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Most people credit Henry Ford with inventing the automobile. The fact is he didn’t — such a complex machine is the result of a combination of technologies developed by many people over time. He did, however, invent the assembly line, which revolutionized the way we make cars, and how much they cost.
In 1908, Ford’s company began selling his famous Model T for $850 each. The Model T was inexpensive for its day, and proved to be reliable and easy to operate. It quickly became very popular; and soon Ford found he was unable to meet the enormous demand for his cars.
Ford’s solution was to invent a moving industrial production line. By installing a moving belt in his factory, employees would be able to build cars one piece at a time, instead of one car at a time. This principle, called “division of labor”, allowed workers to focus on doing one thing very well, rather than being responsible for a number of tasks.
Ford found his new system produced cars quickly and efficiently; so efficiently that it considerably lowered the cost of assembling the cars. He decided to pass these savings along to his customers, and in 1915 dropped the price of the Model T to $290. That year, he sold 1 million cars.