A BUSINESS NAPOLEON

Evening Star, Issue 18050, 18 August 1922, Page 6

A BUSINESS NAPOLEON

HESl'.r FORD'S METHODS. STARTED WTTH NOTHING. The remarkable business methods of Henry Ford, of motor car fame, are well set out in an interview which he gave to Samuel Crowther, and which was published in ‘ ’System: the Magazine o.f Business.’ It is a very' stimulating piece of reading. Worth nothing in 1903, Mr Ford is now probably worth £200,000,000, and to-dlay ho declares that service to the public and not his own private profit is his goal. “There is,” says Mr Ford, “a wholly sincere belief that what our company has done could not bo done by any other concern ; that we have been touched by a wand; that neither. we nor any one else could make shoes, or hats, or sewing machines, or watches, or typewriters, or any other necessity after the manner in which wo make motor cars and tractors, and that if only we ventured into other fields we should quickly discover our errors.

“1 do not agree with any of this. Nothing has come to us from out of the air. We have nothing that others might not have. We have had no good fortune except that which always attends anyone who puts his best into Ms work. There was nothing that could be called * favorable ’ in our beginning. We started with almost nothing. . What we have we earned, and we earned it by unremitting labor and faith in a principle. We took what was a luxury andl turned it into a necessity, and without any sort of trick or subterfuge. “ When this year wo cut down the price of cars we cut them below our cost figures of production, and for about a month we sold at a lass. But, of (lourse, we caught up on our own price. We found ways and means of cutting expenses that made the losing price a very profitable one. THE GENIUS OF MANAGEMENT.

“During the, war wo had considerably lessened our efficiency, unconsciously, of course. We had 1 acquired certain luxuries, although wo had never thought of them as luxuries. Wo employed fifteen men per car per day. Now we are employing nine per car per day. We made that cut by applying the rule that everything and everybody must produce or get out. “We abolished every order form and all statistical records that did not directly aid in the production of a oar. “We took out 60 per cent, of our telephone extensions. Only a comparatively few men in any organisation need, telephones. Wo formerly had a foreman for every ten men; now we have a foreman for every seventeen men. The other foremen aro working. “ We cut the overhead charge from £29 a car to £l9 a can, and when you realise what this means on more than 4,000 cars a day you will have an idea how, not by economy, not by wage-cutting, but by tho elimination of waste, it is possible to make an ‘ impossible ’ price. The saving of only a shilling a car mounts up in a year. SERVICE TO THE PUBLIC. “ It is the degree of the comfort of the public—not the size of the manufacturer’s bank balance—that evidences prosperity. The function of tho manufacturer is to contribute to this comfort. He is an instrument of society, and he can serve society only as he manages his enterprises to cause them to hand over to the public an increasingly better product at an everdecreasing price, and at the same time to pay all those who have a hand in his business an ever-increasing wage based upon tho work they do. 11 1 conceive of business generally as a problem of performing tho largest service with the least expense, which means the cutting out of all waste, “Tho standardisation that effects largo economies for the consumer results in profits of such gross magnitude to the producer that he can scarcely know what to do with his money. But his effort must be sincere, painstaking, and fearless. LASTING FOR. EVER.

“ I have been told that it is clever business, that the object of business ought to be to get people to buy frequently, and that it is bad business to try to make anything that will last for ever, because then onoo a man has bought lie will not buy again. ■ ' > “My principle of business is precisely the opposite. It does not please me to have a buyer’s car wear out or become obsolete. I want tho man who buys one of my cars never to have to buy another. “ We never make an improvement that renders any previous model obsolete. The parts of a specific model are not only interchangeable with all other parts of cars of that model, but they are interchangeable with similar parts on all cars we have turned out. You can take a car of ten years ago and, buying to-day’s parts, make it, with very little expense, into a car of to-dav.

“But how about saturating the market? I have always believed that it is impossible to saturate a market, except by putting the price of what one sells above the price the public will pay. Coming out of what has been called “ depression ” conclusively demonstrated this fact to me. Wo had to raise our prices during the war period because of the increase in the price of materials and of carrying on business in general. “Our sales eventually fell off as all other sales fell off. We had a large stock, and, taking the materials and parte at their cost, we could not afford to cut our price. But that was a price wlf.ch, on tho turn of business, was higher than people could or wanted to pay. We closed down to pet our bearings. Wo were faced with making a cut of £5,5C0,C00 ou the stock, or taking a much larger loss than that by doing no business. So there was no choice at all.

“ That is always the choice that a man in business has. He can take the direct loss on his books and go ahead and do business, or he can stop doing business and take the loss of idleness. The loss of not doing business is commonly greater than the actual money involved, lor during the period of idleness fear will consume initiative, and if the business is closed down long enough there will be no energy Jell with which to start again. There is ns use waiting for business to- improve.