Ford was adamantly against labor unions. He explained his views on unions in Chapter 18 of My Life and Work. He thought they were too heavily influenced by some leaders who, despite their ostensible good motives, would end up doing more harm than good for workers. Most wanted to restrict productivity as a means to foster employment, but Ford saw this as self-defeating because, in his view, productivity was necessary for any economic prosperity to exist.
He believed that productivity gains that obviated certain jobs would nevertheless stimulate the larger economy and thus grow new jobs elsewhere, whether within the same corporation or in others. Ford also believed that union leaders (particularly Leninist-leaning ones) had a perverse incentive to foment perpetual socio-economic crisis as a way to maintain their own power. Meanwhile, he believed that smart managers had an incentive to do right by their workers, because doing so would maximize their own profits. (Ford did acknowledge, however, that many managers were basically too bad at managing to understand this fact.) But Ford believed that eventually, if good managers such as he could fend off the attacks of misguided people from both left and right (i.e., both socialists and bad-manager reactionaries), the good managers would create a socio-economic system wherein neither bad management nor bad unions could find enough support to continue existing.
To forestall union activity, Ford promoted Harry Bennett, a former Navy boxer, to head the Service Department. Bennett employed various intimidation tactics to squash union organizing. The most famous incident, in 1937, was a bloody brawl between company security men and organizers that became known as The Battle of the Overpass.
In the late 1930s and early 1940s, Edsel (who was president of the company) thought Ford had to come to some sort of collective bargaining agreement with the unions, because the violence, work disruptions, and bitter stalemates could not go on forever. But Henry (who still had the final veto in the company on a de facto basis even if not an official one) refused to cooperate. For several years, he kept Bennett in charge of talking to the unions that were trying to organize the Ford company. Sorensen's memoir makes clear that Henry's purpose in putting Bennett in charge was to make sure no agreements were ever reached.
The Ford company was the last Detroit automaker to recognize the United Auto Workers union (UAW). A sit-down strike by the UAW union in April 1941 closed the River Rouge Plant. Sorensen recounted that a distraught Henry Ford was very close to following through with a threat to break up the company rather than cooperate but that his wife Clara told him she would leave him if he destroyed the family business. She wanted to see their son and grandsons lead it into the future. Henry complied with his wife's ultimatum. Overnight, the Ford Motor Co. went from the most stubborn holdout among automakers to the one with the most favorable UAW contract terms. The contract was signed in June 1941.