Fordlandia, Brazil and the folly of best practice

In the late 1920s Henry Ford was looking for ways to reduce operating costs and, against a backdrop of cartel price hikes for British (Malay) rubber he moved to set up a Brasilian plantation that would produce latex for tyres using all the best practice that the king of the assembly lines could muster. By the 1940s, the Ford Motor company had invested over $200 million (current day pricing) in the Amazon region on a spectacular failure that acts as a stark reminder of what can go wrong when developed world logic seeks to plug and play in emerging and developing markets.

And we lived at 22 Amazon Street

Fordlandia, 10,000 square kilometers of Amazon rainforest, was styled on the Mid West towns of Fords experience with a healthy lifestyle – hamburgers were the staple diet – and, moral values. Alcohol and tobacco were forbidden. Line dancing and poetry readings of Longfellow and Wordsworth were encouraged. The factory and plantations were similarly based on the one best way of Fordism and the scientific management methods of F W Taylor (1911) – that Lenin and the Bolsheviks used to turbo charge industrialisation. Industrial engineers laid out the plantations in the Amazon – there were 200 rubber plants (hevea brasiliensis) per acre versus the 7 per acre of the primal rain forest. By 1930s riots broke through the social strait jacket to wreck the town and, the close proximity of the trees facilitated tree blight whilst sap eating insects reduced the trees to useless stumps. There followed a fresh attempt to “take the white man’s magic to the wilderness” (Washington Post) at Beltera but, after producing 750 versus a planned 30,000 tonnes; Ford accepted $200,000 from the Brazilian Government and withdrew. There is one best way to disaster – ignore local context.

Fordlandia is one of many utopian experiments to transfer best practice to the developing world. Leverville is another. A state within a state set up in the Belgian Congo to produce palm oil; William Lever presented King Leopold II with an ivory box containing the first cake of soap made from Congo palm oil which he noted in his journal “stank cursedly and wouldn’t lather”. Nonetheless, from this was born the United Africa Company (1929) – the major player from palm oil to cocoa and ground nuts – and a major presence throughout Africa for years to come.

Flat earth perspectives from Tom Friedman and others highlight the great leveller of Globalisation – which is associated with increasing cross border flows of goods and services, money, people and information. This process opens up the debate on best practice yet again and, conventional wisdom suggests that this process compels countries, industries and firms to converge toward a homogenous organizational pattern of “best practice” or “optimal efficiency”. This is rejected by Guillen (2001) and others in favour of diversity and more hybrid models.

Transformational Logistics goes further and, as recent Posts on the World Bank’s Logistics Performance Index indicate; there is scope for a logistics perspective that builds from asymetrical realities – characterised by products made in the informal market ending up in formal Malls or supermarkets in the developed world. Supply chains such as carpets, dairy products, leather, flowers, and agricultural products in general are rarely regulated in the conventional sense – mind you, neither are hedge funds.

Conventional logistics aims for better, cheaper and faster flows from end-to-end. Transformational alternatives build from local context; seeking to adapt what is there or, what can be made to work. Solutions have to be affordable and this may mean combining low tech and high tech solutions; they are more about behaviours than rules. They champion bottom up enterprise and initiative rather than centralised policy regulations. After all, few of the actors in the informal world are regulated in the conventional sense and the benefits of changing status have to be clear for anyone to make the move. All too often we apply developed world criteria to regulated business practice and baulk at dealing with the majority world. Is this really the best way forward?

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2 Responses to Fordlandia, Brazil and the folly of best practice

  1. Ed Freeland says:

    Another brilliant insight. This is turning into a must read blog! Like the links to Bolsheviks too! What is this all about – the link between Ford / Bolsheviks and Taylor?

  2. Sarah Hughes says:

    Indeed, to ignore local context is a road to disaster. I wonder what Firestone did differently in Liberia?

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