(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 we had made practicable was covered by an application of years before, although the applicant had kept his idea merely as an idea. He had done nothing to put it into practice.
The specific claims under the patent were divided into six groups and I think that not a single one of them was a really new idea even in 1879 when the application was filed. The Patent Office allowed a combination and issued a so-called "combination patent" deciding that the combination (a) of a carriage with its body machinery and steering wheel, with the (b) propelling mechanism clutch and gear, and finally (c) the engine, made a valid patent.
With all of that we were not concerned. I believed that my engine had nothing whatsoever in common with what Selden had in
mind. The powerful combination of manufacturers who called themselves the "licensed manufacturers" because they operated under licenses from the patentee, brought suit against us as soon as we began to be a factor in motor production. The suit dragged on. It was intended to scare us out of business. We took volumes of testimony, and the blow came on September 15, 1909, when Judge Hough rendered an opinion in the United States District Court finding against us. Immediately that Licensed Association began to advertise, warning prospective purchasers against our cars. They had done the same thing in 1903 at the start of the suit, when it was thought that we could be put out of business. I had implicit confidence that eventually we should win our suit. I simply knew that
we were right, but it was a considerable blow to get the first decision against us, for we believed that many buyers--even though no injunction was issued against us--would be frightened away from buying because of the threats of court action against individual owners. The idea was spread that if the suit finally went against me, every man who owned a Ford car would be prosecuted. Some of my more enthusiastic opponents, I understand, gave it out privately that there would be criminal as well as civil suits and that a man buying a Ford car might as well be buying a ticket to jail. We answered with an advertisement for which we took four pages in the principal newspapers all over the country. We set out our case--we set out our confidence in victory--and in conclusion said:
In conclusion we beg to state if there are any prospective automobile buyers who are at all intimidated by the claims made by our adversaries that we will give them, in addition to the protection of the Ford Motor Company with its some $6,000,000.00 of assets, an individual bond backed by a Company of more than $6,000,000.00 more of assets, so that each and every individual owner of a Ford car will be protected until at least $12,000,000.00 of assets have been wiped out by those who desire to control and monopolize this wonderful industry.
The bond is yours for the asking, so do not allow yourself to be sold inferior cars at extravagant prices because of any statement made by this "Divine" body.
N. B.--This fight is not being waged by the Ford Motor Company without the advice and counsel of the ablest patent attorneys of
the East and West.
We thought that the bond would give assurance to the buyers--that they needed confidence. They did not. We sold more than eighteen thousand cars--nearly double the output of the previous year--and I think about fifty buyers asked for bonds--perhaps it was less than that.
As a matter of fact, probably nothing so well advertised the Ford car and the Ford Motor Company as did this suit. It appeared that we were the under dog and we had the public's sympathy. The association had seventy million dollars--we at the beginning had not half that number of thousands. I never had a doubt as to the outcome, but nevertheless it was a sword hanging over our heads that we could as well do without. Prosecuting that suit was probably one of the most shortsighted acts that any group of American busi-
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ness men has ever combined to commit. Taken in all its sidelights, it forms the best possible example of joining unwittingly to kill a trade. I regard it as most fortunate for the automobile makers of the country that we eventually won, and the association ceased to be a serious factor in the business. By 1908, however, in spite of this suit, we had come to a point where it was possible to announce and put into fabrication the kind of car that I wanted to build.
CHAPTER IV
THE SECRET OF MANUFACTURING AND SERVING
Now I am not outlining the career of the Ford Motor Company for any personal reason. I am not saying: "Go thou and do likewise." What I am trying to emphasize is that the ordinary way of doing business is not the best way. I am coming to the point of my entire departure from the ordinary methods. From this point dates the extraordinary success of the company.
We had been fairly following the custom of the trade. Our automobile was less complex than any other. We had no outside money
in the concern. But aside from these two points we did not differ materially from the other automobile companies, excepting that we had been somewhat more successful and had rigidly pursued the policy of taking all cash discounts, putting our profits back into the business, and maintaining a large cash balance. We entered cars in all of the races. We advertised and we pushed our sales. Outside of the simplicity of the construction of the car, our main difference in design was that we made no provision for the purely "pleasure car." We were just as much a pleasure car as any other car on the market, but we gave no attention to purely luxury features. We would do special work for a buyer, and I suppose that we would have made a special car at a price. We were a prosperous company. We might easily have sat down and said: "Now we have arrived. Let us hold what we have got."