World Yet to Learn the Lesson of Economy.
Will the world as a whole ever learn thoroughly the lesson of what the saving of time means in its equivalent of money? Full realization of this is practically confined in this day and generation to some manufacturers, and to most efficiency experts. But the great mass does not acutely see it.
The farmer knows that if he takes four hours to go to town when it is not necessary, he has lost the money represented by four hours’ work. That is plain to him, but it does not strike him that taking four hours to haul a load of grain to town by horses when it would take only one hour to do it by motor truck is throwing money away, and is an economic waste only in another form. Nor does he quickly see that a motor truck will perform service more economically than the horse, including cheaper cost of maintenance.
He also appears unable to get the same viewpoint on the economic loss by bad roads, that he does of wasting four hours to go needlessly to town.
The farmer has long had demonstration of the economic superiority of the mechanical reaper over the hand cradle, that of the mechanical thresher over the flail, and that of the drill over sowing by hand. But he is slow to see that the motor truck is superior to the horse and a factor in greater economy as the reaper, the thresher and the drill were superior to man, while at the same time his liberator from the hardest types of labor, and an economic saving to boot.
When all farmers learn the full facts of the superiority of motor mechanism over horses, only one instance of which is that their cost per mile haulage is 162⁄3 cents, against 307⁄10 cents for the horse, a wider use will result. It is only the highly developed efficiency expert who yet can count a minute of time in its equivalent of cents, and an hour in its equivalent of dollars. The automobile industry has had the benefit of the highest quality of efficiency generalship.
Chalmers was making $70,000 a year with the National Cash Register Company when an automobile company secured him by promising more. Flanders was offered by Ford, in addition to his salary, a bonus of $20,000 if, in the first year of his administration, he would turn out 10,000 cars. By installing the first automatic machine tool system, which itself was mechanical co-operation, Flanders collected the bonus.
No industry, except perhaps oil or steel, has paid men such salaries, bonuses and commissions as has that of the automobile.
Co-operation by the automobile industry has been pursued in its public shows for seventeen years—the period of the industry’s greatest strides—beginning with the first one in 1900 in Madison Square Garden, New York. The Seventeenth annual auto show was that in New York and Chicago in January, 1917.
There are many lines of industrial production in which to this day the factors have not gotten together in co-operation, lines in which each producer is working alone, and it is noticeable in many of them that development is slow and advancement tardy.
The automobile makers early applied the principle of co-operation by formal association. They organized the National Association of Automobile Manufacturers to advertise automobiles at the first auto show in New York, and to “encourage general practices of mutual benefit,” a statement of principles that is brief but sweeping.
Stimulating influences in the formation of this, one of the earliest, and one of the most comprehensive and sincere co-operative industrial associations, were the necessity for presenting a united front, which legislation adverse to the automobile created, and of popularizing and inspiring confidence in an innovation. Co-operation was further made imperative by the necessity for better roads. Had the roads of the United States been better than they were when the automobile first came into being, the industry might by now be able to write its annual production in larger figures than 1,600,000 cars made in 1916.
That the automobile associations have the true principle of co-operation and not the semi-true or false variety, is evidenced by the fact that their co-operative efforts have been from the start for the benefit of the industry as a whole and not for the benefit of members of the associations alone. They have always admitted to their councils all manufacturers, whether association members or not, and co-operated on a free and full basis.
Broad liberalism has been practiced. The many young men engaged in the industry have been credited with this. Coming into the business arena at a late date, they were not handicapped by prejudices and hardening of the arteries of open-minded thought. They believed in the principle of “one for all, and all for one,” which is the keynote of co-operation.
As the world has these men to thank for the constantly enlarging pleasures and comforts of the automobile, so it has them to thank for such good roads as there are, for it is as certain that automobiles have improved roads as it is that automobiles exist.
The organization of the National Association of Automobile Manufacturers was followed by that of the co-operative Association of Licensed Automobile Owners, organized to resist the tightening of the clasp of the licensor of the Selden patent rights, and by the Society of Automobile Engineers, and still later by the American Motor Car Manufacturers Association. The Automobile Board of Trade followed, and today the trade association is the National Automobile Chamber of Commerce. Fostering trade, reforming abuses and promoting harmony, were steadily the aims of all the organizations, and how well they have done it is attested by the fact that no association of producers has better demonstrated and more completely justified the valuable principle of true co-operation.
Standardization in the automobile business has never discouraged individuality of the manufacturers in the essentials of form or speed. It was confined to those directions where appearance was not important. It never extended to bodies, stream lines or designs that would deprive a manufacturer of distinctions and selling points.
It is standardization of detail—uniformity of screws, locks, washers, spring and bearing parts, water connections, etc. Co-operation has 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. It also left him free to center his efforts, energy and capital on production in quantity, and himself get down the price of the finished automobile.
To the thinker, one of the most interesting features of the automobile industry is this example it has given to the world of efficiency and co-operation. We are not surprised at efficiency in the steel business or the oil business, because they are industries conducted practically by one man power; and if autocratic rule is not efficient, its last excuse for being might appear to have ceased to exist; but to find several hundred different manufacturers with divergent ambitions, ideals and interests benevolently engaged in co-operative competition, justifies, it would seem, that optimism which sees the world as growing better.
Certainly if “by their works ye shall know them,” the progress made by the automobile industry in the short space of time it has played the star part on the industrial stage, has been the most splendid demonstration of the value in commercial industrialism of the tolerant, broad minded type of co-operation, coupled with efficiency. It is an example of the value of harmonious co-ordination of the differing efforts of man in advancing the material progress of the world, and in the case of the automobile industry, the best assurance of its continued advance as the moving force in the production of one of the greatest and most beneficial forms, not alone of transportation, but of mind culture, of healthful relaxation and of sane recreation.
CHAPTER IV.
AUTOMOBILE INDUSTRY AS AN INVESTMENT.
A dozen years ago dictionary publishers vied with one another to be the first to announce that new editions of their wordbooks contained the word “automobile.”
Today the automobile industry is the fourth in magnitude—only three others that are larger.
Is your imagination equal to the task of forming a vivid picture of the tremendous activity that has been maintained to produce such results in so short a time?
Do you know of any other industry in which money could have been at work in as great a creative capacity? We will not say in a capacity to produce immediate profits, because so far the automobile industry has been largely in the building, in the creative state.
In 1899 we produced 3,700 automobiles, in this country. In 1915 we produced 842,249 cars, and in 1916 the production reached the unexpected number of 1,617,708 cars.
The value of the production in 1899 was $4,750,000, or about $1,283 a car. In 1916 the value was $972,336,400, an average of a little over $601 a car.
In 1916, also, we produced 92,130 commercial vehicles, valued at $157,000,000.
And this is not all. A comprehensive survey of the automobile industry will include the industries that the automobile has created, as manufacturing tires and accessories, and not to forget the enlarged market for gasoline and oil. As the jokesmiths have it, “It isn’t the original cost, but the upkeep that counts.”
For illustration, in the matter of tires, C. H. Williams, of the Goodyear Tire and Rubber Company, who is in a position to know, said that in 1916 the motorists of the United States took from their wheels and replaced some 9,000,000 tires, representing an expenditure in that year of about $300,000,000 for tires.
Any motorist can draw from his experience and compare the expense for tires with that for gasoline, and from these tire expense figures arrive at a reasonably accurate estimate of the tremendous amount of money that was used in 1916 in paying for gasoline to run automobiles.
By way of an interpolation, it may here be remarked that these tire figures show that there is one problem in the automobile industry that the engineers still have to solve, and that is to produce a wheel that will give satisfactory service without requiring a pneumatic rubber tire.