Automobile manufacturer

“ The American has a knack of turning out an article which is mechanically correct, has the wearing qualities, but is simpler in detail, and hence can be sold at a lower cost. Simplicity is the American manufacturer’s keynote.
Back of this is business organization system, standardization of parts used in the automobile, and that high order of constructive and executive talent that gives the American business man the distinctive reputation he enjoys and enables him successfully to compete in price and quality with the rest of the world. ”

“ And the chauffeur worked readily with the wealthy man, often advising the purchase of the foreign machine upon which Uncle Sam collected a very large duty. But the foreign made car had its stamp of distinction, perhaps much easier to utilize in the form of extravagant, even snobbish, style of life that the owner of the foreign car elected to affect, and the United States manufacturer of cars was not at all prepared to put out a car that would correct the desire of Americans to drive around in an imported article. ”

“ Ten years ago, the parts were all turned out in the ordinary forge and machine-shops; to-day there are six hundred manufacturers of parts and accessories, and their investment, including plants, is more than a billion dollars. They employ a quarter of a million people.
No one was more surprised at the growth of the automobile business than the parts-makers themselves. A leading Detroit manufacturer summed it up to me as follows:
"Ten years ago I was in the machine-shop business, making gas engines. Along came the demand for automobile parts. ”

“ Names of automobile manufacturers who are prominent today were familiar names in the earlier stages of the industry, and more of the original automobile makers have survived than have fallen by the wayside.
107
Removing Obstacles to Automobile Production.
One objection the old philosopher has to the automobile is an objection that is strengthened by the fact that he does not own one. It is that the automobile contributes toward making the age one in which a really short time appears to be and is generally regarded as a long time. It destroys proportions as it annihilates space. ”

“ But for the manufacturers’ quick recognition that the future of the automobile did not rest with the rich, that to be a great money-making industry, they must make automobiles for the mass and not for the class, the business would probably today be no further advanced than it was fifteen years ago. ”

“ But the biggest factor in the lead which the United States has taken in the production of automobiles, both for export and consumption within her own borders, is the universal method of standardizing in manufacture, adopted by the automobile producers of the nation.
The manufacturers of this country shine in the field of cost production, in the economies of purchase of raw materials, in the method of manufacture, and in marketing their product. ”

“ Bankers protested and entered complaint against the automobile as a degenerating factor in life. Automobile manufacturers expanded lavishly, over-capitalized, undertook to effect great stock-jobbing consolidations, until conservative financiers took steps to stop the harmful waste and inflation and many bubbles burst. ”

“ The volume of business is so large, and the interests concerned so wide, that the manufacturers have their own organization, called the Motor and Accessory Manufacturers. It includes one hundred and eighty makers, whose capitalization is three hundred millions, and whose investment is more than half a billion dollars.
There still remain to be discussed two phases of the automobile which have tremendous significance for the future of the industry—its commercial adaptability and its relation with the farmer and the farm. ”

“ Co-operation has136 been practiced intelligently, and the result has been that standardization favored economical manufacturing by creating a large demand, calling for quantities that fostered specialization in parts by manufacturers, with resulting low cost to the automobile maker. ”

“ Co-operation between the manufacturers produced standardization, and standardization enabled quantity production, and the low price which quantity consumption warranted has caused automobiles to be bought by millions, and the purchase of the automobile in millions, instead of thousands, has made the hundreds of millions of dividends which this wonderful mine of profits has yielded. ”

“ And in the early days of the automobile’s struggles for recognition as a promising investment, no banker or other moneyed man could be brought to believe that it held out any reasonable hopes of great gain. No one could foresee, not even the inventors of the automobile, that in less than two decades the business done through its comparative perfection would rank fourth in order of the industries of the United States. ”

“ The making and marketing of automobiles that would run had but fairly begun when their popularity became so manifest that even an average person could see that the automobile industry was bound to become great and profitable. ”

“ A satisfied customer, the best advertisement, finds expression in the loyal recommendation an owner gives his own make of car; enthusiasm of maker, of salesman, of owner—it runs along the line, and if advertising is the gasoline which makes the car go, enthusiasm is the oil which keeps the bearings of the industry lubricated.
The year 1898 saw the first real attempts of manufacturers in the United States, either of gasoline, electric or steam cars, to make them in any quantity. ”

“ This is one reason why the American car could invade England and her dominions beyond the seas, why Ford has factories in the British Isles and Canada, and why our yearly exports of automobiles have increased in the last five years over $100,000,000 in value. ”

“ This combination of knowledge by the men engaged in it has made the automobile industry a record breaker in point of the time consumed in its development. It has made it stand out as unparalleled by any other industry in this country in the speed with which it progressed from final experimentation to an established recognized enterprise, involving mammoth investment of capital and huge profits. ”

“ Immutable laws work in the automobile industry. The maker daily takes a course in the University of Production, because an army of selling factors constantly is attending to the absorption facilities of the country’s markets and he rarely permits himself the task of figuring on the “probable saturation point.” It is a wonderfully important thing to the maker that the national Organization gets official reports, guides the policies of standardization, holds an indefinable influence over the engineers30 of the industry, and sits as the congress of the Republic of Motor Car Production. ”

“ Although challenged in recent decades by strong foreign competition, the American automobile industry has made a dramatic comeback, improving quality and variety as it adjusts to the changing demands of the marketplace. ”

“ They were entrants that never toed the scratch. Their failure to make a start was due to lack of capital or inefficient organizers. A very large proportion of automobile companies that actually started in business have survived and are successful. ”

“ The keenest financial and commercial experts of the United States have learned to keep the motor car industry constantly under surveillance—not that they mistrust the manufacturers, but that they have found the industrial situation is so firmly linked to the dollars and cents program of the country’s economy that nothing may successfully act to deprecate the importance of the auto industry. ”

“ In the first place, European manufacturers of automobiles, as well as of other products generally, with the possible exception in a degree, of the Germans, are bound hand and foot, and therefore handicapped, by tradition and convention. They make the automobile, especially the French and English, so solidly, with such fidelity to tradition and with such conscientious care as to detail, elaboration and finish, that the price to the buyer, when it is put beside that80 of a similar American made product, will not meet competition. ”

“ Makers who could point to an annual production of, say 400 cars, took counsel among themselves, and some 50 increased their factory efficiency and financial responsibility that they can now point to an output of as many cars in one day as they made early in their manufacturing experience in one season. ”

“ It describes the various stages of the evolution of the idea of motive force other than animal power, in France, England, Germany and the United States, and its triumphant culmination in a successful horseless vehicle. And it makes clear how, when the automobile became of practical use, its successful commercialization became most profitable in the shortest period of time of that of any product of man’s ingenuity supplying an article to meet human wants. ”

“ Moreover, the automobile illustrates more completely than any other industry the technical qualities that so largely explain our industrial progress. Above all, American manufacturing has developed three characteristics. These are quantity production, standardization, and the use of labor-saving machinery. It is because Ford and other manufacturers adapted these principles to making the automobile that the American motor industry has reached such gigantic proportions. ”

“ It might be safe to assume that motor stocks in well managed companies making popular cars will be as secure an investment for reasonable earnings on products as other industrials for some years to come and possibly indefinitely. ”

“ There will come a time when the automobile industry will reach its height in production, but that time has not yet arrived, nor is it within calculable distance.
Statisticians show us that there are over 5,000,000 rich people in this country. Many of these have, and more of them will want, each several cars, each of a different type and for a different purpose. ”

“ This fact of the date of the first sale of a gasoline motor car fixes clearly that the use of automobiles in the United States practically increased from one car to over three million, in less than twenty years. ”

“ It began to be plain that certain features must be present in every first-class car. Hence came the standardization of the mechanism, which is a big step forward.
What is the result to-day? The automobile has become less of a designing proposition and more of a manufacturing proposition; less of an engineering problem and more of a factory problem. The whole, wide throbbing range of the business is bending to one great end—to meet a demand which, up to the present time, has exceeded the supply.
You have only to go to Detroit to see this pulsating drama of production in action. ”

“ Co-operation contributed to the general adoption by the motor industry of the automatic machining of parts. What that meant in economic production was the saving of millions in cost of construction, which in turn got the automobile down to the level of the common people’s price. ”

“ This is a fundamental principle in the science of investment.
When the saturation point is reached manufacturing automobiles will settle into an industry153 to supply a daily necessity. There will be keener competition, the price of cars will be lowered, and the profit on each will be correspondingly less. The industry will be similar to those of making hats, plows and shoes. It will carry a substantial profit, but not a spectacular one as now and for many years to come. ”

“ For automobile enterprises that took the wrong road and got mired in the mud of mechanical and management difficulties and financial complications were, most of them, lifted out of the slough by men who knew the right road and were better drivers. Had the automobile developed mechanically to near-perfection a score of years before it did, not only would the people as a mass not have been ready for it, but it is doubtful if business at that period had developed to the point of efficiency where it could recognize the possibilities latent in the motor car as a money-making machine. ”

“ And inasmuch as these underlying causes, while explaining the supremacy of this country to this date in the manufacture and sale of automobiles, also explain the reason for believing that the future of the automobile business will dwarf the proportions it has up to this time reached, they will bear analysis. ”

“ The automobile industry illustrates graphically that when an enterprise develops to the point where it is well grounded and has reached a period of age and steady earning capacity, it is not new investors who may come in and gather the richest plums, but the old ones, those who helped to give it its start, who stood by it when the future was obscure, and the ultimate outcome not certain. ”

“ The seventeen years in which the industry made its record, saw the rise and the fall of the steamer type of car, the wresting of an Old Man108 of the Sea, in the form of a discouraging patent holder from the shoulders of the manufacturers, the electric car largely depopularized and the gasoline car established in wellnigh universal favor. ”

“ The investor in the industry could scarcely be said to be using good judgment if he undertook to help to build a company to put out a car to compete with the Ford car, for illustration; that is, to put out a car at the same price and that he would expect the public to buy in preference to the Ford. ”