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house--thirty-one feet square and only a story and a half high--but it

was a comfortable place. I added to it my workshop, and when I was not

cutting timber I was working on the gas engines--learning what they were

and how they acted. I read everything I could find, but the greatest

knowledge came from the work. A gas engine is a mysterious sort of

thing--it will not always go the way it should. You can imagine how

those first engines acted!

 

It was in 1890 that I began on a double-cylinder engine. It was quite

impractical to consider the single cylinder for transportation

purposes--the fly-wheel had to be entirely too heavy. Between making the

first four-cycle engine of the Otto type and the start on a double

cylinder I had made a great many experimental engines out of tubing. I

fairly knew my way about. The double cylinder I thought could be applied

to a road vehicle and my original idea was to put it on a bicycle with a

direct connection to the crankshaft and allowing for the rear wheel of

the bicycle to act as the balance wheel. The speed was going to be

varied only by the throttle. I never carried out this plan because it

soon became apparent that the engine, gasoline tank, and the various

necessary controls would be entirely too heavy for a bicycle. The plan

of the two opposed cylinders was that, while one would be delivering

power the other would be exhausting. This naturally would not require so

heavy a fly-wheel to even the application of power. The work started in

my shop on the farm. Then I was offered a job with the Detroit Electric

Company as an engineer and machinist at forty-five dollars a month. I

took it because that was more money than the farm was bringing me and I

had decided to get away from farm life anyway. The timber had all been

cut. We rented a house on Bagley Avenue, Detroit. The workshop came

along and I set it up in a brick shed at the back of the house. During

the first several months I was in the night shift at the electric-light

plant--which gave me very little time for experimenting--but after that

I was in the day shift and every night and all of every Saturday night I

worked on the new motor. I cannot say that it was hard work. No work

with interest is ever hard. I always am certain of results. They always

come if you work hard enough. But it was a very great thing to have my

wife even more confident than I was. She has always been that way.

 

I had to work from the ground up--that is, although I knew that a number

of people were working on horseless carriages, I could not know what

they were doing. The hardest problems to overcome were in the making and

breaking of the spark and in the avoidance of excess weight. For the

transmission, the steering gear, and the general construction, I could

draw on my experience with the steam tractors. In 1892 I completed my

first motor car, but it was not until the spring of the following year

that it ran to my satisfaction. This first car had something of the

appearance of a buggy. There were two cylinders with a two-and-a-half-inch

bore and a six-inch stroke set side by side and over the rear axle. I

made them out of the exhaust pipe of a steam engine that I had bought.

They developed about four horsepower. The power was transmitted from the

motor to the countershaft by a belt and from the countershaft to the

rear wheel by a chain. The car would hold two people, the seat being

suspended on posts and the body on elliptical springs. There were two

speeds--one of ten and the other of twenty miles per hour--obtained by

shifting the belt, which was done by a clutch lever in front of the

driving seat. Thrown forward, the lever put in the high speed; thrown

back, the low speed; with the lever upright the engine could run free.

To start the car it was necessary to turn the motor over by hand with

the clutch free. To stop the car one simply released the clutch and

applied the foot brake. There was no reverse, and speeds other than

those of the belt were obtained by the throttle. I bought the iron work

for the frame of the carriage and also the seat and the springs. The

wheels were twenty-eight-inch wire bicycle wheels with rubber tires. The

balance wheel I had cast from a pattern that I made and all of the more

delicate mechanism I made myself. One of the features that I discovered

necessary was a compensating gear that permitted the same power to be

applied to each of the rear wheels when turning corners. The machine

altogether weighed about five hundred pounds. A tank under the seat held

three gallons of gasoline which was fed to the motor through a small

pipe and a mixing valve. The ignition was by electric spark. The

original machine was air-cooled--or to be more accurate, the motor

simply was not cooled at all. I found that on a run of an hour or more

the motor heated up, and so I very shortly put a water jacket around the

cylinders and piped it to a tank in the rear of the car over the

cylinders. Nearly all of these various features had been planned in

advance. That is the way I have always worked. I draw a plan and work

out every detail on the plan before starting to build. For otherwise one

will waste a great deal of time in makeshifts as the work goes on and

the finished article will not have coherence. It will not be rightly

proportioned. Many inventors fail because they do not distinguish

between planning and experimenting. The largest building difficulties

that I had were in obtaining the proper materials. The next were with

tools. There had to be some adjustments and changes in details of the

design, but what held me up most was that I had neither the time nor the

money to search for the best material for each part. But in the spring

of 1893 the machine was running to my partial satisfaction and giving an

opportunity further to test out the design and material on the road.

 

 

CHAPTER II

 

WHAT I LEARNED ABOUT BUSINESS

 

 

My "gasoline buggy" was the first and for a long time the only

automobile in Detroit. It was considered to be something of a nuisance,

for it made a racket and it scared horses. Also it blocked traffic. For

if I stopped my machine anywhere in town a crowd was around it before I

could start up again. If I left it alone even for a minute some

inquisitive person always tried to run it. Finally, I had to carry a

chain and chain it to a lamp post whenever I left it anywhere. And then

there was trouble with the police. I do not know quite why, for my

impression is that there were no speed-limit laws in those days. Anyway,

I had to get a special permit from the mayor and thus for a time enjoyed

the distinction of being the only licensed chauffeur in America. I ran

that machine about one thousand miles through 1895 and 1896 and then

sold it to Charles Ainsley of Detroit for two hundred dollars. That was

my first sale. I had built the car not to sell but only to experiment

with. I wanted to start another car. Ainsley wanted to buy. I could use

the money and we had no trouble in agreeing upon a price.

 

It was not at all my idea to make cars in any such petty fashion. I was

looking ahead to production, but before that could come I had to have

something to produce. It does not pay to hurry. I started a second car

in 1896; it was much like the first but a little lighter. It also had

the belt drive which I did not give up until some time later; the belts

were all right excepting in hot weather. That is why I later adopted

gears. I learned a great deal from that car. Others in this country and

abroad were building cars by that time, and in 1895 I heard that a Benz

car from Germany was on exhibition in Macy's store in New York. I

traveled down to look at it but it had no features that seemed worth

while. It also had the belt drive, but it was much heavier than my car.

I was working for lightness; the foreign makers have never seemed to

appreciate what light weight means. I built three cars in all in my home

shop and all of them ran for years in Detroit. I still have the first

car; I bought it back a few years later from a man to whom Mr. Ainsley

had sold it. I paid one hundred dollars for it.

 

During all this time I kept my position with the electric company and

gradually advanced to chief engineer at a salary of one hundred and

twenty-five dollars a month. But my gas-engine experiments were no more

popular with the president of the company than my first mechanical

leanings were with my father. It was not that my employer objected to

experiments--only to experiments with a gas engine. I can still hear him

say: "Electricity, yes, that's the coming thing. But gas--no."

 

He had ample grounds for his skepticism--to use the mildest terms.

Practically no one had the remotest notion of the future of the internal

combustion engine, while we were just on the edge of the great

electrical development. As with every comparatively new idea,

electricity was expected to do much more than we even now have any

indication that it can do. I did not see the use of experimenting with

electricity for my purposes. A road car could not run on a trolley even

if trolley wires had been less expensive; no storage battery was in

sight of a weight that was practical. An electrical car had of necessity

to be limited in radius and to contain a large amount of motive

machinery in proportion to the power exerted. That is not to say that I

held or now hold electricity cheaply; we have not yet begun to use

electricity. But it has its place, and the internal combustion engine

has its place. Neither can substitute for the other--which is

exceedingly fortunate.

 

I have the dynamo that I first had charge of at the Detroit Edison

Company. When I started our Canadian plant I bought it from an office

building to which it had been sold by the electric company, had it

revamped a little, and for several years it gave excellent service in

the Canadian plant. When we had to build a new power plant, owing to the

increase in business, I had the old motor taken out to my museum--a room

out at Dearborn that holds a great number of my mechanical treasures.

 

The Edison Company offered me the general superintendency of the company

but only on condition that I would give up my gas engine and devote

myself to something really useful. I had to choose between my job and my

automobile. I chose the automobile, or rather I gave up the job--there

was really nothing in the way of a choice. For already I knew that the

car was bound to be a success. I quit my job on August 15, 1899, and

went into the automobile business.

 

It might be thought something of a step, for I had no personal funds.

What money was left over from living was all used in experimenting. But

my wife agreed that the automobile could not be given up--that we had to

make or break. There was no "demand" for automobiles--there never is for

a new article. They were accepted in much the fashion as was more

recently the airplane. At first the "horseless carriage" was considered

merely a freak notion and many wise people explained with particularity

why it could never be more than a toy. No man of money even thought of

it as a commercial possibility. I cannot imagine why each new means of

transportation meets with such opposition. There are even those to-day

who shake their heads and talk about the luxury of the automobile and

only grudgingly admit that perhaps the motor truck is of some use. But

in the beginning there was hardly any one who sensed that the automobile

could be a large factor in industry. The most optimistic hoped only for

a development akin to that of the bicycle. When it was found that an

automobile really could go and several makers started to put out cars,

the immediate query was as to which would go fastest. It was a curious

but natural development--that racing idea. I never thought anything of

racing, but the public refused to consider the automobile in any light

other than as a fast toy. Therefore later we had to race. The industry

was held back by this initial racing slant, for the attention of the

makers was diverted to making fast rather than good cars. It was a

business for speculators.

 

A group of men of speculative turn of mind organized, as soon as I left

the electric company, the Detroit Automobile Company to exploit my car.

I was the chief engineer and held a small amount of the stock. For three

years we continued making cars more or less on the model of my first

car. We sold very few of them; I could get no support at all toward

making better cars to be sold to the public at large. The whole thought

was to make to order and to get the largest price possible for each car.

The main idea seemed to be to get the money. And being without authority

other than my engineering position gave me, I found that the new company

was not a vehicle for realizing my ideas but merely a money-making

concern--that did not make much money. In March, 1902, I resigned,

determined never again to put myself under orders. The Detroit

Automobile Company later became the Cadillac Company under the ownership

of the Lelands, who came in subsequently.

 

I rented a shop--a one-story brick shed--at 81 Park Place to continue my

experiments and to find out what business really was. I thought that it

must be something different from what it had proved to be in my first

adventure.

 

The year from 1902 until the formation of the Ford Motor Company was

practically one of investigation. In my little one-room brick shop I

worked on the development of a four-cylinder motor and on the outside I

tried to find out what business really was and whether it needed to be

quite so selfish a scramble for money as it seemed to be from my first

short experience. From the period of the first car, which I have

described, until the formation of my present company I built in all

about twenty-five cars, of which nineteen or twenty were built with the

Detroit Automobile Company. The automobile had passed from the initial

stage where the fact that it could run at all was enough, to the stage

where it had to show speed. Alexander Winton of Cleveland, the founder

of the Winton car, was then the track champion of the country and

willing to meet all comers. I designed a two-cylinder enclosed engine of

a more compact type than I had before used, fitted it into a skeleton

chassis, found that I could make speed, and arranged a race with Winton.

We met on the Grosse Point track at Detroit. I beat him. That was my

first race, and it brought advertising of the only kind that people

cared to read. The public thought nothing of a car unless it made

speed--unless it beat other racing cars. My ambition to build the

fastest car in the world led me to plan a four-cylinder motor. But of

that more later.

 

The most surprising feature of business as it was conducted was the

large attention given to finance and the small attention to service.

That seemed to me to be reversing the natural process which is that the

money should come as the result of work and not before the work. The

second feature was the general indifference to better methods of

manufacture as long as whatever was done got by and took the money. In

other words, an article apparently was not built with reference to how

greatly it could serve the public but with reference solely to how much

money could be had for it--and that without any particular care whether

the customer was satisfied. To sell him was enough. A dissatisfied

customer was regarded not as a man whose trust had been violated, but

either as a nuisance or as a possible source of more money in fixing up

the work which ought to have been done correctly in the first place. For

instance, in automobiles there was not much concern as to what happened

to the car once it had been sold. How much gasoline it used per mile was

of no great moment; how much service it actually gave did not matter;

and if it broke down and had to have parts replaced, then that was just

hard luck for the owner. It was considered good business to sell parts

at the highest possible price on the theory that, since the man had

already bought the car, he simply had to have the part and would be

willing to pay for it.

 

The automobile business was not on what I would call an honest basis, to

say nothing of being, from a manufacturing standpoint, on a scientific

basis, but it was no worse than business in general. That was the

period, it may be remembered, in which many corporations were being

floated and financed. The bankers, who before then had confined

themselves to the railroads, got into industry. My idea was then and

still is that if a man did his work well, the price he would get for

that work, the profits and all financial matters, would care for

themselves and that a business ought to start small and build itself up

and out of its earnings. If there are no earnings then that is a signal

to the owner that he is wasting his time and does not belong in that

business. I have never found it necessary to change those ideas, but I

discovered that this simple formula of doing good work and getting paid

for it was supposed to be slow for modern business. The plan at that

time most in favor was to start off with the largest possible

capitalization and then sell all the stock and all the bonds that could

be sold. Whatever money happened to be left over after all the stock and

bond-selling expenses and promoters, charges and all that, went

grudgingly into the foundation of the business. A good business was not

one that did good work and earned a fair profit. A good business was one

that would give the opportunity for the floating of a large amount of

stocks and bonds at high prices. It was the stocks and bonds, not the

work, that mattered. I could not see how a new business or an old

business could be expected to be able to charge into its product a great

big bond interest and then sell the product at a fair price. I have

never been able to see that.

 

I have never been able to understand on what theory the original

investment of money can be charged against a business. Those men in

business who call themselves financiers say that money is "worth" 6 per

cent, or 5 per cent, or some other per cent, and that if a business has

one hundred thousand dollars invested in it, the man who made the

investment is entitled to charge an interest payment on the money,

because, if instead of putting that money into the business he had put

it into a savings bank or into certain securities, he could have a

certain fixed return. Therefore they say that a proper charge against

the operating expenses of a business is the interest on this money. This

idea is at the root of many business failures and most service failures.

Money is not worth a particular amount. As money it is not worth

anything, for it will do nothing of itself. The only use of money is to

buy tools to work with or the product of tools. Therefore money is worth

what it will help you to produce or buy and no more. If a man thinks

that his money will earn 5 per cent, or 6 per cent, he ought to place it

where he can get that return, but money placed in a business is not a

charge on the business--or, rather, should not be. It ceases to be money

and becomes, or should become, an engine of production, and it is

therefore worth what it produces--and not a fixed sum according to some

scale that has no bearing upon the particular business in which the

money has been placed. Any return should come after it has produced, not

before.

 

Business men believed that you could do anything by "financing" it. If

it did not go through on the first financing then the idea was to

"refinance." The process of "refinancing" was simply the game of sending

good money after bad. In the majority of cases the need of refinancing

arises from bad management, and the effect of refinancing is simply to

pay the poor managers to keep up their bad management a little longer.

It is merely a postponement of the day of judgment. This makeshift of

refinancing is a device of speculative financiers. Their money is no

good to them unless they can connect it up with a place where real work

is being done, and that they cannot do unless, somehow, that place is

poorly managed. Thus, the speculative financiers delude themselves that

they are putting their money out to use. They are not; they are putting

it out to waste.

 

I determined absolutely that never would I join a company in which

finance came before the work or in which bankers or financiers had a

part. And further that, if there were no way to get started in the kind

of business that I thought could be managed in the interest of the

public, then I simply would not get started at all. For my own short

experience, together with what I saw going on around me, was quite

enough proof that business as a mere money-making game was not worth

giving much thought to and was distinctly no place for a man who wanted

to accomplish anything. Also it did not seem to me to be the way to make

money. I have yet to have it demonstrated that it is the way. For the

only foundation of real business is service.

 

A manufacturer is not through with his customer when a sale is

completed. He has then only started with his customer. In the case of an

automobile the sale of the machine is only something in the nature of an

introduction. If the machine does not give service, then it is better

for the manufacturer if he never had the introduction, for he will have

the worst of all advertisements--a dissatisfied customer. There was

something more than a tendency in the early days of the automobile to

regard the selling of a machine as the real accomplishment and that

thereafter it did not matter what happened to the buyer. That is the

shortsighted salesman-on-commission attitude. If a salesman is paid only

for what he sells, it is not to be expected that he is going to exert

any great effort on a customer out of whom no more commission is to be

made. And it is right on this point that we later made the largest

selling argument for the Ford. The price and the quality of the car

would undoubtedly have made a market, and a large market. We went beyond

that. A man who bought one of our cars was in my opinion entitled to

continuous use of that car, and therefore if he had a breakdown of any

kind it was our duty to see that his machine was put into shape again at

the earliest possible moment. In the success of the Ford car the early

provision of service was an outstanding element. Most of the expensive

cars of that period were ill provided with service stations. If your car

broke down you had to depend on the local repair man--when you were

entitled to depend upon the manufacturer. If the local repair man were a

forehanded sort of a person, keeping on hand a good stock of parts

(although on many of the cars the parts were not interchangeable), the

owner was lucky. But if the repair man were a shiftless person, with an

adequate knowledge of automobiles and an inordinate desire to make a

good thing out of every car that came into his place for repairs, then

even a slight breakdown meant weeks of laying up and a whopping big

repair bill that had to be paid before the car could be taken away. The

repair men were for a time the largest menace to the automobile

industry. Even as late as 1910 and 1911 the owner of an automobile was

regarded as essentially a rich man whose money ought to be taken away

from him. We met that situation squarely and at the very beginning. We

would not have our distribution blocked by stupid, greedy men.

 

That is getting some years ahead of the story, but it is control by

finance that breaks up service because it looks to the immediate dollar.

If the first consideration is to earn a certain amount of money, then,

unless by some stroke of luck matters are going especially well and

there is a surplus over for service so that the operating men may have a

chance, future business has to be sacrificed for the dollar of to-day.

 

And also I noticed a tendency among many men in business to feel that

their lot was hard--they worked against a day when they might retire and

live on an income--get out of the strife. Life to them was a battle to

be ended as soon as possible. That was another point I could not

understand, for as I reasoned, life is not a battle except with our own

tendency to sag with the downpull of "getting settled." If to petrify is

success all one has to do is to humour the lazy side of the mind but if

to grow is success, then one must wake up anew every morning and keep

awake all day. I saw great businesses become but the ghost of a name

because someone thought they could be managed just as they were always

managed, and though the management may have been most excellent in its

day, its excellence consisted in its alertness to its day, and not in

slavish following of its yesterdays. Life, as I see it, is not a

location, but a journey. Even the man who most feels himself "settled"

is not settled--he is probably sagging back. Everything is in flux, and

was meant to be. Life flows. We may live at the same number of the

street, but it is never the same man who lives there.

 

And out of the delusion that life is a battle that may be lost by a

false move grows, I have noticed, a great love for regularity. Men fall

into the half-alive habit. Seldom does the cobbler take up with the

new-fangled way of soling shoes, and seldom does the artisan willingly

take up with new methods in his trade. Habit conduces to a certain

inertia, and any disturbance of it affects the mind like trouble. It

will be recalled that when a study was made of shop methods, so that the

workmen might be taught to produce with less useless motion and fatigue,

it was most opposed by the workmen themselves. Though they suspected

that it was simply a game to get more out of them, what most irked them

was that it interfered with the well-worn grooves in which they had

become accustomed to move. Business men go down with their businesses

because they like the old way so well they cannot bring themselves to

change. One sees them all about--men who do not know that yesterday is

past, and who woke up this morning with their last year's ideas. It

could almost be written down as a formula that when a man begins to

think that he has at last found his method he had better begin a most

searching examination of himself to see whether some part of his brain

has not gone to sleep. There is a subtle danger in a man thinking that

he is "fixed" for life. It indicates that the next jolt of the wheel of