The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-09-25
Henry Ford's Profits Are
Greater Than Ever.
Full Capacity of Present Facili-
ties Reached.
TURN OUT $500 CARS DAILY
Price Reduction Wiped Out
Profits of 1921!
Now Henry Has Bank Balance
of $500, 100000.
BY ALLAN L. BENSON.
fConvriohf 1900 nv T N 81

NCOpyElSnts 49, ny l. NJ 81
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
$76,000,000. This was the high mark
of his career up to that time 1t was
particularly notable because, at the
beginning of the year, Wall street, be-
leving him to be in financial diff
| culties. had sent a banker to Ford to
offer him a big loan and to designate
the next secretary of the Ford Motor
company.
the early part of 1929 Ford reduced
the prices of his cars and tractors suf-
| ficiently to wipe out his $76.000,000
profits of 1921 and leave a deficit of
$10.o00,o0o. That is to say, IL the
same 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 re-
main the same. there would be q
deficit of ten millions on the business
| of 1922.
Having known all of these facts
since the first year. 1 asked Ford to-
day how he was making out.
| I'VE are making more cars. more
| uaclors ana more pro1lts, ne repneoS
than ever before.
| Over 5000 Daily.
"Our average profits last year were
a little more than $6.000,00O a month.
! Our average monthly profits so far
this year have been considerably more
than that. We are making 800 cars
day. This is every car we can pos
sibly turn out with our present ia
cilities, it is more than we ever made
before, yet it is about 200 cars "a day
less than our orders"
During the year L had told many
business men thruout the country how
Ford had apparently turned last years
S76.000,000 profits into a $40, ,000, ,0OOf
4 deficit by reducing the prices of his
products, and as one man.. they had
declared that in another manufac-
turer, it would seem an act of insanity.
This is how Ford explained it to me:
Price Below Cost.
THAT in fixing the price of any
thing we manufacture" he said, I'VE
always fix a price that is below cost
at the time it is made. The first thing
that happens is that everybody is
1 thereby put on his tip toes. The most
important 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 what was cost year ago.
But our prices are no longer less than
meth hods of production and are also
able to buy our raw materials for less
because we can buy in even larger
quantities. AS 1 said, we have reduced
costs SO much by reducing selling
prices that we are making more cars
tand more trdcfors-and more profits
than ever before"
asked Mr.. Ford If the same prin-
ciples could not be Applied to any in
: dustry.
Public Wants Service.
They not only could be applied"
he replied. but they should be ap-
piled. What the public wants is serv-
ice, and low prices give the maximum
service by making it possible for the
greatest number to buy and use what
is manufactured. What the manufac-
turer should want is a broad sale with
fords a greater profit at the end OF
the year than large profit on each
of small number of units.
Il marvel that manufacturers cam
mot see this. Apparently, they do not.
Their chief concern seems TO be in
J cluded in cost every possible item and
pile upon that the greatest profit they
believe can be collected. 1t is q. fatal
=. policy. Many a concern has been
; wrecked by proceeding upon such
lines
: Ford's cash balance is now up
around the 5000. 200, 900 mark. Money
las lost all meaning to him except as
an instrument with which to carry out
his plans. A while ago his secretary
called his attention to a deposit of s2,-
100000 in a bank at Windsor. Ont.
/ that Ford had forgotten all about.