The Expanded and Annotated My Life and Work

TAKE PROFITS OUT OF WASTE, NOT 
EMPLOYEES OR CUSTOMERS
Management experts Tom Peters and Nancy Austin (1985, p. 59) cited an 
encounter with a John Deere sales manager who wore a tie pin with the 
acronym SOQNOP: Sell On Quality, Not On Price. Ford now makes it 
clear that the best approach is to sell on high quality at a low price, and this 
chapter has shown how and why this is achievable. Ford then concludes by 
stressing the scientific leg of his universal code: Put brains into the busi-
ness to reduce costs and thereby create more value for all stakeholders.
* * *
Now as to saturation. We are continually asked: “When will you get to the point 
of overproduction? When will there be more cars than people to use them?”
We believe it is possible some day to reach the point where all goods are 
produced so cheaply and in such quantities that overproduction will be 
a reality. But as far as we are concerned, we do not look forward to that 

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How Cheaply Can Things Be Made?  •  141
condition with fear—we look forward to it with great satisfaction. Nothing 
could be more splendid than a world in which everybody has all that he 
wants. Our fear is that this condition will be too long postponed. As to our 
own products, that condition is very far away. We do not know how many 
motor cars a family will desire to use of the particular kind that we make. 
We know that, as the price has come down, the farmer, who at first used one 
car (and it must be remembered that it is not so very long ago that the farm 
market for motor cars was absolutely unknown—the limit of sales was at that 
time fixed by all the wise statistical sharps at somewhere near the number 
of millionaires in the country) now often uses two, and also he buys a truck. 
Perhaps, instead of sending workmen out to scattered jobs in a single car, it 
will be cheaper to send each worker out in a car of his own. That is happen-
ing with salesmen. The public finds its own consumptive needs with unerring 
accuracy, and since we no longer make motor cars or tractors, but merely 
the parts which when assembled become motor cars and tractors, the facili-
ties as now provided would hardly be sufficient to provide replacements for 
ten million cars. And it would be quite the same with any business. We do 
not have to bother about overproduction for some years to come, provided 
the prices are right. It is the refusal of people to buy on account of price that 
really stimulates real business. Then if we want to do business we have to get 
the prices down without hurting the quality. Thus price reduction forces us 
to learn improved and less wasteful methods of production. One big part of 
the discovery of what is “normal” in industry depends on managerial genius 
discovering better ways of doing things. If a man reduces his selling price to a 
point where he is making no profit or incurring a loss, then he simply is forced 
to discover how to make as good an article by a better method—making his 
new method produce the profit, and not producing a profit out of reduced 
wages or increased prices to the public.
It is not good management to take profits out of the workers or the buy-
ers; make management produce the profits. Don’t cheapen the product; 
don’t cheapen the wage; don’t overcharge the public. Put brains into the 
method, and more brains, and still more brains—do things better than ever 
before; and by this means all parties to business are served and benefited.
And all of this can always be done.

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143
11
Money and Goods
This chapter reiterates Ford’s precept that money and finance can have 
seriously dysfunctional effects on any business. The sole legitimate pur-
pose of finance is to report the company’s income, assets, and liabilities 
as required by the Internal Revenue Service, Securities and Exchange 
Commission, and similar entities. It is very dangerous to use financial 
metrics for decision-making purposes.
The instance in which “the shop when called on raised a larger sum than 
any bank in this country could loan” may well relate to the material in 
Chapter 12, in which a cycle time reduction of one-third freed $20 million 
that had been tied up in inventory.