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The most significant industry that fuelled the economic boom in the early twentieth century was the motor industry.

The growth of the motor industry

The rapid increase in production was due to the use of assembly lines. Each worker would focus on one specific aspect of making the car as the shell moved down a conveyor belt. This cut down the time it took to make a single car from 12.5 hours to just 1.5 hours, with a Model T coming off the production line every three minutes. This was called mass production. Many other consumer goods were also produced in this way.

Mass production and the cycle of prosperity

Mass production lowered production costs. This in turn lowered the purchase price of the car for consumers. Cars were now affordable for many working-class Americans. By 1927, the sale price of a new Model T had fallen to more than half of a new model's price when they were initially produced in 1908.

The increase in car sales also stimulated the production and profits of other associated industries, such as oil, leather, glass and textiles. The impact of this chain effect of growth can be illustrated through the cycle of prosperity.

• Mass production leads to increased demand for products and raw material.
• Increased demand leads to more business profits and a need for more workers.
• Workers have more disposable income.
• Workers spend more on consumer products and leisure activities.

Impact on society

This car industry boom changed American society. More roads were built, which improved the transportation network. This prompted new homes and towns to be built in the suburbs. People who owned cars could travel to new and different places and enjoyed a higher standard of living. This boosted the tourism and leisure industries.

While Henry Ford’s motor factories contributed significantly to the economic boom, some of his actions had a negative impact on society. Within Ford’s factories, workers were not allowed to organise into trade unions. The Ford Motor Company Service Department employed security men who intimidated and used force against union organisers. Ford did not recognise unions until 1941.

Henry Ford held racist and antisemitic views, and he used his power, wealth and influence to spread these views. In 1918 he bought a newspaper that allowed him to promote and publicise these beliefs to a wide audience, as every Ford car dealer had copies of the paper to give to customers.