Rise and fall of Ford's sales network architect: Prison, success, bankruptcy
Norval Hawkins: Ford's sales master
But although Henry Ford was an engineering genius, he was no salesman. His company's earliest sales achievements can be traced to one car, the Model T, and to two men - one of them, Norval Hawkins, a convicted embezzler.
Treasurer James Couzens was Ford Motor's business brain from its founding in 1903, says Robert Casey, transportation curator at the Henry Ford Museum in Dearborn, Mich. Couzens hit the streets and asked people who they thought would make good auto dealers, Casey says.
Couzens sought go-getters "who would not just wait for customers to come in but would try to seek out customers and advertise," he adds.
From the big house
In 1907, Ford hired an experienced public accountant, Hawkins, as an auditor. Hawkins quickly rose to become the company's commercial and general sales manager.
In his 1920 book of sales advice, Certain Success, Hawkins wrote that before he joined Ford Motor, he had been an "organizer" of many large concerns, including 28 auto companies.
Hawkins failed to mention that he had served a short prison term for "defalcation of funds" when he came to Henry Ford's attention.
"It was said of Mr. Hawkins that Henry Ford, learning of his ability to sell things and to cut costs, used some influence in getting him out of the penitentiary to have him sell cars," the New York Herald Tribune wrote in Hawkins' obituary.
Hawkins landed in prison after he had embezzled $8,000 from Standard Oil Co., which employed him as an auditor, says David Lewis, a professor of business history at the University of Michigan. Henry Ford hired Hawkins, Lewis says, because he believed that any man could be rehabilitated.
Despite his criminal history, Hawkins' success in building Ford's dealership network is undeniable.
"He was the guy who said we have to estimate sales ahead of time to be able to establish our production schedules," says Ford Motor historian Robert Kreipke.
Under Couzens and Hawkins, Ford Motor set up branch offices in major North American cities, in part to minimize shipping costs. Eventually the company created 32 branches in the United States and Canada.
"These were, in effect, company stores," Lewis told Automotive News. "Generally they were rather ornate and upscale. After all, they projected the image of the company."
Besides selling cars, the branch offices oversaw Ford dealerships in their territories.
By 1913, Ford had nearly 7,000 dealers. "They were chosen with care: men financially reliable, of good standing in the community, occupying presentable homes," historian Allan Nevins wrote in Ford: The Times, The Man, The Company.
Hawkins wrote that during his dozen years at Ford Motor, the company evolved from "a few hundred scattered, unorganized, uncontrolled and nondirected dealers" into a network of nearly 11,000 sellers. Ford's annual sales jumped from 14,877 vehicles in 1907 to 946,155 in 1919.
Ford Motor began to pull away from its many competitors with the debut of the original Model A in 1903. Its business took off when the Model T was launched five years later.
"By the time the Model T was introduced, people really wanted a Ford dealership," Lewis says. Prominent business executives, politicians and rich young men all saw a Ford store as "a chance to make some money without any manual labor," he says.
During the Model T's heyday, Ford Motor owned half the U.S. car market.
Pressure on dealers
As the U.S. economy slid into recession just after World War I, Henry Ford started to lean on his dealers, largely because he owed money to New York bankers.
"They were licking their chops, hoping he couldn't pay them and they could take over Ford Motor Company," Lewis says.
So Henry Ford started dumping cars on dealers, the Henry Ford Museum's Casey says. "He would just box 'em up, send 'em and say, if you don't pay for them, we're going to take your franchise away," Casey says.
Ford "was able to pay his notes by foisting his financing essentially off on the dealers," Casey says. "Having a Ford dealership in 1920 was really lucrative. You didn't want to lose it. You would try your best to come up with the money and sell those cars."
Ford Motor continued to lead the industry in the 1920s. But by 1930, Ford's dominance started to wane as the low-end market created by the Model T became saturated. Ford fell behind in technologies such as hydraulic brakes. General Motors and Chrysler Corp. ascended.
"Being a Ford dealer then had gone from almost this license to print money to being kind of tough," Casey says. "You had to explain to your customer why mechanical brakes were better than hydraulic brakes - which was a hard thing to do because they're not."
The system of branch offices staffed by Ford employees that had proved so successful in the Hawkins years fell out of favor once Model T sales declined. Ford Motor decided it needed more aggressive salespeople.
And Hawkins? After he left Ford Motor in 1919, he joined GM for two years as a sales, service and advertising consultant. According to one account, he drew a $150,000 salary. Adjusted for the cost of living, that is equal to about $1.5 million today.
Hawkins quit GM to try his hand at selling baby buggies, Lewis says. The 1929 stock market collapse and a subsequent banking crisis in his hometown of Detroit hit him hard. "In the Depression, he lost his shirt," Lewis says.
The sales hero of Ford Motor Co. ended up bankrupt. He died in 1936 at age 69.
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