Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1916-10-01

9O% are assemblies and only l0S manufac-
turers In the true sense or the term. his
means that consumers paying 2oS premium
to 9O% of the automobile CONCERNS in the coun-
try, over and above what they could buy the
same for, and in fact much better cars.
from the large manufacturers.
Quantity Production OF Automobiles
Vague statements frequently made con-
corning the effect of quantity production in
ducing manufacturing costs. o illustrate this
truth to uniformed persons it is necessary to
state the elements that enter into costs and
selling prices of automobiles. Many people
will be astonished at the number Of these ele-
ments Primarily the basic cost of an auto
mobile is:
Cd The raw material contained in it.
CD The wages of the ~orlsmen who fashion
the material into finished car. The sum Of
these two items is the prime cost and the actual
car value the customer receives. All costs and
expenses beyond these are of little if any, value
to him.
90 Factory overhead expenses should be
included providing the manufacturing methods
simple, direct and economical.
plies. supervision and factory organization ex-
penses which, according to the intelligence Of
the personnel, determine whether the output
OF the manufacturer is large or small, whether
the proper material is purchased and at the
right prices, whether the design Of the car is
correct and the manufacturing methods simple
and effective Hence, may say that factory
overhead expenses legitimate part of the
actual Car value received by the customer, and
Clr,ottt hoe
manufacturing cost, all the actual car value
the customer receives. In making up the sell
ing price, however. other items are added as
follows:
Cd Administrative, advertising and sell
ing and general expenses.
60 Discount allowed automobile dealers
who sell the customer and give him service
afterwards.
CO. Manufacturer or asscmbler.s profit.
Quantity Production Distributes Expense
The total Of these six items comprises the
selling price 1t may be astonishing but it is
true that every Of these six items must and
does vary with production. Every small pro-
ducer, whether he is manufacturer or an as
sernbler, necessarily suffers an increase in every
one OF these six items, and must therefore
charge more for his car than the large producer
Illustrating tIllS, we VIII take the cars or a
manufacturer (A) producing $4,000 cars per
annum. and either small manufacturer or the
usual assembler OBJ producing 10000 cars
Commencing with item ~, raw material. it
should be obvious that (A) can obtain much
lower prices than OBJ for the same material,
because his buying power and purchases are
and a half times greater.
In item (2), labor. it is obvious that (A) can
employ skilled mechanics in specialized single
operations to greater extent than OBJ, and
consequently obtain better work and more
work from the same men.
In item (3), factory overhead expenses, it
is obvious that (A) owning the highest priced,
most modern abor-saving machinery, can elm
mate excessive labor and supervision; that es-
pcnscs OF non-productve departments, such as
experimental, engineering, laboratory pur-
rs in 1914 to $4,000 in 1915 and from, $4,000
rice of The Six was $l575; in 1915, $685. I
car Oas Better than the preceding year. The.
tote only by the increase in production.
l"ccd AID sold more seDen-passenger SKIES an
manufacturer in the roorld for a like period, TIL,
Of fine cars
rs - SO