Understanding Canada's Distilling Industry in the First Decades of the Twentieth Century
The paradigm of Fordism is the most popular and commonly used model when an examination of manufacturing industries in the first half of the twentieth century is undertaken. This is due to the fact that many individuals assume that Fordist production (the principles and methods applied to the production) was the dominant mode of industrial organization for most of the twentieth century. Henry Ford, the Ford Motor Company, and his principles of mass production as a part of the automobile industry, are considered to be the model industry for the paradigm of Fordism by which all other industrial comparisons during this time can be made. The distilling industry in Canada was very different for the simple fact that this particular industry did not adhere to the guiding principles of the Fordism paradigm. In fact assuming that the distilling industry undertook these guiding principles of Fordism would be a gross generalization, to include all manufacturing industries. It was not this simple within the distilling industry. By comparing this paradigm of thought with the distilling industry one will gain a greater understanding of Canada's distilling industry in the beginning decades of the twentieth century, at a time of immense restructuring throughout many manufacturing industries that in turn made this industry vastly different from the popular model, which many manufacturing industries were adopting. This comparison will occur under five categories: market, financial control, production technology, workforce, and the timing of mass production thereby illustrating that Fordism must be reconsidered when examining Canada's distilling industry.

Market
Fordism principles required a stabilization within the market to that of the standardization, in particular one product. In the automobile industry there was one product for the Ford Motor Company, the Model T from 1908 to 1925. The mass production of the Model T meant that Ford had to be less flexible in innovation as well as product design. The simplest of designs used in conjunction with new production processes was the key to this goal of an increased production capacity. The Model T was a new product for consumers and it was designed to be uncomplicated, durable, simple, without frills and most importantly affordable. Ford believed that the lowest priced automobile would produce an ever increasing demand for the product and consequently the Model T was constructed to be a "car for the masses" which in turn meant an almost unlimited market. This durable consumer product was a new luxury item and a reduction in price meant that virtually anyone had the opportunity to purchase the Model T. The automobile was not an item for the elite of society. By reducing the price of the product, Ford enlarged his potential market as well as stabilized it.

The distilling industry operated within a very different market, that is an established segmented market which meant the need to create numerous different products. Due to the confines in which the distilling industry operates, that of federal taxes, duty fees to export and strict governmental control in the form of regulations, the industry could never maximize profits by maximizing production and minimizing costs because to make money in this industry one must modify the price to achieve profit. Ford's strategy of increasing the production of the automobile and decreasing the cost to the consumer could only work in industries which could alter their price thereby applying this characteristic of Fordism which was the stabilization of the market and a new market for a consumer durable item.

It must also be stated that the distilling industry in general, but especially Canada's distilling industry, relies heavily on innovation, variation, quality, choice and above all taste. Stabilizing the market through standardization, a characteristic of Fordism, could never be applied to Canada's distilling industry in the early twentieth century. This was the time when Canada's distilling industry became unique. American Prohibition from 1922 to 1933 created an expanded market for Canadian distillers as our thirsty American neighbours were in search of whisky to drink. This decade of Canadian whisky supplied to the U.S. allowed individuals within the country to acquire a taste for Canadian whisky. Canada's distilling firms were able to get a "foothold" in the American market by establishing in the American palette the likeness for the light flavoured, blended Canadian whisky. Once Prohibition was over this only heightened the fierce competition within the market. A consumer could not only choose the type of whisky from a specific region but also choose from a selection of brands and this meant a very segmented market for Canadian distillers.

With a segmented market a company must strive to be different and capture the choice of the consumer. With an established product that people were accustomed to buying on a regular basis and there was no need to create or stabilize the market by standardization. In fact, anyone from any class could purchase whisky due to the price variation between brands and consequently brand competition was intense. This varying of brands allowed for demand fluctuations within the market. By the first two decades of the twentieth century there were already very distinct brands existing within the market. For a Canadian example, there was Walker's Canadian Club, Seagram's VO and Seagram's 83 to name a few. It became a matter of marketing the product to the consumers. Evidently, Canada's distilling industry did not face the same problem of the automobile industry. These two industries were very different in terms of the market in which each product was sold.

Financial Control
The automobile industry undertook vertical integration whereas the distilling industry undertook vertical integration to some extent but mainly horizontal integration in hopes of achieving economies of scale and greater control of the market. In Canada's distilling industry, it was horizontal integration that allowed the industry to survive and continue to supply the large market of not only Canada but the U.S. as well. Canada's distilling industry achieved concentration within the industry through horizontal integration or numerous mergers which created large conglomerates where oligopolist firms dominated. During the first decades of the twentieth century, the major five distilling firms in Canada consolidated together to create large North American firms. The two major firms that emerged were Hiram Walker-Gooderham and Worts and Distillers Corporation-Seagrams Ltd. or DC-SL Wiser. These firms achieved most of their financial control through horizontal integration by acquiring the competition. This financial control was very important in the industry due to the large capital investment in sophisticated plants and the need for a financial ability to store large quantities of new whisky for years.

Large vertically integrated firms characterize the Fordism paradigm where standardized production chains were internalized and controlled, economies of scale achieved and production facilities were spatially divided. The Ford Motor Company vertically integrated or purchased its suppliers. By achieving vertical integration, the origins for the development of a system of industrial organization to manage the large enterprises that were created for this new mass market. These new large Canadian distilling corporations that were quickly acquiring numerous plants also began to experience problems in managerial organization and employed the management hierarchy of top, middle and lower managers that is associated with the Fordism paradigm. This allowed the corporation to use the managers to monitor the processes of production and to coordinate efficiency within the plant. Consequently, it was mainly horizontal integration not vertical integration that propelled the distilling industry forward.

Production Technology
The distilling industry never underwent this Fordist model of production and had already achieved a form of mass production that could be applied to this continuous-process production industry. Consequently while the automobile industry was undergoing a radical transformation to mass production in the first decades of the twentieth century, Canada's distilling industry had moved beyond mass production technology into that of an organizational revolution within the production of spirits that would work for this particular type of manufacturing industry. It was a time of upgrading old equipment, implementation of new quality control techniques, new storage facilities and the implementation of a conveyor system of bottling. The efficient and increased production that was achieved throughout the 1920s and 1930s was a result of organizational improvements in the layout of the plants and a simple modernization in production equipment. It was the increased output that led to the formation of the large integrated enterprise. Co-ordination and control was achieved with a new design in the plants and there was no longer the strong need to innovate the methods or organize the worker movements because the continuous-process technology was operating efficiently.

For the production of whisky, speed was achieved in the bottling line because at no other place in the production process could speed be applied. For example one can not rush fermentation or the aging process. For the brands, uniformity was achieved in the packaging. Accuracy was essential in the production of the different brands to ensure that consistency remained in the product taste. A conveyor system was already in use for bottling and labeling the whisky and there was really no other area in the process that an assembly line could be added. Since the automobile was the combination of many different components the assembly line was revolutionary for production as it would be for other manufacturing industries in which the need to assemble parts was necessary such as sewing machines, radios and electronics. It was the assembly line and the conveyor system that enabled a continuous flow in production and efficiency in movement. Ford used precision methods, specialized tools and sequential operations along with interchangeable parts and the assembly line to increase control in the production process. With the introduction of Ford's new production process techniques, mainly the assembly line, within a short time span the annual output of the Model T expanded from 300 000 in 1914 to more that 2 million in 1923. The distilling production process is very different because the product takes a long time to produce through fermentation, distillation, blending and aging before the product is ready for market. Technically a whisky that was purchased would have been made at least two years earlier. Although the distilling industry had undergone mass production, it did not sacrifice the craftsmanship of quality in the product. Since the automobile and the distilling industry are vastly different, the production technology varied greatly to the point that the distilling industry could not use the principles of Fordism that achieved mass production.

Workforce
The workforce between the two industries also varied considerably. The automobile industry focused on a decrease of the skilled labour force whereas the distilling industry could never greatly decrease its skilled labour force due to the requirements for skilled and semi-skilled personnel in the production process. The paradigm of Fordism characterizes changes within the workforce in terms of the creation of an unskilled workforce, the loss of craftsmanship due to machinery and the introduction of women which meant gender specific tasks within the plant. In the Ford Motor Company there was no need for skilled labour because each labourer repeated an identical task at the same work station. According to Ford managers and engineers they had redesigned "the mechanical element" of production which was the human element in production and so workers had to conform to work tasks and routines. Ford began to experience high turn over rates and to ensure that there would always be the human element in the moving assembly line, on January 4, 1914 the Ford Motor Company planned to increase the wage to five dollars for an eight hour day which was more than twice the going rate of the current nine hour day. This allowed Ford to chose the employees he wanted which were highly skilled workers and ironically they would be working on the moving assembly line where the work would be monotonous tasks and so a waste of their skills. Despite this unskilled work, the "masses" could now afford the Model T. There was no need for craft skill with automatic machinery. The worker had once defined the product, the product now defined the worker and that it was this subordination of the worker to the product that marked the actual transition from the use of tools to that of machines.

The distilling industry relied on worker knowledge and skill for much of the production process. In the distilling industry a deskilling of the labour force could only occur within certain areas of the production process, such as the bottling line because semi-skilled and skilled workers were needed throughout the production process to monitor the sophisticated machinery. Male workers within distilleries were still forced to use their knowledge and skill when it came to the use of the machinery. In fact, these men were trained to specifically use this machinery. Men like the blender, stillman, taste tester, to the carpenters in the cooper shop, to the men in the machine shop, to the foremen and managers, they were all jobs requiring skill. There simply was not the divide between management, managers and workers, as it was in the automobile industry. Canadian distillers pride themselves on the craftsmanship of whisky and although mechanization occurred this did not eliminate the craftsmanship within the industry as the elimination occurred within the automobile industry.

Timing of Mass Production
The distilling industry had undergone large scale production and rapidly altered the production process decades before the automobile industry and Henry Ford's new principles of mass production were developed. Simply, there was no need to adopt Fordist ideals but instead a different set of ideals were applied to the industry to continue and expand the production capacity. When the words mass production are used today it conjures up the image of Ford and his assembly line producing the Model T automobile. Mass production had been around before Ford revolutionized the process and brought the rise of mass production to American manufacturing. In fact, the distilling industry had already undergone mechanization in the production process during the beginning of the Industrial Revolution. This was due to the fact that whisky is not consumer durable product but that of a consumer food product. Whisky as a consumer product had been available to "the masses" for decades and was not a luxury item. It already had a well established consumer market for the drink and the need to meet increasing demand meant that distillers had to mechanize the production. Mechanization appeared early within the distilling industry because of the relative ease in the integration of the flow of liquid through the processes of production and due to the chemical nature of the processes. This continuous-process production allowed Canadian distillers to meet the increased demand for the product. Ford was trying to establish a customer base, for "the masses", for his Model T automobile which was a new consumer product. The time in which the production technology greatly effected and ultimately changed production processes occurred in very different decades for the automobile industry and the distilling industry.

During Canada's Industrial Revolution the distilling industry underwent radical changes and revolutionized. For the distilling industry mass production meant a revolution within the technology which in turn greatly effected the production process. The industry at this time underwent streamlining and improvement. The timing of this mass production is very important and must be highlighted because for Canada's distilling industry during the time of Fordist mass production, the industry was undergoing the second revolutionary period in its history whereas the first period was during the 1860s when the mechanization occurred achieving mass production in the output of spirits. The distilling industry therefore could not utilize the Fordism paradigm in the 1920s because it had already undergone mass production within the industry and had moved into a second phase of change and that is organization within the plant design to better improve the efficiency on a different level. In fact we can see where some of the core principals of Fordism originated from consumer goods industries like our distilleries that had successfully created a model of mechanization and continuous production flow.

This comparison was made to illustrate that a generalization that all manufacturing industries undertook the Fordism paradigm excludes important manufacturing industries that did not adhere to this paradigm and to generalize only ignores the difference of an industry like distilling. To compare distilling to the paradigm of Fordism denotes the difference and uniqueness of the distilling industry thereby helping us attaining a better understanding of Canada's distilling industry in the first decades of the twentieth century. Canada's distilling industry operated in a segmented market, participated in horizontal integration, was a continuous-process industry, relied on craftsmanship, skilled and semi-skilled labour and undertook mass production almost fifty years before Ford's principles of mass production. This industry was different for it did not follow the paradigm of Fordism as Henry Ford created it and consequently this must be recognized. Simply, Fordism must be reconsidered when examining Canada's distilling industry.

References:

Chandler, Alfred D. The Visible Hand: The Managerial Revolution in American Business. Cambridge, Massachusetts: Harvard University Press, 1977.

MacKinnon, Tanya. Fordism Reconsidered: Restructuring within Canada's Distilling Industry. Wilfrid Laurier, 1999.

Matthews, Richard A. Fordism, Flexibility, and Regional Productivity Growth. New York: Garland Publishing Inc., 1996.

Piore, Michael J. and Charles F. Sabel. The Second Industrial Divide. New York: Basic Books Inc., 1984.

Shook, Robert L. Turnaround: The New Ford Motor Company. New York: Prentice Hall Press, 1990.