Chapter 4 - 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.
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 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.