Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1916-10-02

pAdAl why o1lO AAOW oSNANOe'n
9Os are assemblers and only 10: manufac-
turers in the true sense of the term. This
means that consumers are paying 23G premium
to 90g of the automobile concerns in the coun-
try, over and above what they could buy the
same cars for, and in fact. much better cars,
from the large manufacturers.
Quantity Production Of Automobiles
Vague statements are frequently made con-
cerning the effect of quantity production in re-
ducing manufacturing costs. To 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.
(2) The wages Of the worsmen 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.
(3) Factory overhead expenses should be
included providing the manufacturing methods
are simple, direct and economical.
Factory overhead expenses include sup
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. we may say that factory
overhead expenses are legitimate part of the
actual car value received by the customer. and
if we admit this. these three items representing
manufacturing cost are all the actual car value
the customer receives. In making up the sell
ing price. however. other items are added, a.
follows:
"a Administrative, advertising and sell
ing and general expenses.
(5) Discount allowed automobile dealers
who sell the customer and give him service
afterwards.
(6) Manufacturer or assembler'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 one of these six items must and
does vary with production. Every small pro-
ducer, whether he is manufacturer or as
sembler, necessarily suffers an increase in every
one of these six items, and must therefore
charge more for his car than the large producer.
Illustrating this we will take the cars of a
manufacturer (A) producing $4,000 cars per
annum and either small manufacturer or tho
usual assembler (B) producing 10000 cars.
Commencing with item (), raw material. il
should be obvious that (A) can obtain much
lower prices than (B) for the same material.
because his buyirg power and purchases are
seven and half times greater.
In item (2), labor. it is obvious that (A) can
employ skilled mechanics in specialized single
operations to greater extent than (B). and
consequently obtain better work and moro
work from the same men.
In item (3), factory overhead expenses il
is obvious that (A). owning the highest priced
most modern labor-saving machinery. can elm
mate excessive labor and supervision; that ex-
penses of non productive departments. such as
experimental. engineering, laboratory. pur-
rs in 1914 to Is, 900 in 1915 and from, IS, 900 i
rice of the Six .Das S1575; in 1915, $l385 {
car .0as better than the preceding year. 7hes
bic only by the increase in production.
uced and sold more seuen-passenger SKIES an