The Washington times., 1922-09-25
FORD GUT PRICE
BELOW costs
= BUT WINS OUT
Is Making More Cars. More
Tractors, and More Money
Than Ever.
BY ALLEN l.. BENSON,
Staff Correspondent Of the international


Copyright. 1922, by the International
News Service.)
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 1t to me.
Ford's profits for the calendar year
1921 were S76,O0O,O0O. This was the
high mark of his career up to that
time. 1t was particularly notable be.
cause, at the beginning Of the year,
Wall street. believing him to be In
financial difficulties, had sent a
banker to Ford to offer him a big
4oan and to designate the next Sec
retsry of the Ford Motor Company.
Price Cut Was Real.
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 $76,00O,'
900 profits of 1921 and leave deficit
of $10.000.000.
That is TO say, IL the same number
OF cars and tractors were to be made
in 1922 that were made In 1871 ana
wages and the prices of raw mate
rails We're to remain the same, there
would be a deficit Of $l0,OOO,O0O In
the business Of 1923.
Having known all these facts since
| the first OF the year, / asked Ford
today how he was making out.
I'VE are making more cars, more
tractors, and more profits" he re-
piled, than ever before. Our aver.
| age profits last year were a little
more than $4,000 900 a month. Our
average monthly profits so far this
wear have been considerably more
than that. We are making b,100 cars
| n day. This Is every car we can pos
sibly turn out with our present IA
cilities. II Is more than we ever
made before, yet II Is about 200 cars
a day less than our orders"
| During the year ! had told many
business men throughout the coun.
| try how Ford had apparently turn
ed last years $4,000, 900 profits into
a $40, ,0o0, 900 deficit by reducing the
prices OF his products. and as one
man declared that, in another man
ufacturer, 1t would seem an act Of
insanity. This is how Ford explain
ed IL to me:
I'm fixing the price Of anything
we manufacture" he said, I'VE al
ways fix a price that Is below cost
at the time II is made. The first
4 thing that happens IL that every
body Is thereby put on his tip toes.
THE most important effect, how
ever, Is the enormous broadening OF
the market that follows. We are
driven to capacity and more today
because we cut prices to less than
what was cost a year ago. But our
prices are no longer less than cost
because we have refined our methods
Of production and are also able TO
buy our raw materials for less, be.
cause we can buy in even larger
quantities.
Making More Than Ever.
AS / said, we have reduced costs
SO much by reducing selling prices
that we are making more cars and
more tractors-and more profits
than ever before"
asked Mr.. Ford II the same priu.
ciples could not be applied 10 any
industry.
"They not only could be applied"
he replied. but they should be
applied. What the public wants
is service, and low prices give the
maximum OF service by making II
possible for the greatest number
to buy and use what is manufac
tured. What the manufactured
wants is profits, and a broad mar
ket with a small profit on each
unit affords greater profit al
the end Of the year than a large
profit on each of a small number
Of units.
II marvel that manufacturers
cannot see this. Apparently they
don't. Their chief concern seems
to be to include in cost every pos
sible item and pile upon that the
greatest profit they believe can bt
collected. 1t is a fatal policy. Mary
q concern has been wrecked by pro
ceeding upon such lines"
Ford's cash balance Is now ur
around the 5000, 100000 mark
Money has lost all meaning &c
him except as an instrument with
which to carry out his plans. A
; while ago. his secretary called his
attention to a deposit OF $4,000, ,00t
in hank in Windsor. Ontario
that Ford had forgotten all about