Ford and Germany.
The process discovered by Henry Ford for reducing his factory costs to really absurd figures is apparently very singular. But only apparently, for if we think about it we shall see that it is the only feasible way.
The current practice in industry is to accept the cost price; that means, to add at a given moment to the price of the raw material the cost of making it up. It seems quite logical – it seems even rigorously scientific – but it is not. Ford demonstrated that that only is certain which besides being logical is psychological. And he demonstrated this with facts, the only kind of demonstration he brings to his aid.
His system is not to accept the cost from the factory but to impose a cost on the factory. A certain product, we’ll say, is turned out to-day for 100 dollars; this cost is already exceptionally low and permits the fixing of the selling price at the level of the purchasing power of an enormous public. This would suffice and has sufficed every manufacturer
