Monday, July 1, 2013
On the Boston Manufacturing Company
On the Boston Manufacturing Company: When Francis Cabot Lowell returned from England in 1812, he set out to establish the first integrated textile mill in the United States. An integrated mill meant one which contained power looms alongside power carding and spinning machines (Samuel Slater's Pawtucket mill only had power spinning capabilities). The power, of course, came from a waterfall's gravitational force, such as the Moody Street Dam on the Charles River in Waltham, Massachusetts (pictured above). For Lowell, the Boston Manufacturing Company's primary goal was to produce a low-cost, coarse-fiber cotton fabric. The ideal market for this cotton fabric included farmers, factory workers, and slaves. But the real genius of Lowell's business model centered on its vertical integration of the textile industry. To integrate vertically, Lowell saw the need to convert raw cotton directly into a usable fiber. The only "X" factors in the integration process resided in the production of raw cotton (Southern slaves) and the demand for textiles (advertising). By 1815, Nathan Appleton and others had convinced Lowell of the need to create demand through marketing. They also believed the entire company hinged on the effectiveness of its power looms, because that was where the highest fixed costs existed. Workers could be hired and fired, but debt repayments for the power looms had to be consistent.