The Carlisle independent., 1920-11-25
FORD MAKES FORTY BY LOSING
 TWENTY
Plant Executives Outline Fiscal Re lation of Sales and Service, Sales At Loss Create Profitable Ser vice Business-See New Car
 Still Dist ant

E Henry Ford has found a way to strike a profitable balance. His re- cent readjustment of prices on the Ford line is shown to have entailed him loss of $20 net on each machine that the Ford Motor Go. is now pro- ducing, but his service department production is based on requirement of $40 for replacement parts from each Ford car now running. Further, there has been and will be no reduc- tion in the price of replacement parts. Thus in stimulating the loss on the first sales, he enlarges the market for later profits. These facts were made plain in statements by Ford executives before a gathering of Ford dealers from the Carolinas and Vir- ginia, gathered last week at Charlotte, N. C., and indicative of methods by which the Ford company is acquaint- ing it's trade of the impetus to busi- ness which the recent price-cut was destined to furnish
 That each car now being turned out is sold at loss of $20 to the Ford company was proclaimed by w. A. Ryan, who, as manager of sales for the company, naturally was one of the leading speakers on the program The company is now producing 4,000 cars daily, said Ryan, leaving it to his auditors to figure out that this means loss of $80,000 daily. Much of his message concerned some exceedingly timely advice to dealers about the value of being careful in the way that they handle used cars, particularly since the slump in used car values that has been induced by lower prices on some new cars.
 But it was from E. P. Hobart, ser vice manager of the Ford organiza- tion, that the trade learned of the sil- yer lining to the Ford cloud Hobart told his audience that Ford is making S165. 100000 worth of parts every year for distribution through that end of the business. This, he said, was based on an average figure of $40 per car, thereby establishing the rate at which it is figured Ford cars are expected to wear out every year. h. cidentally, some of the more statis- tical in the trade lost little time in figuring from the amounts given that 4,125,000 Ford cars now in commits sion must be the basis for the reck- oning.
 There vii be no reduction in the price of parts, Hobart said. h. creased freight rates and increased costs of production makes this impos- sible, unless, as in the case of the complete ehicle, Ford is prepared to stand a definite ratio of loss on each part By producing it's replacement parts in the regular line of manufae- ture, Hobart reminded the dealers the 1 company already is able to keep it's costs low and .hey get the benefit ot this. The present lowered price on the Ford car, even with it's attendant loss, Hobart explained, was decided as preferable to the greater loss that would have followed curtailed rate of production.
 Of the new car, concerning which the trade has heard but vaguely, 'Ho bart added little of information be- yond the limit of trade surmise. The l new car will not be offered, Hobart | explained, until sale shall be found l for it's production. Automobile Topics, October 30. 192OE