Tuesday, December 06, 2016

Who saved Ford from bankruptcy in the great depression? Henry Ford? Nope. Edsel Ford? Nope. The guy who fixed Edsel's car on his 1915 cross country trip, his brother in law Ernest


Henry Ford suddenly resigned the presidency of Ford in December 1918, and Edsel Ford was elected to succeed him.

Henry had been angered by minority stockholders, particularly the Dodge brothers, who had sued for increased dividends. He figured out a brilliant short term solution to having to put up with working for shareholders though.

Early in 1919 Henry Ford said he would form a new company and produce a car to rival the famous Model T.

Suddenly scared of the profitability of their Ford shares in view of Henry himself announcing a better car in the works, shareholders sold their shares to agents secretly working for the Fords.

This ruse brought complete ownership of Ford Motor back to the Ford family. The charade led to Edsel Ford's ownership of 41 percent of the company's stock that had been in non-Ford hands. Henry Ford remained the majority stockholder.

But then the 1920 recession hit, and Ford happened to be $75 million in debt to the Boston and New York banks due to rapid expansion and buying out the shareholders, including the Dodge brothers. As the recession deepened, he was at risk of losing the business.

Ernest Kanzler, a second Vice President at Ford in charge of the tractor side of the Ford business, Edsel's brother-in-law, (Edsel married Kanzler's wife Josephine's sister, but more on that under the links) and closest confidant, cancelled all supplier contracts, extended accounts payable from 60 to 120 days, and then used the standing inventory to assemble 90,000 cars, which were then sent to Ford dealers unsolicited under the standard terms: cash on delivery. Dealers had no choice but to pay for the cars or forfeit their franchises.

In this way, Ford threw his debt onto the backs of his dealers, the bankers were chased off, and Ford maintained control of his company. This was not the first or last time Ford gave his dealers a raw deal, and it was his practices in part that inspired all the various state franchise laws that give car dealers special protections.

Kanzler composed a six-page letter in January of 1926, pointing out that Chevrolet sales were rapidly gaining, while Ford's were in sharp decline.

Kanzler, while delicately refraining from direct criticism of Henry's beloved Model "T", called for a more competitive six cylinder car. "With every additional car our competitors sell, they get stronger and we get weaker."

Any critisism of the Model T infuriated Henry. Thereafter, Ernest Kanzler found himself ignored, ridiculed, and victimized in every conceivable way. Ultimately, while Edsel was out of the country, Henry had Kanzler fired. Henry really didn't get along with anyone, as no one was quite the same hard ass flint nosed old oak stump stubborn as Henry, except for maybe Thomas Edison and Harvey Firestone.

Even Edsel wasn't able to get along with the old man, and what is probably unknown to you is that part of this is due to Henry's farm upbringing but due to Henry's success in automobiles Edsel had been born and raised in the city, and then Edsel married the niece of one of the Hudson car company leaders and owner of the largest dept store in Detroit, and then moved farther from the country, into the most elite and highest society circle of his wife's old money family in Indian Village, and then into Grosse Pointe Shores.

After he left Ford, Kanzler became a prominent Detroit banker, and while he and HF I did not get on, he remained a close advisor to Edsel Ford, and later to Edsel's widow Eleanor, and to their son. Henry Ford II. To the family he was known as "Uncle Ernest."

Kanzler was also head of the War Production Board during World War II, and a director of the Detroit Lions football team.

In 1955 he married Rosemarie, and he died in 1967


Henry Ford II met his second wife, the Italian-born Cristina Vettore Austin, at one of Mrs. Kanzler's homes.
Mr. Ford's daughter, Charlotte Ford, met Stavros Niarchos, the Greek shipping tycoon whom she later married, at the Kanzler residence in St. Moritz.

Mrs. Kanzler was also credited with introducing Henry Fonda to his third wife, Countess Afdera Franchetti, and Oscar de la Renta to Francoise de Langlade, his first wife.

Over her lifetime, Mrs. Kanzler decorated and lived in 23 residences throughout the world.



  1. nice article - well done.

    1. thanks! I rarely do articles, they are time intensive. I also wonder how many people read them vs just looking at pictures of cool stuff, with short captions

  2. I read it and liked it too.

  3. Me too! Always appreciate an interesting article that isn't longer than my attention span!