South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-09-26
Ford Reveals
Principle Of.
Making Money
By ALLEN l.. BENSON.
stan Correspondent of the 1. y. :.
tCopyrirht, IS22. by the l. -. -

Copyright 1879. by the l. -. -
DETROIT. Sept 25-Henry Ford
is making more cars and more
profits this year than ever before.
Back OF these facts is perhaps the
most amazing money story that
ever was told which is set down
here as Ford told it TO me.
Ford's profits for the calendar
year 1921 were s76.OeO.OOO. Tais
was the high mark of his career up
10 that time. II was particularly
notable because. at the beginning Of
the year. Wall Street. believing him
10 be In financial difficulties. had
sent a banker 10 Ford 10 offer him a
big loan and 10 designate the mex.
secretary OF the Ford Motor Car Co.
During the latter part OF 1921 and
the early part OF 1922, Ford reduced
the prices OF his cars and tractors
sufficiently TO wipe out his $76,000,-
600 profits of 1921 and leave de-
felt OF SO, 900, 600. That is TO say.
IL the same number Of cars and
tractors were TO be made in 1922
that were made n 1921 and wages
and the prices OF raw materials were
10 remain the same. there would be
a deficit Of ten millions on the bus.-
ness OF 1922.
Having known all Of these fac.s
since the first or the year ! asked
Ford today how he was making out.
Profits Still Greater.
we are making more cars, more
| tractors and more profits than ever
| before" ne replied. Our avera se
profits last year were a little more
than $4,000. 900 a month. our ave-
rage monthly profits so far this year
have been considerably more than
shat. We are making 500 cars a
day. This is every car We can pcs
sibly turn out with our present ia
I ciities. It is more than we eTer
made before. yet It is about 200 csrl
a day less than our orders"
During the year had told many
business men throughout the cOun-
! try how Ford had apparently turned
last years $4,000, 600 profits into a
SIC, COO, 600 deficit by reducing the
prices OF his products. and as one
man they had declared that in an
other manufacturer. it would seem
an act OF insanity. This is how Fotd
! explained it 10 me-
FoFd's Panacea.
"In fixing the price of anythir Q
we manufacture" he said. 1--WE al
ways fix a price that is below cost
ut the time IL is made. The first
thing that happens Is that every.
body Is thereby put OH his tiptOes
The most important effect, however
j. the enormous broadening of tFC
market that follows. We arc driven
To capacity and more today because
we cut prices to less than what wa.
cost a year ago. But our prices are
no longer less than cost because We
have refined our methods of produc-
ton and are also able To buy on;
raw materials for less because We
can buy i'm even larger quantities. As
1 said, we have reduced costs sc
much by reducing selling prices that
we are making more cars and more
tractors-and more prOflts-than
ever before"
! asked Mr.. Ford If the same
principles could not be applied 10
any industry.
Basic Principle.
They not only could be applied, =
he replied. ''but they should be APP
piled. What the public wants Is
service, and low prices give the max
imIm of service by making 1t pos
Sible for the greatest number To buy
and use what is manufactured. Wbat
the manufacturer wants is profits
and a broad market. A small prof
ON each OF a large number of units
affords a greater profit at the end al
the year than a large profit on each
of small number OF units.
81 marvel that manufacturers car,