ing him he ought to buy a new and different one. The plan which I then had in the back of my head but to which we were not then sufficiently advanced to give expression, was that, when a model was settled upon then every improvement on that model should be interchangeable with the old model, so that a car should never get out of date. It is my ambition to have every piece of machinery,or other non-consumable product that I turn out, so strong and so well made that no one ought ever to have to buy a second one. A
good machine of any kind ought to last as long as a good watch.
In the second year we scattered our energies among three models. We made a four-cylinder touring car, "Model B," which sold for two thousand dollars; "Model C," which was a slightly improved "Model A" and sold at fifty dollars more than the former price; and "Model F," a touring car which sold for a thousand dollars. That is, we scattered our energy and increased prices--and therefore we sold fewer cars than in the first year. The sales were 1,695 cars.
That "Model B"--the first four-cylinder car for general road use--had to be advertised. Winning a race or making a record was then the best kind of advertising. So I fixed up the "Arrow," the twin of the old "999"--in fact practically remade it--and a week before the New York Automobile show I drove it myself over a surveyed mile straightaway on the ice. I shall never forget that race. The
ice seemed smooth enough, so smooth that if I had called off the trial we should have secured an immense amount of the wrong kind of advertising, but instead of being smooth, that ice was seamed with fissures which I knew were going to mean trouble the moment I got up speed. But there was nothing to do but go through with the trial, and I let the old "Arrow" out. At every fissure the car leaped into the air. I never knew how it was coming down. When I wasn't in the air, I was skidding, but somehow I stayed top side up and on the course, making a record that went all over the world! That put "Model B" on the map--but not enough on to overcome the price advances. No stunt and no advertising will sell an article for any length of time. Business is not a game. The
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moral is coming.
Our little wooden shop had, with the business we were doing, become totally inadequate, and in 1906 we took out of our working capital sufficient funds to build a three-story plant at the corner of Piquette and Beaubien streets--which for the first time gave us real manufacturing facilities. We began to make and to assemble quite a number of the parts, although still we were principally an assembling shop. In 1905-1906 we made only two models--one the four-cylinder car at $2,000 and another touring car at $1,000, both being the models of the previous year--and our sales dropped to 1,599 cars.
Some said it was because we had not brought out new models. I thought it was because our cars were too expensive--they did not appeal to the 95 per cent. I changed the policy in the next year--having first acquired stock control. For 1906-1907 we entirely left off making touring cars and made three models of runabouts and roadsters, none of which differed materially from the other in manufacturing process or in component parts, but were somewhat different in appearance. The big thing was that the cheapest car sold for $600 and the most expensive for only $750, and right there came the complete demonstration of what price meant. We sold 8,423 cars--nearly five times as many as in our biggest previous year. Our banner week was that of May 15, 1908, when we
assembled 311 cars in six working days. It almost swamped our facilities. The foreman had a tallyboard on which he chalked up each car as it was finished and turned over to the testers. The tallyboard was hardly equal to the task. On one day in the following June we assembled an even one hundred cars.
In the next year we departed from the programme that had been so successful and I designed a big car--fifty horsepower, six cylinder--that would burn up the roads. We continued making our small cars, but the 1907 panic and the diversion to the more expensive model cut down the sales to 6,398 cars.
We had been through an experimenting period of five years. The cars were beginning to be sold in Europe. The business, as an automobile business then went, was considered extraordinarily prosperous. We had plenty of money. Since the first year we have practically always had plenty of money. We sold for cash, we did not borrow money, and we sold directly to the purchaser. We had no bad debts and we kept within ourselves on every move. I have always kept well within my resources. I have never found it necessary to strain them, because, inevitably, if you give attention to work and service, the resources will increase more rapidly than you can devise ways and means of disposing of them.
We were careful in the selection of our salesmen. At first there was great difficulty in getting good salesmen because the automobile trade was not supposed to be stable. It was supposed to be dealing in a luxury--in pleasure vehicles. We eventually appointed agents, selecting the very best men we could find, and then paying to them a salary larger than they could possibly earn in business for themselves. In the beginning we had not paid much in the way of salaries. We were feeling our way, but when we knew what our way was, we adopted the policy of paying the very highest reward for service and then insisting upon getting the highest service. Among the requirements for an agent we laid down the following:
(1) A progressive, up-to-date man keenly alive to the possibilities of business. (2) A suitable place of business clean and dignified in appearance.
(3) A stock of parts sufficient to make prompt replacements and keep in active service every Ford car in his territory. (4) An adequately equipped repair shop which has in it the right machinery for every necessary repair and adjustment. (5) Mechanics who are thoroughly familiar with the construction and operation of Ford cars.
(6) A comprehensive bookkeeping system and a follow-up sales system, so that it may be instantly apparent what is the financial status of the various departments of his business, the condition and size of his stock, the present owners of cars, and the future prospects.
(7) Absolute cleanliness throughout every department. There must be no unwashed windows, dusty furniture, dirty floors. (8) A suitable display sign.
(9) The adoption of policies which will ensure absolutely square dealing and the highest character of business ethics.
And this is the general instruction that was issued:
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A dealer or a salesman ought to have the name of every possible automobile buyer in his territory, including all those who have never given the matter a thought. He should then personally solicit by visitation if possible--by correspondence at the least--every man on that list and then making necessary memoranda, know the automobile situation as related to every resident so solicited. If your territory is too large to permit this, you have too much territory.
The way was not easy. We were harried by a big suit brought against the company to try to force us into line with an association of automobile manufacturers, who were operating under the false principle that there was only a limited market for automobiles and that a monopoly of that market was essential. This was the famous Selden Patent suit. At times the support of our defense severely strained our resources. Mr. Selden, who has but recently died, had little to do with the suit. It was the association which sought a monopoly under the patent. The situation was this:
George B. Selden, a patent attorney, filed an application as far back as 1879 for a patent the object of which was stated to be "The production of a safe, simple, and cheap road locomotive, light in weight, easy to control, possessed of sufficient power to overcome an ordinary inclination." This application was kept alive in the Patent Office, by methods which are perfectly legal, until 1895, when the patent was granted. In 1879, when the application was filed, the automobile was practically unknown to the general public, but by the time the patent was issued everybody was familiar with self-propelled vehicles, and most of the men, including myself, who had been for years working on motor propulsion, were surprised to learn that what
