The Expanded and Annotated My Life and Work

WORK FOR CONTINUOUS COST REDUCTION
The next statement, “a principle rather than an individual is at work,” 
relates back to Ford’s “universal code” and reinforces the proposition that 
any business can make it work equally well. The subsequent paragraph 
shows that Ford was able to reduce prices continuously despite higher raw 
material costs and higher wages. This is particularly telling because Ford’s 
goal was to raise wages continuously, but materials are a genuine direct cost 
that no improvement in labor efficiency can remove from the product cost.
Ford’s removal of material waste is consistent with the ISO 14001 envi-
ronmental standard, and, may exceed its requirements. A manufacturer 
can meet ISO 14001’s provisions through the identification and mitigation 
of environmental aspects, i.e., wastes whose discharge is subject to regula-
tion by environmental protection laws, but plenty of material waste does 
not fall into this category. Ford’s position was that no material waste of 
any kind should occur, and implementation of this policy may have offset 
the material costs in question.
* * *
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.