The Big Stone Gap post. [volume] (Big Stone Gap, Wise County, Va.) 1892-1928, 1922-10-04
FORD EXPLAINS
BUSINESS PLANS

NhAOthf oCPt- SO-AACHtS
is making more cars and more prof
its this year than ever before. Back
of these facts is the most amazing
money story that ever was told.
Ford's profits for the calendar
year 1921 were s76.OOO,O0O. This
was the high mark of his career up
to that time. 1t is particularly not
able, because Mt the beginning of the
year Wall Street, believing hime 90
be in financial difficulties had sent
banker to Ford to offer him big
loan, and to designate the next sec.
rotary of the Ford Motor Company.
During the latter part of 1921
and the earlier part of 1929 Ford
reduced the prices of his cars and
tractors sufficiently to wipe out his
SIC, 100000 profits of 1921 and
leave n deficit of $iO,OOO.O0O. That
is to say if the number of cars and
tractors were TO be made in 1922
that were made in 1921 and wages
and the prices Of raw materials were
to remain the same. there would be
u deficit of $4,000, 900 in the bus.
mess of 1922.
Asked about present conditions,
Milford said:' we are making more
cars, more tractors and more profits
than ever before. Our average prof
its last year were little more than
S6,000,000 n month. Our average
profits this year have been consider
ably more than that. We nre max
ing 800 ears n day. This is every
ear we can possibly turn out with
our present facilities; it is more
than we ever made before, yet it is
about 200 cars a day less than our
orders.
Ford explained his apparently in
sane act of changing n SIC, O00, 900
profit to Si0,OOO,000 deficit by the
reduction of the price of his prod
ucts saying:
"ln fixing the price of anything
we manufacture. we always fix
price that is below cost at the time
IT is made. The first thing that Imp
pens is that everybody is thereby
put on his tiptoes. The most i'm
portant effect, however, is the enor-
nous broadening of the market that
follows. We are driven to capacity
and more today because we cut
prices to less than was cost year
ago. But our prices are no longer
less than cost, because we have re-
fined our methods of production and
are also able to buy our raw mate
rial for less, because we can buy in
even larger quantities. As said,
we have reduced costs so much by
reducing selling prices that we are
making more cars and more trac.
tors-nnd more profts-than ever
before.
Mr.. Ford was asked il the same
principle could not be applied to any
industry.
They could not only be applied"
he answered, but they should he an
piled. What the public wants is SER
vice, making it possible for the
greatest number to buy and use
what is being manufactured. What
the manufactures wants is profits,
and broad market. with small
profit on each unit aifording great
er profit at the end OF the year than
a large profit ON each OF small
number of units.
Il marvel that manufacturers
cannot see this. Apparently they
don't. Their chief concern seems to
be to include in cost every possible
item and pile upon that the greatest
profit they believe can be collected.
Many concern has been wrecked
by proceeding upon such lines"
Ford's cash balance is now up
around the s2Oo.OO0.OOO mark.
Money has lost all meaning to him
excep, us q means with which 20
carry out his plans. A while ago
his secretay called his attention to
deposit of 100000 in bank at
Windsor that Ford had forgotten all
about.