TheChek News Flow

The Tesla founder's ownership of Twitter could pose risks for him, just as Ford's ownership of a newspaper created controversy.

The historical parallels between Elon Musk and Henry Ford—two visionary car moguls who became the wealthiest and most famous men in the land—were many, even before Musk bought Twitter.

But by venturing into the wild world of social media, the Tesla CEO may be replaying aspects of one of the most troubling, and unsuccessful, episodes in Ford’s career.

In 1918, the year Ford turned 55, at the height of his fame and power, he bought a local newspaper, the Dearborn Independent in Michigan.

Advertisement: Scroll to Continue

Turning it into a national megaphone for unfounded conspiracy theories revolving around a group of Jewish capitalists who supposedly ran the world, the Independent drew swift condemnations and huge circulation gains. (Ford dealers were forced to guarantee a certain number of subscriptions of the newspaper.)

Ford put a lot of energy into the money-losing paper, consulting daily on content such as its series “The International Jew: The World’s Problem,” according to biographer Steven Watts. Facing legal threats and a boycott of his car company, however, he finally shuttered the Dearborn Independent in 1927.

Of interest to Tesla investors is what happened to Ford Motor during these years: It tanked.

Ford went from being the country’s dominant car maker—in 1919, it outsold the next seven brands combined—to being an also-ran behind General Motors. While the founder’s attention was occupied, the competition passed it by.

Could something similar happen to Tesla, today’s dominant electric-vehicle maker, with its 51-year-old CEO focused elsewhere?

To be clear, there’s no evidence that Musk holds anti-Semitic or racist beliefs. Instead, Twitter is being accused by civil liberties groups and media watchdogs of not adequately policing those who voice such beliefs. Since Musk’s purchase, the social-media site has seen a sharp rise in hate speech, according to the Network Contagion Research Institute of Rutgers University, which works to identify and forecast cybersocial threats.

Musk, Tesla, and Twitter didn’t answer requests for comment. After making his offer to buy Twitter last spring, Musk said he wants to turn it into a de facto town square, “a public platform that is maximally trusted and broadly inclusive.”

In December, after he had bought Twitter, Musk tweeted, “Hate speech impressions (# of times tweet was viewed) continue to decline, despite significant user growth.”

Musk and his brands have taken a reputational hit since the Twitter purchase, according to polls by U.S.-based Morning Consult and YouGov of the U.K. Musk, too, has taken a financial hit, being supplanted as the world’s wealthiest individual.

Dan Ives is one Tesla bull who blames the “debacle” in Tesla stock—its share price tumbled 65% last year—on Musk’s Twitter purchase. The managing director of equity research at Wedbush Securities cut his price target on Tesla in December to $175 from $250. He recently raised it to $200. Tesla shares were recently trading at $173, up 40% this year.

“It is crucial for Musk to name a CEO for Twitter and return his focus to Tesla and SpaceX, which are the crown jewels,” Ives says. “Tesla is still way out front of the other electric-vehicle makers. But it’s got a bull’s-eye on its back, and every rival is taking aim at it.”

Ford wore the bull’s-eye in 1919, and had since the first Model T rolled out of the factory 11 years earlier.

Ford didn’t invent the assembly line. But he was the first to harness its power on a mass scale, allowing him to produce cars faster and cheaper than the competition. The Model T was the result, and it was an immediate hit.

Debuting in 1908, the ungainly “Tin Lizzie” cost $850 (around $25,000 in today’s dollars). As Ford increased efficiency, the price actually declined, to $360 in 1916, when Buicks and Studebakers sold for $600 to $1,000,

In 1919, Ford produced 820,445 Model T’s. Second-place GM’s brands, led by Chevrolet at 129,118, totaled about half that number.

In a Sept. 25, 1922, article headlined “The Richest Man,” Barron’s calculated that Ford made $100 profit on each of the approximately 1.1 million Model T’s sold, and that the company—closely held by Ford—“could be capitalized at $2,000,000,000 and pay 5% on that capital.”

“His income,” Barron’s declared, “is probably unequaled in all history.”

Not just fabulously wealthy, Ford was a celebrity—the living embodiment of America’s emerging consumer lifestyle.

“Ford became a colossus in the American consciousness,” Watts writes in The People’s Tycoon: Henry Ford and the American Century. “He seemed to represent everything that was modern, innovative, and vital in this triumphant new society.”

The press followed Ford’s every move, a carload of reporters tagging along on his yearly camping trips with Thomas Edison. His interviews were top sellers—when he could be tracked down.

“About the hardest man in the country to reach is Henry Ford,” Barron’s bemoaned in a May 21, 1923, article. “No man is more inaccessible.”

But while Ford was enjoying his celebrity status, bolstered by a powerful public-relations machine—his ghostwritten 1922 autobiography was a best-seller—rival car makers were catching up.

In 1925, Barron’s reported, GM for the first time matched Ford’s earnings, on lower sales volume. This was thanks to its line of cars “distributed in all price classes.”

Under now-legendary President Alfred P. Sloan, GM was developing the modern corporation, complete with management training and a focus on research and long-term planning.

In 1927, the Dearborn Independent’s last year, Ford finally replaced the Tin Lizzie with the Model A, but it was too late. As Ford shut production down for months of retooling, Chevy rose to the No. 1 spot for the first time. GM would soon pull away and never look back.

How much time did Ford give to the newspaper in lieu of Ford Motor? Biographer Watts writes that he visited the paper’s offices nearly every day—they were housed in Ford’s huge River Rouge industrial complex—dictating content to editor William Cameron.

“Ford would talk, sometimes with his feet propped on Cameron’s desk, expounding his philosophy while the ghostwriter took notes,” Watts writes. Some of this went on “Mr. Ford’s Own Page,” a full sheet of his musings.

And although it’s impossible to gauge its effect on car sales, the Independent’s controversial subject matter drew condemnations from former U.S. presidents and Roman Catholic cardinals, and editorial rebukes from publications including The Wall Street Journal and the Minneapolis Star.

Facing a costly libel suit, and an Anti-Defamation League–sponsored boycott, Ford pulled the plug. His halfhearted apology issued upon the paper’s closing drew the attention of humorist Will Rogers.

“He used to have it in for the Jewish people,” Rogers quipped, “until he saw them in Chevrolets.”

The YouGov poll found that Tesla’s reputation had sunk the most among Democrats and liberals, while rising somewhat among Republicans and conservatives. Morning Consult reported a similar political divide.

At least for now, Tesla remains the dominant EV maker, capturing 65% of the market in 2022 (Ford, at 7.6%, was No. 2). And, as Al Root of Barron’s points out, Tesla is the most cost-efficient producer, meaning it can undercut rivals, as Ford did a century ago.

Yet that wasn’t enough to keep Ford on top. Despite the many advantages it possessed in 1919, the year Ford started publishing the Independent, it was all unraveling by the time he shut it in 1927.

Ford stuck with one-man company leadership too long. He stuck with the Model T too long. And he made a major miscalculation with the newspaper.

“When combined with the crisis in the Ford Motor Company regarding the decline of the Model T,” Watts writes, “the debacle of the Dearborn Independent revealed a man who had passed his peak.”

Today, Ives of Wedbush Securities says, “Elon Musk is the Henry Ford of the 21st century, and Tesla is the most important car company since Ford and the Model T.”

Tesla, which reiterated its long-term plan for growth of 50% a year, on average, can only hope it doesn’t follow the Model T’s final trajectory.