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"Model B" on the map--but not enough on to overcome the price advances.

No stunt and no advertising will sell an article for any length of time.

Business is not a game. The moral is coming.

 

Our little wooden shop had, with the business we were doing, become

totally inadequate, and in 1906 we took out of our working capital

sufficient funds to build a three-story plant at the corner of Piquette

and Beaubien streets--which for the first time gave us real

manufacturing facilities. We began to make and to assemble quite a

number of the parts, although still we were principally an assembling

shop. In 1905-1906 we made only two models--one the four-cylinder car at

$2,000 and another touring car at $1,000, both being the models of the

previous year--and our sales dropped to 1,599 cars.

 

Some said it was because we had not brought out new models. I thought it

was because our cars were too expensive--they did not appeal to the 95

per cent. I changed the policy in the next year--having first acquired

stock control. For 1906-1907 we entirely left off making touring cars

and made three models of runabouts and roadsters, none of which differed

materially from the other in manufacturing process or in component

parts, but were somewhat different in appearance. The big thing was that

the cheapest car sold for $600 and the most expensive for only $750, and

right there came the complete demonstration of what price meant. We sold

8,423 cars--nearly five times as many as in our biggest previous year.

Our banner week was that of May 15, 1908, when we assembled 311 cars in

six working days. It almost swamped our facilities. The foreman had a

tallyboard on which he chalked up each car as it was finished and turned

over to the testers. The tallyboard was hardly equal to the task. On one

day in the following June we assembled an even one hundred cars.

 

In the next year we departed from the programme that had been so

successful and I designed a big car--fifty horsepower, six

cylinder--that would burn up the roads. We continued making our small

cars, but the 1907 panic and the diversion to the more expensive model

cut down the sales to 6,398 cars.

 

We had been through an experimenting period of five years. The cars were

beginning to be sold in Europe. The business, as an automobile business

then went, was considered extraordinarily prosperous. We had plenty of

money. Since the first year we have practically always had plenty of

money. We sold for cash, we did not borrow money, and we sold directly

to the purchaser. We had no bad debts and we kept within ourselves on

every move. I have always kept well within my resources. I have never

found it necessary to strain them, because, inevitably, if you give

attention to work and service, the resources will increase more rapidly

than you can devise ways and means of disposing of them.

 

We were careful in the selection of our salesmen. At first there was

great difficulty in getting good salesmen because the automobile trade

was not supposed to be stable. It was supposed to be dealing in a

luxury--in pleasure vehicles. We eventually appointed agents, selecting

the very best men we could find, and then paying to them a salary larger

than they could possibly earn in business for themselves. In the

beginning we had not paid much in the way of salaries. We were feeling

our way, but when we knew what our way was, we adopted the policy of

paying the very highest reward for service and then insisting upon

getting the highest service. Among the requirements for an agent we laid

down the following:

 

(1) A progressive, up-to-date man keenly alive to the possibilities of

business.

 

(2) A suitable place of business clean and dignified in appearance.

 

(3) A stock of parts sufficient to make prompt replacements and keep in

active service every Ford car in his territory.

 

(4) An adequately equipped repair shop which has in it the right

machinery for every necessary repair and adjustment.

 

(5) Mechanics who are thoroughly familiar with the construction and

operation of Ford cars.

 

(6) A comprehensive bookkeeping system and a follow-up sales system, so

that it may be instantly apparent what is the financial status of the

various departments of his business, the condition and size of his

stock, the present owners of cars, and the future prospects.

 

(7) Absolute cleanliness throughout every department. There must be no

unwashed windows, dusty furniture, dirty floors.

 

(8) A suitable display sign.

 

(9) The adoption of policies which will ensure absolutely square dealing

and the highest character of business ethics.

 

And this is the general instruction that was issued:

 

A dealer or a salesman ought to have the name of every possible

automobile buyer in his territory, including all those who have

never given the matter a thought. He should then personally solicit

by visitation if possible--by correspondence at the least--every man

on that list and then making necessary memoranda, know the

automobile situation as related to every resident so solicited. If

your territory is too large to permit this, you have too much

territory.

 

The way was not easy. We were harried by a big suit brought against the

company to try to force us into line with an association of automobile

manufacturers, who were operating under the false principle that there

was only a limited market for automobiles and that a monopoly of that

market was essential. This was the famous Selden Patent suit. At times

the support of our defense severely strained our resources. Mr. Selden,

who has but recently died, had little to do with the suit. It was the

association which sought a monopoly under the patent. The situation was

this:

 

George B. Selden, a patent attorney, filed an application as far back as

1879 for a patent the object of which was stated to be "The production

of a safe, simple, and cheap road locomotive, light in weight, easy to

control, possessed of sufficient power to overcome an ordinary

inclination." This application was kept alive in the Patent Office, by

methods which are perfectly legal, until 1895, when the patent was

granted. In 1879, when the application was filed, the automobile was

practically unknown to the general public, but by the time the patent

was issued everybody was familiar with self-propelled vehicles, and most

of the men, including myself, who had been for years working on motor

propulsion, were surprised to learn that what we had made practicable

was covered by an application of years before, although the applicant

had kept his idea merely as an idea. He had done nothing to put it into

practice.

 

The specific claims under the patent were divided into six groups and I

think that not a single one of them was a really new idea even in 1879

when the application was filed. The Patent Office allowed a combination

and issued a so-called "combination patent" deciding that the

combination (a) of a carriage with its body machinery and steering

wheel, with the (b) propelling mechanism clutch and gear, and finally

(c) the engine, made a valid patent.

 

With all of that we were not concerned. I believed that my engine had

nothing whatsoever in common with what Selden had in mind. The powerful

combination of manufacturers who called themselves the "licensed

manufacturers" because they operated under licenses from the patentee,

brought suit against us as soon as we began to be a factor in motor

production. The suit dragged on. It was intended to scare us out of

business. We took volumes of testimony, and the blow came on September

15, 1909, when Judge Hough rendered an opinion in the United States

District Court finding against us. Immediately that Licensed Association

began to advertise, warning prospective purchasers against our cars.

They had done the same thing in 1903 at the start of the suit, when it

was thought that we could be put out of business. I had implicit

confidence that eventually we should win our suit. I simply knew that we

were right, but it was a considerable blow to get the first decision

against us, for we believed that many buyers--even though no injunction

was issued against us--would be frightened away from buying because of

the threats of court action against individual owners. The idea was

spread that if the suit finally went against me, every man who owned a

Ford car would be prosecuted. Some of my more enthusiastic opponents, I

understand, gave it out privately that there would be criminal as well

as civil suits and that a man buying a Ford car might as well be buying

a ticket to jail. We answered with an advertisement for which we took

four pages in the principal newspapers all over the country. We set out

our case--we set out our confidence in victory--and in conclusion said:

 

In conclusion we beg to state if there are any prospective automobile

buyers who are at all intimidated by the claims made by our adversaries

that we will give them, in addition to the protection of the Ford Motor

Company with its some $6,000,000.00 of assets, an individual bond backed

by a Company of more than $6,000,000.00 more of assets, so that each and

every individual owner of a Ford car will be protected until at least

$12,000,000.00 of assets have been wiped out by those who desire to

control and monopolize this wonderful industry.

 

The bond is yours for the asking, so do not allow yourself to be sold

inferior cars at extravagant prices because of any statement made by

this "Divine" body.

 

N. B.--This fight is not being waged by the Ford Motor Company without

the advice and counsel of the ablest patent attorneys of the East and

West.

 

We thought that the bond would give assurance to the buyers--that they

needed confidence. They did not. We sold more than eighteen thousand

cars--nearly double the output of the previous year--and I think about

fifty buyers asked for bonds--perhaps it was less than that.

 

As a matter of fact, probably nothing so well advertised the Ford car

and the Ford Motor Company as did this suit. It appeared that we were

the under dog and we had the public's sympathy. The association had

seventy million dollars--we at the beginning had not half that number of

thousands. I never had a doubt as to the outcome, but nevertheless it

was a sword hanging over our heads that we could as well do without.

Prosecuting that suit was probably one of the most shortsighted acts

that any group of American business men has ever combined to commit.

Taken in all its sidelights, it forms the best possible example of

joining unwittingly to kill a trade. I regard it as most fortunate for

the automobile makers of the country that we eventually won, and the

association ceased to be a serious factor in the business. By 1908,

however, in spite of this suit, we had come to a point where it was

possible to announce and put into fabrication the kind of car that I

wanted to build.

 

 

CHAPTER IV

 

THE SECRET OF MANUFACTURING AND SERVING

 

 

Now I am not outlining the career of the Ford Motor Company for any

personal reason. I am not saying: "Go thou and do likewise." What I am

trying to emphasize is that the ordinary way of doing business is not

the best way. I am coming to the point of my entire departure from the

ordinary methods. From this point dates the extraordinary success of the

company.

 

We had been fairly following the custom of the trade. Our automobile was

less complex than any other. We had no outside money in the concern. But

aside from these two points we did not differ materially from the other

automobile companies, excepting that we had been somewhat more

successful and had rigidly pursued the policy of taking all cash

discounts, putting our profits back into the business, and maintaining a

large cash balance. We entered cars in all of the races. We advertised

and we pushed our sales. Outside of the simplicity of the construction

of the car, our main difference in design was that we made no provision

for the purely "pleasure car." We were just as much a pleasure car as

any other car on the market, but we gave no attention to purely luxury

features. We would do special work for a buyer, and I suppose that we

would have made a special car at a price. We were a prosperous company.

We might easily have sat down and said: "Now we have arrived. Let us

hold what we have got."

 

Indeed, there was some disposition to take this stand. Some of the

stockholders were seriously alarmed when our production reached one

hundred cars a day. They wanted to do something to stop me from ruining

the company, and when I replied to the effect that one hundred cars a

day was only a trifle and that I hoped before long to make a thousand a

day, they were inexpressibly shocked and I understand seriously

contemplated court action. If I had followed the general opinion of my

associates I should have kept the business about as it was, put our

funds into a fine administration building, tried to make bargains with

such competitors as seemed too active, made new designs from time to

time to catch the fancy of the public, and generally have passed on into

the position of a quiet, respectable citizen with a quiet, respectable

business.

 

The temptation to stop and hang on to what one has is quite natural. I

can entirely sympathize with the desire to quit a life of activity and

retire to a life of ease. I have never felt the urge myself but I can

comprehend what it is--although I think that a man who retires ought

entirely to get out of a business. There is a disposition to retire and

retain control. It was, however, no part of my plan to do anything of

that sort. I regarded our progress merely as an invitation to do

more--as an indication that we had reached a place where we might begin

to perform a real service. I had been planning every day through these

years toward a universal car. The public had given its reactions to the

various models. The cars in service, the racing, and the road tests gave

excellent guides as to the changes that ought to be made, and even by

1905 I had fairly in mind the specifications of the kind of car I wanted

to build. But I lacked the material to give strength without weight. I

came across that material almost by accident.

 

In 1905 I was at a motor race at Palm Beach. There was a big smash-up

and a French car was wrecked. We had entered our "Model K"--the

high-powered six. I thought the foreign cars had smaller and better

parts than we knew anything about. After the wreck I picked up a little

valve strip stem. It was very light and very strong. I asked what it was

made of. Nobody knew. I gave the stem to my assistant.

 

"Find out all about this," I told him. "That is the kind of material we

ought to have in our cars."

 

He found eventually that it was a French steel and that there was

vanadium in it. We tried every steel maker in America--not one could

make vanadium steel. I sent to England for a man who understood how to

make the steel commercially. The next thing was to get a plant to turn

it out. That was another problem. Vanadium requires 3,000 degrees

Fahrenheit. The ordinary furnace could not go beyond 2,700 degrees. I

found a small steel company in Canton, Ohio. I offered to guarantee them

against loss if they would run a heat for us. They agreed. The first

heat was a failure. Very little vanadium remained in the steel. I had

them try again, and the second time the steel came through. Until then

we had been forced to be satisfied with steel running between 60,000 and

70,000 pounds tensile strength. With vanadium, the strength went up to

170,000 pounds.

 

Having vanadium in hand I pulled apart our models and tested in detail

to determine what kind of steel was best for every part--whether we

wanted a hard steel, a tough steel, or an elastic steel. We, for the

first time I think, in the history of any large construction, determined

scientifically the exact quality of the steel. As a result we then

selected twenty different types of steel for the various steel parts.

About ten of these were vanadium. Vanadium was used wherever strength

and lightness were required. Of course they are not all the same kind of

vanadium steel. The other elements vary according to whether the part is

to stand hard wear or whether it needs spring--in short, according to

what it needs. Before these experiments I believe that not more than

four different grades of steel had ever been used in automobile

construction. By further experimenting, especially in the direction of

heat treating, we have been able still further to increase the strength

of the steel and therefore to reduce the weight of the car. In 1910 the

French Department of Commerce and Industry took one of our steering

spindle connecting rod yokes--selecting it as a vital unit--and tried it

against a similar part from what they considered the best French car,

and in every test our steel proved the stronger.

 

The vanadium steel disposed of much of the weight. The other requisites

of a universal car I had already worked out and many of them were in

practice. The design had to balance. Men die because a part gives out.

Machines wreck themselves because some parts are weaker than others.

Therefore, a part of the problem in designing a universal car was to

have as nearly as possible all parts of equal strength considering their

purpose--to put a motor in a one-horse shay. Also it had to be fool

proof. This was difficult because a gasoline motor is essentially a

delicate instrument and there is a wonderful opportunity for any one who

has a mind that way to mess it up. I adopted this slogan:

 

"When one of my cars breaks down I know I am to blame."

 

From the day the first motor car appeared on the streets it had to me

appeared to be a necessity. It was this knowledge and assurance that led

me to build to the one end--a car that would meet the wants of the

multitudes. All my efforts were then and still are turned to the

production of one car--one model. And, year following year, the pressure

was, and still is, to improve and refine and make better, with an

increasing reduction in price. The universal car had to have these

attributes:

 

(1) Quality in material to give service in use. Vanadium steel is the

strongest, toughest, and most lasting of steels. It forms the foundation

and super-structure of the cars. It is the highest quality steel in this

respect in the world, regardless of price.

 

(2) Simplicity in operation--because the masses are not mechanics.

 

(3) Power in sufficient quantity.

 

(4) Absolute reliability--because of the varied uses to which the cars

would be put and the variety of roads over which they would travel.

 

(5) Lightness. With the Ford there are only 7.95 pounds to be carried by

each cubic inch of piston displacement. This is one of the reasons why

Ford cars are "always going," wherever and whenever you see

them--through sand and mud, through slush, snow, and water, up hills,

across fields and roadless plains.

 

(6) Control--to hold its speed always in hand, calmly and safely meeting

every emergency and contingency either in the crowded streets of the

city or on dangerous roads. The planetary transmission of the Ford gave

this control and anybody could work it. That is the "why" of the saying:

"Anybody can drive a Ford." It can turn around almost anywhere.

 

(7) The more a motor car weighs, naturally the more fuel and lubricants

are used in the driving; the lighter the weight, the lighter the expense

of operation. The light weight of the Ford car in its early years was

used as an argument against it. Now that is all changed.

 

The design which I settled upon was called "Model T." The important

feature of the new model--which, if it were accepted, as I thought it

would be, I intended to make the only model and then start into real

production--was its simplicity. There were but four constructional units

in the car--the power plant, the frame, the front axle, and the rear

axle. All of these were easily accessible and they were designed so that

no special skill would be required for their repair or replacement. I

believed then, although I said very little about it because of the

novelty of the idea, that it ought to be possible to have parts so

simple and so inexpensive that the menace of expensive hand repair work

would be entirely eliminated. The parts could be made so cheaply that it

would be less expensive to buy new ones than to have old ones repaired.

They could be carried in hardware shops just as nails or bolts are

carried. I thought that it was up to me as the designer to make the car

so completely simple that no one could fail to understand it.

 

That works both ways and applies to everything. The less complex an

article, the easier it is to make, the cheaper it may be sold, and

therefore the greater number may be sold.

 

It is not necessary to go into the technical details of the construction

but perhaps this is as good a place as any to review the various models,

because "Model T" was the last of the models and the policy which it

brought about took this business out of the ordinary line of business.

Application of the same idea would take any business out of the ordinary

run.

 

I designed eight models in all before "Model T." They were: "Model A,"

"Model B," "Model C," "Model F," "Model N," "Model R," "Model S," and

"Model K." Of these, Models "A," "C," and "F" had two-cylinder opposed

horizontal motors. In "Model A" the motor was at the rear of the

driver's seat. In all of the other models it was in a hood in front.

Models "B," "N," "R," and "S" had motors of the four-cylinder vertical

type. "Model K" had six cylinders. "Model A" developed eight horsepower.

"Model B" developed twenty-four horsepower with a 4-1/2-inch cylinder

and a 5-inch stroke. The highest horsepower was in "Model K," the

six-cylinder car, which developed forty horsepower. The largest

cylinders were those of "Model B." The smallest were in Models "N," "R,"

and "S" which were 3-3/4 inches in diameter with a 3-3/8-inch stroke.

"Model T" has a 3-3/4-inch cylinder with a 4-inch stroke. The ignition

was by dry batteries in all excepting "Model B," which had storage

batteries, and in "Model K" which had both battery and magneto. In the

present model, the magneto is a part of the power plant and is built in.

The clutch in the first four models was of the cone type; in the last

four and in the present model, of the multiple disc type. The

transmission in all of the cars has been planetary. "Model A" had a

chain drive. "Model B" had a shaft drive. The next two models had chain

drives. Since then all of the cars have had shaft drives. "Model A" had

a 72-inch wheel base. Model "B," which was an extremely good car, had 92

inches. "Model K" had 120 inches. "Model C" had 78 inches. The others

had 84 inches, and the present car has 100 inches. In the first five

models all of the equipment was extra. The next three were sold with a

partial equipment. The present car is sold with full equipment. Model

"A" weighed 1,250 pounds. The lightest cars were Models "N" and "R."

They weighed 1,050 pounds, but they were both runabouts. The heaviest

car was the six-cylinder, which weighed 2,000 pounds. The present car

weighs 1,200 lbs.

 

The "Model T" had practically no features which were not contained in

some one or other of the previous models. Every detail had been fully

tested in practice. There was no guessing as to whether or not it would

be a successful model. It had to be. There was no way it could escape

being so, for it had not been made in a day. It contained all that I was

then able to put into a motor car plus the material, which for the first

time I was able to obtain. We put out "Model T" for the season

1908-1909.

 

The company was then five years old. The original factory space had been

.28 acre. We had employed an average of 311 people in the first year,

built 1,708 cars, and had one branch house. In 1908, the factory space

had increased to 2.65 acres and we owned the building. The average

number of employees had increased to 1,908. We built 6,181 cars and had

fourteen branch houses. It was a prosperous business.

 

During the season 1908-1909 we continued to make Models "R" and "S,"

four-cylinder runabouts and roadsters, the models that had previously

been so successful, and which sold at $700 and $750. But "Model T" swept

them right out. We sold 10,607 cars--a larger number than any

manufacturer had ever sold. The price for the touring car was $850. On

the same chassis we mounted a town car at $1,000, a roadster at $825, a

coupe at $950, and a landaulet at $950.

 

This season demonstrated conclusively to me that it was time to put the

new policy in force. The salesmen, before I had announced the policy,

were spurred by the great sales to think that even greater sales might

be had if only we had more models. It is strange how, just as soon as an

article becomes successful, somebody starts to think that it would be

more successful if only it were different. There is a tendency to keep

monkeying with styles and to spoil a good thing by changing it. The

salesmen were insistent on increasing the line. They listened to the 5

per cent., the special customers who could say what they wanted, and

forgot all about the 95 per cent. who just bought without making any

fuss. No business can improve unless it pays the closest possible

attention to complaints and suggestions. If there is any defect in

service then that must be instantly and rigorously investigated, but

when the suggestion is only as to style, one has to make sure whether it

is not merely a personal whim that is being voiced. Salesmen always want







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