The Caledonian-record. [volume] (St. Johnsbury, Vt.) 1920-current, 1922-04-22
HENRY FORD
TELLS SECRET
OF SUCCESS

| Wlln the alu Oh odiIutl 1ioWtnci,
he tells for the first time, in a
complete and connected way, his
business philosophy.
Inasmuch as Ford has contri-
buted about the only real idea
brought into the world of business
in the last half century, what he
has to say is not only interesting,
but important. One Of the veal
thiest merchants in the United
States, man who ought to know
something about business, having
been in it all his life, told me last
week that he regarded this article
of Ford's as the most important
contribution to the philosophy of
industry that had been made dur
ing his lifetime.
What is the big idea which I'M
derles Ford's success? In his own
view, it is control by the custo-
1 mer.
1 The Ford car has never been
sold at a price based on the cost
of production, he says. He has
always figured out what price the
customer would pay and then
has made the best car he could to
sell for that amount.
Works Back From Price
ave have always taken the
price,, says Mr. Ford, "and
worked back. Every price has
been a challenge to ourselves. 1t
has always been below the lowest
cost we could figure out in
advance. Then we have gone
ahead with that price hanging
over us and found so many new,
better and less expensive ways Of
| doing business that the price
which once, under the ordinary
method of calculation, would
have been considered impossible,
became very profitable.
"When this year we cut the
/ price of cars we cut them below
our cost figures of production,
and for about a month we sold
at a loss. But, of course we
caught up on our own price. We
found ways and means of cutting
expenses that made the losing
price a very profitable one. I am
quite certain, that, if instead of
estimating what the customer
would pay and pricing accordingly
we had taken our costs and found
the lowest price we could sell at,
our business would today be dull
instead of being better and more
profitable than it has ever BEEN.
Using the Axe on Costs
In getting down to that new
price Mr.. Ford had to cut to the
bone. In the first place, he took
a loss of s17,000,000 on the value
of materials on hand, the price of
which had fallen since he bought
them.
The number of men employed
was reduced from Is per car Dcr
day to nine per car per day. eve
| made that cut, Mr. Ford says
"by applying the rule that every
body must produce or get out.
The office force was cut In two.
most of the discharged men going
into the shops at higher wages.
Every order blank and every
form of statistics that did not di-
rcctly aid in the production of a
car was abolished. 1--WE had been
collecting tons Of statistics be-
cause they were interesting, is
Mr.. Ford's comment. "But statis-
tics will not construct automobiles
so out they went"
Sixty per cent of the telephone
II ..a.1Naxyn1 In II
of having foreman for every ten
men the plant now has one for
every seventeen. "The other fore
men are working.
Saving $50 Car
AS a result of these economics
| the overhead charge was reduced
from STAG a car to 1913 car.
"When you realize what this
means on more than 1000 cars a
day." says Mr.. Ford, you will
have an idea how, not by economy
not by wage cutting, but by the
elimination of waste, it is possible
to make an impossible price. The
saving of only a dollar car
mounts up to big sum of money
in a year
This thought that the consumer
must dictate the price and manu-
facturers must somehow reach
that price runs through all Mr.
Ford's thinking on the subject
Far too much attention, he saws,
is paid to standardization. The
usual process for a manufacturer
who is making, let us say, II
articles is to reduce his line to
only three, and by standardizing
the processes of manufacture turn
the amount at greatly reduced cost
He is then tempted to maintain
prices where they were and get
an increased margin of profit.
Prosperity Through Service
But if he does so, Mr.. Ford
says before long ne will find HIM
self doing a poor business on three
articles instead of a poor business
on II. The only excuse which eX-
lists for high prices is wide va
riety of styles and models to Sc
lect from. When you concentrate
on few models you must come
down to reasonable price, and
if you don't the public will pass
you by.
"a business can be continually
prosperous only as it serves, is
Mr.. Ford's doctrine. l have heard
many business men say the same
thing, and it didn't mean any
thing. The difference with Mr..
Ford is that he really believes it.
He summarizes his business creed
in the following four points:
The Ford Greed
1. An absence of unreasoning
fear of the future or generation of
the past. One who fears the fu-