Grandin said, Fordlandia’s residents include some past Ford workers and their families, but otherwise, it is a typical, isolated jungle community.

In hindsight, Fordlandia was also a harbinger of things to come. As the Amazonian jungle slowly reclaimed the Ford property, the city of Detroit’s fortunes continued to rise -- right up to the point when its own technology and business model began to collapse in a similar fashion.

Motown

Detroit's broken windows Broken windows are seen inside the abandoned and decaying manufacturing plant of Packard Motor Car in Detroit, Michigan April 2, 2011. The city is a part of America's Midwestern "Rust Belt", the heartland of the country and home to big unionized manufacturers like the auto and steel industries. The plant, built in 1907 and designed by Albert Kahn, is located near downtown. Picture taken April 2, 2011.  REUTERS/Eric Thayer (UNITED STATES)

There are pockets of rejuvenation in downtown Detroit, but the dominant impression a visitor to the city gets today is of a post-apocalyptic wasteland of empty neighborhoods, crumbling factories and derelict cars. Many of the city’s formerly premier auto manufacturing plants resemble the war-torn streets of mid-’90s Bosnia. Residential areas haven’t fared much better, with tens of thousands of homes abandoned as the population fell to a third of its peak of 1.8 million, mirroring the decline and collapse of the automotive industry in the Midwest. Like Fordlandia, Detroit came to reflect a dated and ultimately misguided business model.

The Packard factory is one of the more famous of the city’s abandoned car plants, and it serves as perhaps is grandest example of its collapse. The 3.5-million-square-foot plant went out of business in the mid-’50s, after which entrepreneurs took it over, leasing out small parts of its space to trucking concerns, theater companies and other businesses. This continued until 1999, when the City those businesses because the buildings that housed them had become dangerously unstable. The factory has been abandoned ever since, except by feral dogs, cats, wild animals and homeless people.

“The Packard plant is just one of thousands and thousands of properties that has been abandoned,” Goodman observed. “It’s quite scary. The thing could collapse at any minute, and, of course, there are people in there lurking in the shadows.”

inside the Packard Factory A chair is seen inside the abandoned and decaying manufacturing plant of Packard Motor Car in Detroit, Michigan April 2, 2011. The city is a part of America's Midwestern "Rust Belt", the heartland of the country and home to big unionized manufacturers like the auto and steel industries. The plant, built in 1907 and designed by Albert Kahn, is located near downtown. Picture taken April 2, 2011.  REUTERS/Eric Thayer

Owing to suburban flight, while the wider Detroit metro area’s population is down by about 3.5 percent over the last decade, it's up by about a million since 1950. But the core city has lost more than 60 percent of its population. By comparison, Dallas had a roughly equal size population in the 1950s, but as people there began decamping for the suburbs, the city responded by annexing those areas to maintain a growing tax base. Residents of suburban Detroit fought annexation, as they had clearly chosen to abandon a city that in 1967 was gripped by deadly race riots, during which more than a thousand people were injured, 7,200 arrested and 43 killed. Detroit began to shrink and tax revenues spiraled downward, presenting more challenges to its troubled automotive sector.

Goodman compared Detroit to former industrial cities in Europe such as Leipzig, in what was formerly East-Germany, which was in industrial decline until it began benefiting from West German investment after the two countries were reunified in 1990. The comparison stops short when that  investment was funded by a national tax, “whereby everybody knew that they were going to be paying for the redevelopment of East Germany," Goodman said. It's clear that "places like Leipzig are constantly getting EU money now to help them redevelop,” Goodman added.

It’s unlikely that federal money will ever be used to bail out an American city, Goodman noted.

Detroit’s fall has many causes: Its declining auto industry (which can be attributed to overseas competition, comparatively inferior products and conflicts between unions and corporations); government inefficiency and corruption; decaying infrastructure; and widespread urban collapse. But the bottom line was that its business model -- that consumer-workers alone could support the city -- failed. The result was that Detroit has declared bankruptcy -- the first major American city to do so.

Ford, if he were alive today, might argue that bailing out Detroit would benefit the entire American economy. In a paradoxical way, his brand of industrial consumerism -- which failed in Fordlandia but bred the form of capitalism that's in place in the U.S. today -- might have saved Detroit, had the model been adapted to accommodate changing economic conditions. Instead, like Fordlandia, the city became an abandoned outpost of the global economy.

Fordism

Fordism has its roots in collective action, and Ford used it as a basis to regiment his factories, creating mass production and large output, which in turn allowed him to share his large profits in the form of better working conditions and higher salaries for his employees.

Inside Detroit Portrait of company founder Henry Ford hangs in the historic Piquette factory in Detroit, Michigan,  REUTERS/Gary Cameron

When Ford agreed to pay his workers double the average American salary, he did so because he wanted them to buy his products and as they simultaneously created valuable tax dollars for the local, state and federal governments. Saving Detroit would have created wealth in the long run because the city would have survived to produce more demand goods and services, and tax revenue. Instead, the city’s debtors will take huge losses, which means that many industries will suffer, as will many city and state governments and the economies associated with them. “Having spoken with urban planners, academics and journalists and economic development people,” Goodman said, “you’ve got to raze these properties to the ground; you’ve just got to level it, and then you have to think about ways redevelop the vacant lands.” 

Ford walked away from his Brazilian experiment, which, though it represented a financial disaster, was a blip on the company’s financial screen. The idea of rigidly adhering to proven business models even when they seemed to have outlived their usefulness proved to be a far greater threat.

The Ford Motor Company has overcome many of the challenges to its industries, including the downgrading of its corporate bonds to junk status, the erosion of its market share and the skyrocketing of its pension and healthcare costs due to an aging workforce. Yet the reality is that Henry Ford’s model of industry, consumers and government as interdependent and mutually beneficial no longer applies, as Detroit’s decline illustrates.

Grandin described Fortlandia in a way that might also apply to Detroit: As “a parable of a particular moment in the history of American capitalism, where a person like Henry Ford could imagine and try to put into place a more holistic vision, one which could sustain community and see profits deriving not from driving down wages but from expanding markets through the paying of high wages. It was a moment when capitalists, at least some of them, saw wages as a source of profit, not just a cost of production. Ford’s scheme was crazy, but compared to what has come after, it was quite benign. Fordlandia was a parable of hubris, but the hubris wasn’t that Ford thought he could impose the American way of life on others or that he could conquer the Amazon jungle -- it was that he truly believed he could tame capitalism.” 

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