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
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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:
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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
38
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
39
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.
40
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
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