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progress is going to fling him off.

 

There is also the great fear of being thought a fool. So many men are

afraid of being considered fools. I grant that public opinion is a

powerful police influence for those who need it. Perhaps it is true that

the majority of men need the restraint of public opinion. Public opinion

may keep a man better than he would otherwise be--if not better morally,

at least better as far as his social desirability is concerned. But it

is not a bad thing to be a fool for righteousness' sake. The best of it

is that such fools usually live long enough to prove that they were not

fools--or the work they have begun lives long enough to prove they were

not foolish.

 

The money influence--the pressing to make a profit on an

"investment"--and its consequent neglect of or skimping of work and

hence of service showed itself to me in many ways. It seemed to be at

the bottom of most troubles. It was the cause of low wages--for without

well-directed work high wages cannot be paid. And if the whole attention

is not given to the work it cannot be well directed. Most men want to be

free to work; under the system in use they could not be free to work.

During my first experience I was not free--I could not give full play to

my ideas. Everything had to be planned to make money; the last

consideration was the work. And the most curious part of it all was the

insistence that it was the money and not the work that counted. It did

not seem to strike any one as illogical that money should be put ahead

of work--even though everyone had to admit that the profit had to come

from the work. The desire seemed to be to find a short cut to money and

to pass over the obvious short cut--which is through the work.

 

Take competition; I found that competition was supposed to be a menace

and that a good manager circumvented his competitors by getting a

monopoly through artificial means. The idea was that there were only a

certain number of people who could buy and that it was necessary to get

their trade ahead of someone else. Some will remember that later many of

the automobile manufacturers entered into an association under the

Selden Patent just so that it might be legally possible to control the

price and the output of automobiles. They had the same idea that so many

trades unions have--the ridiculous notion that more profit can be had

doing less work than more. The plan, I believe, is a very antiquated

one. I could not see then and am still unable to see that there is not

always enough for the man who does his work; time spent in fighting

competition is wasted; it had better be spent in doing the work. There

are always enough people ready and anxious to buy, provided you supply

what they want and at the proper price--and this applies to personal

services as well as to goods.

 

During this time of reflection I was far from idle. We were going ahead

with a four-cylinder motor and the building of a pair of big racing

cars. I had plenty of time, for I never left my business. I do not

believe a man can ever leave his business. He ought to think of it by

day and dream of it by night. It is nice to plan to do one's work in

office hours, to take up the work in the morning, to drop it in the

evening--and not have a care until the next morning. It is perfectly

possible to do that if one is so constituted as to be willing through

all of his life to accept direction, to be an employee, possibly a

responsible employee, but not a director or manager of anything. A

manual labourer must have a limit on his hours, otherwise he will wear

himself out. If he intends to remain always a manual labourer, then he

should forget about his work when the whistle blows, but if he intends

to go forward and do anything, the whistle is only a signal to start

thinking over the day's work in order to discover how it might be done

better.

 

The man who has the largest capacity for work and thought is the man who

is bound to succeed. I cannot pretend to say, because I do not know,

whether the man who works always, who never leaves his business, who is

absolutely intent upon getting ahead, and who therefore does get

ahead--is happier than the man who keeps office hours, both for his

brain and his hands. It is not necessary for any one to decide the

question. A ten-horsepower engine will not pull as much as a twenty. The

man who keeps brain office hours limits his horsepower. If he is

satisfied to pull only the load that he has, well and good, that is his

affair--but he must not complain if another who has increased his

horsepower pulls more than he does. Leisure and work bring different

results. If a man wants leisure and gets it--then he has no cause to

complain. But he cannot have both leisure and the results of work.

 

Concretely, what I most realized about business in that year--and I have

been learning more each year without finding it necessary to change my

first conclusions--is this:

 

(1) That finance is given a place ahead of work and therefore tends to

kill the work and destroy the fundamental of service.

 

(2) That thinking first of money instead of work brings on fear of

failure and this fear blocks every avenue of business--it makes a man

afraid of competition, of changing his methods, or of doing anything

which might change his condition.

 

(3) That the way is clear for any one who thinks first of service--of

doing the work in the best possible way.

 

 

CHAPTER III

 

STARTING THE REAL BUSINESS

 

 

In the little brick shop at 81 Park Place I had ample opportunity to

work out the design and some of the methods of manufacture of a new car.

Even if it were possible to organize the exact kind of corporation that

I wanted--one in which doing the work well and suiting the public would

be controlling factors--it became apparent that I never could produce a

thoroughly good motor car that might be sold at a low price under the

existing cut-and-try manufacturing methods.

 

Everybody knows that it is always possible to do a thing better the

second time. I do not know why manufacturing should not at that time

have generally recognized this as a basic fact--unless it might be that

the manufacturers were in such a hurry to obtain something to sell that

they did not take time for adequate preparation. Making "to order"

instead of making in volume is, I suppose, a habit, a tradition, that

has descended from the old handicraft days. Ask a hundred people how

they want a particular article made. About eighty will not know; they

will leave it to you. Fifteen will think that they must say something,

while five will really have preferences and reasons. The ninety-five,

made up of those who do not know and admit it and the fifteen who do not

know but do not admit it, constitute the real market for any product.

The five who want something special may or may not be able to pay the

price for special work. If they have the price, they can get the work,

but they constitute a special and limited market. Of the ninety-five

perhaps ten or fifteen will pay a price for quality. Of those remaining,

a number will buy solely on price and without regard to quality. Their

numbers are thinning with each day. Buyers are learning how to buy. The

majority will consider quality and buy the biggest dollar's worth of

quality. If, therefore, you discover what will give this 95 per cent. of

people the best all-round service and then arrange to manufacture at the

very highest quality and sell at the very lowest price, you will be

meeting a demand which is so large that it may be called universal.

 

This is not standardizing. The use of the word "standardizing" is very

apt to lead one into trouble, for it implies a certain freezing of

design and method and usually works out so that the manufacturer selects

whatever article he can the most easily make and sell at the highest

profit. The public is not considered either in the design or in the

price. The thought behind most standardization is to be able to make a

larger profit. The result is that with the economies which are

inevitable if you make only one thing, a larger and larger profit is

continually being had by the manufacturer. His output also becomes

larger--his facilities produce more--and before he knows it his markets

are overflowing with goods which will not sell. These goods would sell

if the manufacturer would take a lower price for them. There is always

buying power present--but that buying power will not always respond to

reductions in price. If an article has been sold at too high a price and

then, because of stagnant business, the price is suddenly cut, the

response is sometimes most disappointing. And for a very good reason.

The public is wary. It thinks that the price-cut is a fake and it sits

around waiting for a real cut. We saw much of that last year. If, on the

contrary, the economies of making are transferred at once to the price

and if it is well known that such is the policy of the manufacturer, the

public will have confidence in him and will respond. They will trust him

to give honest value. So standardization may seem bad business unless it

carries with it the plan of constantly reducing the price at which the

article is sold. And the price has to be reduced (this is very

important) because of the manufacturing economies that have come about

and not because the falling demand by the public indicates that it is

not satisfied with the price. The public should always be wondering how

it is possible to give so much for the money.

 

Standardization (to use the word as I understand it) is not just taking

one's best selling article and concentrating on it. It is planning day

and night and probably for years, first on something which will best

suit the public and then on how it should be made. The exact processes

of manufacturing will develop of themselves. Then, if we shift the

manufacturing from the profit to the service basis, we shall have a real

business in which the profits will be all that any one could desire.

 

All of this seems self-evident to me. It is the logical basis of any

business that wants to serve 95 per cent. of the community. It is the

logical way in which the community can serve itself. I cannot comprehend

why all business does not go on this basis. All that has to be done in

order to adopt it is to overcome the habit of grabbing at the nearest

dollar as though it were the only dollar in the world. The habit has

already to an extent been overcome. All the large and successful retail

stores in this country are on the one-price basis. The only further step

required is to throw overboard the idea of pricing on what the traffic

will bear and instead go to the common-sense basis of pricing on what it

costs to manufacture and then reducing the cost of manufacture. If the

design of the product has been sufficiently studied, then changes in it

will come very slowly. But changes in manufacturing processes will come

very rapidly and wholly naturally. That has been our experience in

everything we have undertaken. How naturally it has all come about, I

shall later outline. The point that I wish to impress here is that it is

impossible to get a product on which one may concentrate unless an

unlimited amount of study is given beforehand. It is not just an

afternoon's work.

 

These ideas were forming with me during this year of experimenting. Most

of the experimenting went into the building of racing cars. The idea in

those days was that a first-class car ought to be a racer. I never

really thought much of racing, but following the bicycle idea, the

manufacturers had the notion that winning a race on a track told the

public something about the merits of an automobile--although I can

hardly imagine any test that would tell less.

 

But, as the others were doing it, I, too, had to do it. In 1903, with

Tom Cooper, I built two cars solely for speed. They were quite alike.

One we named the "999" and the other the "Arrow." If an automobile were

going to be known for speed, then I was going to make an automobile that

would be known wherever speed was known. These were. I put in four great

big cylinders giving 80 H.P.--which up to that time had been unheard of.

The roar of those cylinders alone was enough to half kill a man. There

was only one seat. One life to a car was enough. I tried out the cars.

Cooper tried out the cars. We let them out at full speed. I cannot quite

describe the sensation. Going over Niagara Falls would have been but a

pastime after a ride in one of them. I did not want to take the

responsibility of racing the "999" which we put up first, neither did

Cooper. Cooper said he knew a man who lived on speed, that nothing could

go too fast for him. He wired to Salt Lake City and on came a

professional bicycle rider named Barney Oldfield. He had never driven a

motor car, but he liked the idea of trying it. He said he would try

anything once.

 

It took us only a week to teach him how to drive. The man did not know

what fear was. All that he had to learn was how to control the monster.

Controlling the fastest car of to-day was nothing as compared to

controlling that car. The steering wheel had not yet been thought of.

All the previous cars that I had built simply had tillers. On this one I

put a two-handed tiller, for holding the car in line required all the

strength of a strong man. The race for which we were working was at

three miles on the Grosse Point track. We kept our cars as a dark horse.

We left the predictions to the others. The tracks then were not

scientifically banked. It was not known how much speed a motor car could

develop. No one knew better than Oldfield what the turns meant and as he

took his seat, while I was cranking the car for the start, he remarked

cheerily: "Well, this chariot may kill me, but they will say afterward

that I was going like hell when she took me over the bank."

 

And he did go.... He never dared to look around. He did not shut off on

the curves. He simply let that car go--and go it did. He was about half

a mile ahead of the next man at the end of the race!

 

The "999" did what it was intended to do: It advertised the fact that I

could build a fast motorcar. A week after the race I formed the Ford

Motor Company. I was vice-president, designer, master mechanic,

superintendent, and general manager. The capitalization of the company

was one hundred thousand dollars, and of this I owned 25 1/2 per cent.

The total amount subscribed in cash was about twenty-eight thousand

dollars--which is the only money that the company has ever received for

the capital fund from other than operations. In the beginning I thought

that it was possible, notwithstanding my former experience, to go

forward with a company in which I owned less than the controlling share.

I very shortly found I had to have control and therefore in 1906, with

funds that I had earned in the company, I bought enough stock to bring

my holdings up to 51 per cent, and a little later bought enough more to

give me 58-1/2 per cent. The new equipment and the whole progress of the

company have always been financed out of earnings. In 1919 my son Edsel

purchased the remaining 41-1/2 per cent of the stock because certain of

the minority stockholders disagreed with my policies. For these shares

he paid at the rate of $12,500 for each $100 par and in all paid about

seventy-five millions.

 

The original company and its equipment, as may be gathered, were not

elaborate. We rented Strelow's carpenter shop on Mack Avenue. In making

my designs I had also worked out the methods of making, but, since at

that time we could not afford to buy machinery, the entire car was made

according to my designs, but by various manufacturers, and about all we

did, even in the way of assembling, was to put on the wheels, the tires,

and the body. That would really be the most economical method of

manufacturing if only one could be certain that all of the various parts

would be made on the manufacturing plan that I have above outlined. The

most economical manufacturing of the future will be that in which the

whole of an article is not made under one roof--unless, of course, it be

a very simple article. The modern--or better, the future--method is to

have each part made where it may best be made and then assemble the

parts into a complete unit at the points of consumption. That is the

method we are now following and expect to extend. It would make no

difference whether one company or one individual owned all the factories

fabricating the component parts of a single product, or whether such

part were made in our independently owned factory, _if only all adopted

the same service methods_. If we can buy as good a part as we can make

ourselves and the supply is ample and the price right, we do not attempt

to make it ourselves--or, at any rate, to make more than an emergency

supply. In fact, it might be better to have the ownership widely

scattered.

 

I had been experimenting principally upon the cutting down of weight.

Excess weight kills any self-propelled vehicle. There are a lot of fool

ideas about weight. It is queer, when you come to think of it, how some

fool terms get into current use. There is the phrase "heavyweight" as

applied to a man's mental apparatus! What does it mean? No one wants to

be fat and heavy of body--then why of head? For some clumsy reason we

have come to confuse strength with weight. The crude methods of early

building undoubtedly had much to do with this. The old ox-cart weighed a

ton--and it had so much weight that it was weak! To carry a few tons of

humanity from New York to Chicago, the railroad builds a train that

weighs many hundred tons, and the result is an absolute loss of real

strength and the extravagant waste of untold millions in the form of

power. The law of diminishing returns begins to operate at the point

where strength becomes weight. Weight may be desirable in a steam roller

but nowhere else. Strength has nothing to do with weight. The mentality

of the man who does things in the world is agile, light, and strong. The

most beautiful things in the world are those from which all excess

weight has been eliminated. Strength is never just weight--either in men

or things. Whenever any one suggests to me that I might increase weight

or add a part, I look into decreasing weight and eliminating a part! The

car that I designed was lighter than any car that had yet been made. It

would have been lighter if I had known how to make it so--later I got

the materials to make the lighter car.

 

In our first year we built "Model A," selling the runabout for eight

hundred and fifty dollars and the tonneau for one hundred dollars more.

This model had a two-cylinder opposed motor developing eight horsepower.

It had a chain drive, a seventy-two inch wheel base--which was supposed

to be long--and a fuel capacity of five gallons. We made and sold 1,708

cars in the first year. That is how well the public responded.

 

Every one of these "Model A's" has a history. Take No. 420. Colonel D.

C. Collier of California bought it in 1904. He used it for a couple of

years, sold it, and bought a new Ford. No. 420 changed hands frequently

until 1907 when it was bought by one Edmund Jacobs living near Ramona in

the heart of the mountains. He drove it for several years in the

roughest kind of work. Then he bought a new Ford and sold his old one.

By 1915 No. 420 had passed into the hands of a man named Cantello who

took out the motor, hitched it to a water pump, rigged up shafts on the

chassis and now, while the motor chugs away at the pumping of water, the

chassis drawn by a burro acts as a buggy. The moral, of course, is that

you can dissect a Ford but you cannot kill it.

 

In our first advertisement we said:

 

Our purpose is to construct and market an automobile specially

designed for everyday wear and tear--business, professional, and

family use; an automobile which will attain to a sufficient speed to

satisfy the average person without acquiring any of those breakneck

velocities which are so universally condemned; a machine which will

be admired by man, woman, and child alike for its compactness, its

simplicity, its safety, its all-around convenience, and--last but

not least--its exceedingly reasonable price, which places it within

the reach of many thousands who could not think of paying the

comparatively fabulous prices asked for most machines.

 

And these are the points we emphasized:

 

Good material.

 

Simplicity--most of the cars at that time required considerable skill in

their management.

 

The engine.

 

The ignition--which was furnished by two sets of six dry cell batteries.

 

The automatic oiling.

 

The simplicity and the ease of control of the transmission, which was of

the planetary type.

 

The workmanship.

 

We did not make the pleasure appeal. We never have. In its first

advertising we showed that a motor car was a utility. We said:

 

We often hear quoted the old proverb, "Time is money"--and yet how few

business and professional men act as if they really believed its truth.

 

Men who are constantly complaining of shortage of time and lamenting the

fewness of days in the week--men to whom every five minutes wasted means

a dollar thrown away--men to whom five minutes' delay sometimes means

the loss of many dollars--will yet depend on the haphazard,

uncomfortable, and limited means of transportation afforded by street

cars, etc., when the investment of an exceedingly moderate sum in the

purchase of a perfected, efficient, high-grade automobile would cut out

anxiety and unpunctuality and provide a luxurious means of travel ever

at your beck and call.

 

Always ready, always sure.

 

Built to save you time and consequent money.

 

Built to take you anywhere you want to go and bring you back again on

time.

 

Built to add to your reputation for punctuality; to keep your customers

good-humoured and in a buying mood.

 

Built for business or pleasure--just as you say.

 

Built also for the good of your health--to carry you "jarlessly" over

any kind of half decent roads, to refresh your brain with the luxury of

much "out-doorness" and your lungs with the "tonic of tonics"--the right

kind of atmosphere.

 

It is your say, too, when it comes to speed. You can--if you

choose--loiter lingeringly through shady avenues or you can press down

on the foot-lever until all the scenery looks alike to you and you have

to keep your eyes skinned to count the milestones as they pass.

 

I am giving the gist of this advertisement to show that, from the

beginning, we were looking to providing service--we never bothered with

a "sporting car."

 

The business went along almost as by magic. The cars gained a reputation

for standing up. They were tough, they were simple, and they were well

made. I was working on my design for a universal single model but I had

not settled the designs nor had we the money to build and equip the

proper kind of plant for manufacturing. I had not the money to discover

the very best and lightest materials. We still had to accept the

materials that the market offered--we got the best to be had but we had

no facilities for the scientific investigation of materials or for

original research.

 

My associates were not convinced that it was possible to restrict our

cars to a single model. The automobile trade was following the old

bicycle trade, in which every manufacturer thought it necessary to bring

out a new model each year and to make it so unlike all previous models

that those who had bought the former models would want to get rid of the

old and buy the new. That was supposed to be good business. It is the

same idea that women submit to in their clothing and hats. That is not

service--it seeks only to provide something new, not something better.

It is extraordinary how firmly rooted is the notion that

business--continuous selling--depends not on satisfying the customer

once and for all, but on first getting his money for one article and

then persuading him he ought to buy a new and different one. The plan

which I then had in the back of my head but to which we were not then

sufficiently advanced to give expression, was that, when a model was

settled upon then every improvement on that model should be

interchangeable with the old model, so that a car should never get out

of date. It is my ambition to have every piece of machinery, or other

non-consumable product that I turn out, so strong and so well made that

no one ought ever to have to buy a second one. A good machine of any

kind ought to last as long as a good watch.

 

In the second year we scattered our energies among three models. We made

a four-cylinder touring car, "Model B," which sold for two thousand

dollars; "Model C," which was a slightly improved "Model A" and sold at

fifty dollars more than the former price; and "Model F," a touring car

which sold for a thousand dollars. That is, we scattered our energy and

increased prices--and therefore we sold fewer cars than in the first

year. The sales were 1,695 cars.

 

That "Model B"--the first four-cylinder car for general road use--had to

be advertised. Winning a race or making a record was then the best kind

of advertising. So I fixed up the "Arrow," the twin of the old "999"--in

fact practically remade it--and a week before the New York Automobile

show I drove it myself over a surveyed mile straightaway on the ice. I

shall never forget that race. The ice seemed smooth enough, so smooth

that if I had called off the trial we should have secured an immense

amount of the wrong kind of advertising, but instead of being smooth,

that ice was seamed with fissures which I knew were going to mean

trouble the moment I got up speed. But there was nothing to do but go

through with the trial, and I let the old "Arrow" out. At every fissure

the car leaped into the air. I never knew how it was coming down. When I

wasn't in the air, I was skidding, but somehow I stayed top side up and

on the course, making a record that went all over the world! That put







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