My Life and Work
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
to cater to whims instead of acquiring sufficient knowledge of their
product to be able to explain to the customer with the whim that what
they have will satisfy his every requirement--that is, of course,
provided what they have does satisfy these requirements.
Therefore in 1909 I announced one morning, without any previous warning,
that in the future we were going to build only one model, that the model
was going to be "Model T," and that the chassis would be exactly the
same for all cars, and I remarked:
"Any customer can have a car painted any colour that he wants so long as
it is black."
I cannot say that any one agreed with me. The selling people could not
of course see the advantages that a single model would bring about in
production. More than that, they did not particularly care. They thought
that our production was good enough as it was and there was a very
decided opinion that lowering the sales price would hurt sales, that the
people who wanted quality would be driven away and that there would be
none to replace them. There was very little conception of the motor
industry. A motor car was still regarded as something in the way of a
luxury. The manufacturers did a good deal to spread this idea. Some
clever persons invented the name "pleasure car" and the advertising
emphasized the pleasure features. The sales people had ground for their
objections and particularly when I made the following announcement:
"I will build a motor car for the great multitude. It will be large
enough for the family but small enough for the individual to run and
care for. It will be constructed of the best materials, by the best men
to be hired, after the simplest designs that modern engineering can
devise. But it will be so low in price that no man making a good salary
will be unable to own one--and enjoy with his family the blessing of
hours of pleasure in God's great open spaces."
This announcement was received not without pleasure. The general comment
was:
"If Ford does that he will be out of business in six months."
The impression was that a good car could not be built at a low price,
and that, anyhow, there was no use in building a low-priced car because
only wealthy people were in the market for cars. The 1908-1909 sales of
more than ten thousand cars had convinced me that we needed a new
factory. We already had a big modern factory--the Piquette Street plant.
It was as good as, perhaps a little better than, any automobile factory
in the country. But I did not see how it was going to care for the sales
and production that were inevitable. So I bought sixty acres at Highland
Park, which was then considered away out in the country from Detroit.
The amount of ground bought and the plans for a bigger factory than the
world has ever seen were opposed. The question was already being asked:
"How soon will Ford blow up?"
Nobody knows how many thousand times it has been asked since. It is
asked only because of the failure to grasp that a principle rather than
an individual is at work, and the principle is so simple that it seems
mysterious.
For 1909-1910, in order to pay for the new land and buildings, I
slightly raised the prices. This is perfectly justifiable and results in
a benefit, not an injury, to the purchaser. I did exactly the same thing
a few years ago--or rather, in that case I did not lower the price as is
my annual custom, in order to build the River Rouge plant. The extra
money might in each case have been had by borrowing, but then we should
have had a continuing charge upon the business and all subsequent cars
would have had to bear this charge. The price of all the models was
increased $100, with the exception of the roadster, which was increased
only $75 and of the landaulet and town car, which were increased $150
and $200 respectively. We sold 18,664 cars, and then for 1910-1911, with
the new facilities, I cut the touring car from $950 to $780 and we sold
34,528 cars. That is the beginning of the steady reduction in the price
of the cars in the face of ever-increasing cost of materials and
ever-higher wages.
Contrast the year 1908 with the year 1911. The factory space increased
from 2.65 to 32 acres. The average number of employees from 1,908 to
4,110, and the cars built from a little over six thousand to nearly
thirty-five thousand. You will note that men were not employed in
proportion to the output.
We were, almost overnight it seems, in great production. How did all
this come about?
Simply through the application of an inevitable principle. By the
application of intelligently directed power and machinery. In a little
dark shop on a side street an old man had laboured for years making axe
handles. Out of seasoned hickory he fashioned them, with the help of a
draw shave, a chisel, and a supply of sandpaper. Carefully was each
handle weighed and balanced. No two of them were alike. The curve must
exactly fit the hand and must conform to the grain of the wood. From
dawn until dark the old man laboured. His average product was eight
handles a week, for which he received a dollar and a half each. And
often some of these were unsaleable--because the balance was not true.
To-day you can buy a better axe handle, made by machinery, for a few
cents. And you need not worry about the balance. They are all alike--and
every one is perfect. Modern methods applied in a big way have not only
brought the cost of axe handles down to a fraction of their former
cost--but they have immensely improved the product.
It was the application of these same methods to the making of the Ford
car that at the very start lowered the price and heightened the quality.
We just developed an idea. The nucleus of a business may be an idea.
That is, an inventor or a thoughtful workman works out a new and better
way to serve some established human need; the idea commends itself, and
people want to avail themselves of it. In this way a single individual
may prove, through his idea or discovery, the nucleus of a business. But
the creation of the body and bulk of that business is shared by everyone
who has anything to do with it. No manufacturer can say: "I built this
business"--if he has required the help of thousands of men in building
it. It is a joint production. Everyone employed in it has contributed
something to it. By working and producing they make it possible for the
purchasing world to keep coming to that business for the type of service
it provides, and thus they help establish a custom, a trade, a habit
which supplies them with a livelihood. That is the way our company grew
and just how I shall start explaining in the next chapter.
In the meantime, the company had become world-wide. We had branches in
London and in Australia. We were shipping to every part of the world,
and in England particularly we were beginning to be as well known as in
America. The introduction of the car in England was somewhat difficult
on account of the failure of the American bicycle. Because the American
bicycle had not been suited to English uses it was taken for granted and
made a point of by the distributors that no American vehicle could
appeal to the British market. Two "Model A's" found their way to England
in 1903. The newspapers refused to notice them. The automobile agents
refused to take the slightest interest. It was rumoured that the
principal components of its manufacture were string and hoop wire and
that a buyer would be lucky if it held together for a fortnight! In the
first year about a dozen cars in all were used; the second was only a
little better. And I may say as to the reliability of that "Model A"
that most of them after nearly twenty years are still in some kind of
service in England.
In 1905 our agent entered a "Model C" in the Scottish Reliability
Trials. In those days reliability runs were more popular in England than
motor races. Perhaps there was no inkling that after all an automobile
was not merely a toy. The Scottish Trials was over eight hundred miles
of hilly, heavy roads. The Ford came through with only one involuntary
stop against it. That started the Ford sales in England. In that same
year Ford taxicabs were placed in London for the first time. In the next
several years the sales began to pick up. The cars went into every
endurance and reliability test and won every one of them. The Brighton
dealer had ten Fords driven over the South Downs for two days in a kind
of steeplechase and every one of them came through. As a result six
hundred cars were sold that year. In 1911 Henry Alexander drove a "Model
T" to the top of Ben Nevis, 4,600 feet. That year 14,060 cars were sold
in England, and it has never since been necessary to stage any kind of a
stunt. We eventually opened our own factory at Manchester; at first it
was purely an assembling plant. But as the years have gone by we have
progressively made more and more of the car.
CHAPTER V
GETTING INTO PRODUCTION
If a device would save in time just 10 per cent. or increase results 10
per cent., then its absence is always a 10 per cent. tax. If the time of
a person is worth fifty cents an hour, a 10 per cent. saving is worth
five cents an hour. If the owner of a skyscraper could increase his
income 10 per cent., he would willingly pay half the increase just to
know how. The reason why he owns a skyscraper is that science has proved
that certain materials, used in a given way, can save space and increase
rental incomes. A building thirty stories high needs no more ground
space than one five stories high. Getting along with the old-style
architecture costs the five-story man the income of twenty-five floors.
Save ten steps a day for each of twelve thousand employees and you will
have saved fifty miles of wasted motion and misspent energy.
Those are the principles on which the production of my plant was built
up. They all come practically as of course. In the beginning we tried to
get machinists. As the necessity for production increased it became
apparent not only that enough machinists were not to be had, but also
that skilled men were not necessary in production, and out of this grew
a principle that I later want to present in full.
It is self-evident that a majority of the people in the world are not