I wonder if Henry Ford would have been surprised by this 15 minute BMW factory production video tour (below). Few people, lots of robots, the process begins with a colorless shell and ends with the BMW moving off the assembly line. Slow moving and yet mesmerizing, the video displays 21st century manufacturing, and the reality of robotics complemented by human oversight.
At the beginning of the 19th century, describing his plans for a “car for the multitudes, ” Henry Ford said, ”The way to make automobiles is to make one automobile like another automobile, to make them all alike,…just like one pin is like another pin when it comes from a pin factory…” But that meant precision tools had to be designed like a “multiple drilling machine that could drill simultaneously 45 holes in one cylinder block from 4 directions in 1 1/2 minutes.” The next step, implemented in 1913, was the moving assembly line that he based on the “overhead trolley that the Chicago packers use on dressing beef.”
Before the moving assembly line, “250 assemblers, with a stationary assembling location for each chassis, the assemblers being served by 80 component carriers, worked 9 hours per day for 26 days to turn out 6,182 chassis assemblies. Total labor hours 330 x 9 x 26= 77,220 hours, giving 12 hours and 28 minutes for labor time to each chassis, about as good as was ever done with stationary chassis assembling.”
After the moving assembly line, in 1914, that 12 hour 28 minute assembly time per chassis plunged to 1 hour 33 minutes!
Fast forward 99 years to a BMW auto factory in Germany:
Sources and Resources: My Henry Ford quotes are from a wonderful out-of-print book edited by Alfred D. Chandler, Giant Enterprise, pp. 34-43. The BMW video and links to others like it are here.
BMW had to apologize for bad weather. It all began when their advertising agency decided to buy naming rights to a high-pressure area. Like hurricanes are named alphabetically in the U.S., high- and low-pressure weather areas that approach Central Europe have human names. Here, though, rather than a meteorologist, you can decide what the weather will be called. You just have to buy a letter from a German weather institute.
It cost BMW $394 to get “C.” Hoping to remind people of their Mini Cooper, they selected Cooper. However, instead of cool, crisp wintry weather, the “Cooper front” was disastrous. With hazardous conditions, extreme cold, and temperatures sinking way below zero, more than 100 people died. BMW even had to issue a statement explaining, “It was not intentional, and you cannot tell in advance what a weather system will do.”
Responsible for naming weather areas since 1954, the Berlin Institute for Meteorology created its “Adopt a Vortex” program in 2002 when it needed funding for a student weather observation program. You can look here to see the letters that are still available for 2012. High-pressure systems cost more than lows because they last longer.
Similarly, U.S. municipalities are using naming opportunities to fund their depleted coffers. In Philadelphia you can board the subway at an AT&T stop and in Brooklyn, NY, Nestle named the Juicy Juice Park.
The Economic Lesson
An economic lens takes us to the opportunity cost for a municipality when evaluating naming rights. The opportunity cost of a decision is the next best alternative. It is the alternative that is sacrificed.
On an opportunity cost chart, the alternative choices for a train stop could be “The Broad Street Stop” or the “Pizza Hut Stop.” The benefit of Broad Street is locational information. The benefit of the Pizza Hut name is municipal revenue. Which are you willing to sacrifice?
An Economic Question: As a municipal official, what naming rights might generate the most revenue?