In the 1920s the Ford Motor Company embarked upon a very ambitious project.
They negotiated with the Brazilian government to by a plot of land in the state of Pará.
The idea seemed like a good one on paper. The region was rich in rubber trees and rubber is a key component of vehicle production. Building a plant there would allow them to take advantage of cheap labour and keep the costs of production low.
The company set about clearing huge swathes of rainforest and built an American style town with houses, a hospital, a school and a number of shops. Henry Ford’s vision was an industrial utopia where locally Brazilian workers would be given a decent wage, provided with meals and free healthcare in exchange for labour on the rubber plantation. Sadly, it was to be a failure that took him the best part of two decades to walk away from.
So what went wrong?
In truth, the problems were innumerable. During the construction phase there were many issues with pests and the tree planting strategy made the problem worse.
The local workers also did not enjoy having a Midwestern American lifestyle imposed upon them. The canteen style company restaurant was not to their liking and they despised the fact that Ford was a teetotaler and had enforced a strict no-alcohol policy in the town. In frustration, they rioted and smashed their time clocks. They were far from content.
Despite hearing of the multiple issues back in the US, Ford continued to drink his own medicine.
He poured even more money into the crumbling project. To attract workers, he built an 18 hole golf course and even a dance hall. But the problems did not abate.
Tens of millions of dollars later and with little to show for it, the plant eventually closed down in 1945.
To add insult to injury, the land was sold back to the Brazilian government for a pittance.
Amazingly, Ford himself never visited Fordlandia!
It’s a brilliant example of ‘sunk cost bias’ (sometimes known as the ‘Concorde Effect’) and, quite frankly, glorious hubris.
For a longer read, check out the excellent Guardian article.