In the auto world, risk is a tradition as old as racing
Love or hate him; Henry Ford was a true pioneer in the auto industry. He created the moving assembly line, paid his workers almost double the going wage ($5 a day), and built the first mass-produced automobile, the Model T—all revolutionary innovations with long-lasting social and economic impact. But none would have been possible if Ford hadn’t snubbed George Selden and the Association of Licensed Automobile Manufacturers (ALAM) in 1903.
In the early days of the American car business, ALAM held the auto industry hostage using patent no. 549,160. Authored by Selden, it outlined the design for a “safe, simple, and cheap road locomotive, light in weight, easy to control, and possessing sufficient power to overcome any ordinary inclination.” Selden and ALAM claimed it encompassed all types gasoline-powered engines. Anyone wanting to build a car had to bow and pay tribute to the dastardly duo, or they were brought to court and forced out of business. A nice little oligarchy, huh?
Ford told them to shove it and started building cars regardless. Of course, Selden and ALAM sued. While he lost the original case, the ruling was overturned on appeal in 1911. “The appellate court ruled that the Selden patent was valid, but only for cars made to its specifications,” says Paul Ingrassia, editor of the Revs Institute for Automotive Research in Maples, Florida; Pulitzer Prize-winning reporter for the Wall Street Journal; and author of several books on the automobile and automotive industry. “Since no working automobile had ever been built to Selden’s design, automakers no longer had to pay the extortion, causing automobile production to boom and the industry to explode.