New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-23
Ford Tells of
Beating W all
ST. Over Loan

CONTINUED from page oBe)
100000 worth of stock into cash~-put
that down.
'Then we looked over our foreign
accounts and found our agents at for
eign ports owed us $1,000 900, which
we collected. We had also sold by
products for which we had accounts
receivable of S3,700,000 more, which we
got in--put down those two items. On
top of that we sold $7,90o,O00 worth Of
Liberty bonds. If you total these
you'll find they come to $4,000 600
more than enough to meet our impend
| ing obligations. But we did not stop
there.
Cut Out War Extravagances
"The war had led US into many ex-
travagances of administration and ac-
counting. We went through the plant,
Offices and shops, and made economies
which I'll detail later, eliminating
everything non productive. Then we
had acquired the Detroit, Toledo &
lrontor Railroad. We saw poss Utilities
of reducing the vast amount of capital
which we had formerly kept tied up,
invested In goods in transit. We found
ways to cut the time our goods were in
transit BY that one move we released
PGCVNC,OUO, LoOh II from IuuQS lHVCSLCQ
in stock in transit and put it to other
uses. Thus, when April / came round
We had $87, 100000 to meet $4,000 900
in Obligations. We paid them all, weeks
in advance"
NJ. Ford leaned back in his chair
and laughed.
"And all the WHILE" he went on.
"these New York bankers we're fussing
around here, trying to get US to take a
loan"
"But how could you create such i'm
mense sums of ready cash by mere
economies?" he war asked
Mere economies" Mr.. Ford replied,
with emphasis on the mere"
There's nothing mere about our
economies-they're the thing" he cor
tinued. "rake that item of $28, 900 900,
released from investment in goods in
transit. We were able to do that by
combination of two things. BY using
our railroad, we were able to speed
up movement of raw materials to the
factory ard movement of finished cars
from the factory to the dealers. Bet
ter methods in the factory cut the
time needed to manufacture the mate
rial into machines. Then we stopped
carrying immense reserve supplies OF
raw materials. The first economy made
VIC oCSOHO PCoolUAS. AlSI luC way ~
turned out:
S8S,000,000 Always Tied Up
Before we got control of the D., 7.
Il |. il required an average of twenty
two days to haul raw material 20 the
factories, make it into cars and get
them to the dealers. We had to buy
three weeks in advance Of need and
with no way of knowing future condi-
tons, we had to keep immense re serves
on hand. The money tied up in these
and the goods moving stood continu-
ously at about S88,000,000.
"But the early months of 1921
brought great changes. General cessa-
cars in which to carry them, plenti-
full Then the D., T. & I. is really one
great terminal. 1t crosses every trans
; continental line in the country. When
stock consigned to us reaches the D., 7.
& |. it can be speeded along to desti-
nation. Parts, or cars, outbound, can
be made into through trains and thus
the running time to destination be
greatly reduced. In the Offices of the
D. T. & l., the officials did away with
deal of Anticipated railroad red tape
were abolished. The Offices themselves
were brought to Detroit and the road
is operated as a single unit. All these
elements, combined, have reduced the
time of our movement of stock from
the suppliers of raw materials through
the factory and the cars into the hands
of the dealers from twenty-five to
fourteen days. And that is not the
end-we1l cut it still more Where,
before we had $88,O00,O00 tied in min
ing and reserve stock required to
a
handle the stock required to make
114,210 cars a month for less than
$50, 100000.
Stock Ordered Economically
There are S,3oo parts to the Ford
car. Once each month we make
schedule Of the exact number of cars
we will make the next month. Then
we figure out the exact amount of
stock needed to make just the number
of parts to fill that schedule and buy
that amount of stock and no more
Were following my fathers advice
and not loading up with things we
don't need.
"Office and shops also come in for
a house-cleaning. We literally took
out a train load of desks and furniture
and sold them. We told the men that
occupied these desks that back in the
shops were plenty OF gOod JOBS at
good pay-if they wanted them. Most
of them did. We cut the Office forces
from 1,074 to 528 persons. Telephone
extensions were cut about 60 per cent.
"We went through the shops in the
same way. During the war we had 8
foreman for about every three to five
men. Too many foreman sat at desks
all day looking on. We have sold all
the desks and most of former foremen
are now at machines. We now have
foreman to about every twenty men.
Everything and everybody that was
not producing was put in a position
where they would or were eliminated.'
"a comparison of our operating
costs before and after the house clean
ing is really startling lesson in what
manufacturers can do if they look
sharp to economy. Back in November,
1920, before the house cleaning, our
daily expense for labor and commercial
overhead charges, cost of materials
not included, averaged $463,200 to get
out an average of 3,146 cars day or
SAG car. Look what we did in June,
N M