If the Model N chassis cost $206 dollars. And the Model K chassis was contracted from Dodge Brothers for $437, this is a a 212% difference between the two components.
Using extremely "rough math" let's say all similar components are also 212% for the Model K over the Model N. Let's also say the Model K has an added cost of 125% for additional components (magneto, etc) and materials. Now, for the sake of this "guesswork" (because that's all I have at this point), let's assign a "profit" to the Model N. If the Model N, selling for $500, made $50 for Ford Motor Company, what should the Model K have made (to be "profitable")?
Applying the numbers above (again, just for the sake of the argument), the Model K might have cost about $1200 to produce ($450 N "cost" guess, times 212% chassis differential, times 125% added materials and components "guess").
This seems low, so let's assign more "cost" to the Model K, possibly for extra advertising cost per unit, additional shipping costs, or any other reason one might come up with. What we do know, Ford was paying Dodge Brothers $437 per unit for the chassis, vs. paying Ford's subsidiary (that the Dodge Brothers had stock in) $206 for Model N chassis.
So, we'll "assign" another $500 cost for the Model K. If we do, we're now at about $1700 per car for the Model K. I think we're being very "liberal" with Ford's money using these numbers. If there were any validity to these guesses (and I don't know that there are), there is still $700 profit selling the Model K at $2500 per car (1906 price).
If Ford were selling the $500 Model N for $50 profit, they would need to sell 14 Model Ns to equal the profit selling one Model K. As you see in the snippet from the Dodge Brothers book, Ford originally contracted for 10,000 N chassis and 1,000 Model K chassis, or a ten to one ratio.
I feel safe assuming that Ford built a profit into both the Model N and K when setting prices in 1906. I also feel safe assuming there was a sales plan in place when ordering 10,000 N chassis and 1,000 K chassis. That plan being, sell the two cars ten to one, N to K.
OK, where are the holes in this reasoning (without additional information)?
Could it be that the Model K was a good or at least adequate "profit maker"?
I think I'll be able to find some of the other component costs of both cars (and maybe someone has some numbers). If nothing else, the early T body is a smaller version of the K touring body, so that might be a place to start with a guess on the body cost. I believe we do know some of the costs of the NRS cars.
Does anyone have any other cost/price information?
I think the Model K chassis would be more like 3X the cost of a Model N chassis. The engine is infinitely more complex with its more time consuming individual cylinders for example. Charles Sorensen worked hard to make the N cylinders cost the same to manufacture as a single Model K cylinder.
The Model N frame was made in house by Ford Manufacturing company, while the Model K frame was made by Dodge Brothers.
The Model N firewall was made in house. Model K firewall supplied by Dodge Brothers.
Axles and steering gear for both cars was supplied by the Dodgee, but the K parts were far more complex and costly.
Ford had Charles Sorensen construct a Model N body in the Piquette Plant to see what one cost in terms of man hours and materials in order to better understand the profits being made by OJ Beaudette, which Ford thought were excessive, but he could not prove it on the earlier cars like the K. By doing this Ford was able to purchase Model N bodies at a huge reduction in cost, not to mention the N body is a mere shadow of the complexity involved in the K body.
Talk about wheels and tires, the K parts again are bigger and more costly, and as Henry Ford often said, the tires were one of the most expensive components of the car. Again Ford negotiated a huge discount for the Model N thanks to high volume, something the Model K never achieved.
Overall I would say the profits of one Model N were likely equal to one Model K, all things considered.
Rob I believe you are on to something but there is another way to look at it. From the manufacturers point of view there are price point markets. The going rate for a mass seller seems to be that $500 price point. Those units priced in that range would sell 10's of thousands. Then there is the $2500 price point. Those units sell in the hundreds. A retailer could want to appeal to as many price points in the market as possible. You would not want to loose sales, at any level, if you have the means to compete at all levels. The very structure of GM was based upon this. Base level Chevrolet to top of the line Cadillac. Modern day Ford did the same thing with Ford Mercury & Lincoln. The profit range on these cars may have been a simple flat rate calculation, you assume 10% with the N. The K may have been similar 8-15%. The question that resides here is did Henry think this way? Did he believe in the multiple market approach. I would speculate NO. Henry worked to gain majority control of the company and to reduce the product line down to one, the T. His "dislike" of the K may have been it's mere existence within the company and not the actual car. He was known to use the K personally, why not it had his name on it and his company behind it.
"Ford had Charles Sorensen construct a Model N body in the Piquette Plant to see what one cost in terms of man hours and materials in order to better understand the profits being made by OJ Beaudette, which Ford thought were excessive, but he could not prove it on the earlier cars like the K. By doing this Ford was able to purchase Model N bodies at a huge reduction in cost, not to mention the N body is a mere shadow of the complexity involved in the K body."
Huh? How was the K earlier than the N? OJ Beaudette did not supply bodies to Ford until 1909:
In 1909, Beaudette received their first contracts from the Ford Motor Co. to produce closed bodies for the Model T. They also built bodies for the Jackson Automobile Co. in Jackson, Michigan, but most of their output after 1910 went to Ford.
Some confusion surrounds Beaudette-bodied Model Ts as Ford sometimes referred to them as "Pontiac" bodies, however every Beaudette body featured a stamped body number on the floor boards with a "B" prefix.
Initially most of the Model T’s bodies were supplied by Ford's existing auto body suppliers C.R. Wilson (1903) and Everitt Brothers (1908). O.J. Beaudette (1910), Kelsey-Herbert Co. (1910), American Body Co. (1911), Hayes Mfg. Co.(1911) Milburn Wagon Co. (1911) and Fisher Body Co.(1912), and the Kahler Mfg. Co. (1915)...
When you speculate, it would be good for all of us if you said so, instead of just "throwing things" out there as though they were hard and fast fact. You are entitled to have opinions (as we all are), however the "need" to be right doesn't give you license to represent your opinions a fact and disregard all other opinions or information.
Again your "Johnny on the spot" on my thread. If you wish to contradict everything I put on this forum, could you at least have the courage to start your own thread so I'm not constantly working through all your "information" (that's a nice way of saying it)?
Is that too much to ask?
Ok, taken my meds, let's work through this.
Royce, I posted an excerpt for the Dodge Brothers book, saying the N chassis contract was let for $206 per unit. The next sentence says the Model K chassis contract was let for $437 per unit. What part of that don't you understand? Read the thread before you respond (if you must).
Also, REMEMBER, I OWN A MODEL K! AND A 1909 T! the bodies are almost exactly the same, right down to the door latches. Similar compartment under the back seat, similar lines etc. so, it's safe to assume the cost should be on a similar scale, except for volume reductions and a little more material. AND I ALSO OWN A MODEL N (number 3 by the way, let's throw that out there too) and yes, the body is less complex. But, in my "projections above, I took the N assigned cost ($450, a big old SWAG) and multiplied times the increased cost difference of the K chassis over the N chassis, or 212%). Then I took that general number for a K, and again took it times 125%. Then, I "tacked" on another $500 "cost" just to keep anyone from "squeaking". I think this pretty liberal "estimating" to get to a cost of $1700 for the Model K. (Again, the only "facts" are what we know the K and N chassis cost, along with the "fact" we know Ford charged $500 for the Model N and $2500 for the Model K in 1906.
And why would Henry Ford work so arduously to reduce fixed costs of the NRS, and not the Model K?i
Another point, the shareholders of Ford Manufacturing include (among others) Henry Ford, James Couzens, JOHN AND HORRACE DODGE. BOTH DODGE'S MAKE MONEY WHEN FORD MANUFACTURING MAKES MONEY! Ford Manufacturing was a company constructed to allow more profits be realized by most of the Ford principles except A. Malcomsen. It did not "exclude" the Dodge Brothers. In fact, John Dodge was the Vice President.
John, yes, price points is another good way to look at it. Also, the light touring (eventual Model T) was supposed to be brought out in the spring of 1908. This would have been in the middle of the model year as Ford was going full bore producing the Models S, S roadster, and K. However, the car Ford originally intended to sell in the spring of 1908 (and shown at auto shows in the fall/winter 1907-1908) was not the T we know now. It did not have an internal magneto, probably not an enclosed transmission, and the drawings we have show a Model S Roadster style cowl with a T like touring body.
I think it will be possible to isolate some of the individual piece costs of both the N and K. If so, maybe we'll start to determine if the Model K truly was profitable or not. If it was, there goes another "myth". If not profitable, so be it. It shouldn't hurt to ask the question.
You posted : "So, we'll "assign" another $500 cost for the Model K. If we do, we're now at about $1700 per car for the Model K. I think we're being very "liberal" with Ford's money using these numbers. If there were any validity to these guesses (and I don't know that there are), there is still $700 profit selling the Model K at $2500 per car (1906 price)."
You analysis is somewhat good, 'cept maybe the 'profit' figure you give by assuming prod. cost over the chassis cost is right.
A more fair review would to assume the 'profit' as a percentage of list price. The Model N profit of $50 per car would be 10% of list price.
If you assume the same profit margin, then 10% of $2500 would be $250 per car for the K. That would to me be similar. So the Model K total cost would be about $2,250.
That is notable, as the FORD advertising for the 1907 model year stated that a K 'could not be profitably sold today' for the price last year, price increase had to occur, that the profit margin was too low the the mfg of the K.
History shows use that Henry 'used' the Model K to force out Malcomson, Henry incorporated the Ford Mfg Co, to build all the Model N parts that the Dodges were doing, thereby the Model K costs had to be higher, since profits on mfg went to the Dodges,....the outsourced mostly K was costly to build, and was being list priced at a remarkably low selling price compared to the high end , made to order, big sixes of the day.
OK I'm just learning about early cars and know nothing about them but as I read the different postings I have some questions.
Did Dodge Brothers produce car parts for other manufactures? If so were they the larger frame that the Model K would use?
If Henry was geared up and producing Model N's in large numbers would it not be cheaper for him to purchase is frames from Dodge Brothers rather then retool his factory for a short run of 1000 frames per year?
It was mentioned that similar items like door handles, latches etc appeared on both models therefore Henry wasn't adding any costs to one model but just larger production runs of the same item used on both. an additional cost cutting measure.
With using the same materials for several cars he could keep his overhead down and increase profits.
Rob's onto something here, keep it flowing and help...
- a little more research should indicate where the motor was. Was it also DB? I don't know.
-Rob points out near identical bodies to the T or what would have been that special S...
-Tires were in fact a huge part of the cost on a % basis, but a multiplier should not be that difficult to figure out using aftermarket prices for the sizes.
-Assembly hours probably actually would have not been that much different when you think about it. As a 'packager', mounting wheels and tires, hooking up the body and trim, etc. probably not that much different..but what do I know. I'd tend to want to slide a bit with Rob, and use T as a fair comparison, he owns both and also has experience on the one in between
- I KNOW I have seen the cost breakdown by category as Rob is trying to recreate. Just don't know which model, think it WAS T but not sure, know it exists in one of the many published books but just can't put my finger on it right now as to which book.
So jump aboard...let Rob make his charts, and let's see where it goes Be nice if at the end of the day we could arrive at consensus as to method...and only then look at individual range 'adjustments' that can not be found in documentation. With all of the big categories perhaps firm or close to firm...the rest sort of just follows doesn't it?
Good points. When I "build" Model K prices, knowing that the N cost had to be less than $500, it's difficult to get to $2250 cost for the Model K (to build in the same profit margin, whatever that was). We now know (If the Dodge book is correct, and no reason to think it's not) one of the major components, the chassis cost 212% of a Model N chassis. When you deduct the chassis cost of $437 from a projected cost of $2250 for the K, that leaves a remaining cost of $1813 for the rest of the Model K.
The body shouldn't be a tremendous amount more than a 1908/1909 T touring body, just larger, otherwise similar construction. This leaves us engine, wheels, tires and magneto. I'm sure someone reading this will know a number
for the early T touring body (jobbed out), and the K body shouldn't cost a lot more.
It just might be possible the Model K (and other large cars of the period) had a pretty healthy profit margin built in. There must be a reason investors with Ford (Malcomsen) and other car makers chose to build large expensive cars, to make money.
I believe early on Dodge built components for Olds. I know they also built components for motorized boats too.
Looking at the 1906 K body, it have had to be very very expensive compared to a 1909 Model T body. The many compound curves in that "king-of-the-Belgians" style body would have driven up the cost significantly. It's no wonder that they were simplified for the 1907/08 versions. Even the later style would cost more significantly more than a T body due to the low numbers produced. Cheaper by the dozen as they say.
Yes, I forgot about the Tulip body differences. However, do you recall how much the 08/09 T touring body cost Ford? Also, we know Ford used several body makers for the T, so the "volume discount" may not have been as great as we would expect.
Even so, if I had a few numbers to work with, it would help.
As for the early Victorian style body, Bob Trevan made one for his K, maybe he will see this and give his take on the expense and how intricate the body was.
I would throw this to you Rob about the significant increased cost in K production as compared to the N - Greed by suppliers. This was a new blossoming industry, and if you could afford a car, you had money. There has always been people/companies willing to charge more than what a product is worth. I have no evidence, of course, but worth considering it in your research.
The following quotes are from your post above in this thread at 7:02am:
"I think the Model K chassis would be more like 3X the cost of a Model N chassis."
What makes you so quickly dismiss the quote regarding the cost of the respective chassis that Rob posted when he opened the thread.....which states as fact the cost of the N and K chassis? It's written in a book so its got to be true. Are you attempting to rewrite history?
"Axles and steering gear for both cars was supplied by the Dodgee,(sic) but the K parts were far more complex and costly." Is this a statement of fact? If so, please support it. Although it's written as if it is a fact, I suspect that it's merely another one of your suppositions.
"Overall I would say the profits of one Model N were likely equal to one Model K, all things considered."
Talk about out of left field......
For weeks you have been steadfastly stating, as if it were fact, (and maybe it is, and maybe it isn't, I haven't a clue) that Model K Fords were a financial failure and generated losses for Ford. What has suddenly changed that causes you to now conclude that Model Ns and Model Ks were equally profitable?
To be clear, I don't personally care if Model K Fords were or were not profitable for Ford. Nor do I care if individuals, then or today, thought or think highly or poorly of Model K Fords.
However, with all the previously unpublished information that Rob has uncovered and freely shared related to the Model K, I must admit that I am left wondering about the veracity of the well published historical accounts the Model K Ford.
It would be much more interesting if you were to bring something new to the discussion. Simply repeating, over and over, that which has been well published, and expressing your strong opinions as fact, really doesn't from my perspective add much to the discussion....aside from a bit of levity.
I find it odd that when you speculate on this thread it is OK, but when I politely and with considerable insight add constructive commentary you find it offensive. Nonetheless someone needs to say it, and if it is me, then so be it.
Still remaining courteous and enjoying the discussion!
You are probably correct, I need to look in that chapter in Sorensen's book "My Forty Years at Ford" and see what the name of the Model N body manufacturer was. There is a quite detailed description of the events I related, and if I bafunga'd the name of the body maker then I will apologize and correct the notation in a post to this thread.
Henry Ford is on PBS here this evening at 8:00 PM. I am going to pay close attention. I bet we will get all these Model K questions answered.
If you want to compare the price of a 1909 T body as a starting point to figure the cost of a "similar" K body, I don't know what Ford paid for them. But I am pretty sure it would have been somewhat less than $800 per T touring body fully fitted with fenders and running boards. Ford had to pay something for a chassis to put under it to sell as a car.
Just my silly observation.
Drive carefully, and enjoy, W2
So many good threads ... so little time...
But if folks can please add references when they are available that would be helpful. Eventually when I have more time I hope to review them.
Note the Accounts Receivable ledgers at the Benson Ford Archives should provide a good data point for the chassis as well as the engines. Both the N and K would have had cars, chassis, and engines shipped to Ford of Canada and I believe the prices should be annotated there.
Additionally in Carl Pate's book "Pate's Early Ford Automobile Encyclopedia" in the CD in the back -- there is a chance it contains some of the Customs data when parts, engines, chassis and cars were sold to Ford of Canada.
Finally, I believe the $500 Model N was not sold for that long of a period of time. In part because they could charge more. Also because the prices went up in the 1907 catalogs. The 1907 N catalog has the N listed at:
Price -- 28 x 3 tires, (without lamps or horn,) $600, F.O.B. Detroit, Mich (page 14)
The Model R in the same 1907 catalog is listed on page 15 has:
Price 30 x 3 tires, 2 side oil lamps, tail lamp, tube horn, storage battery and iron for top, $750 F.O.B. Detroit.
And the same 1907 catalog page 16 has the K listed:
Price $2,800 F.O.B. Detroit, Mich. With extension Top, side curtains and storm front, pari gas lamps and generator, $3,000.
A possible lead for further research -- Walter Flanders -- I believe I read that his redesign for the machining of the Model N parts was a major step in production. And again from memory (not nearly as good as if I could find the source) I believe one of those web pages (not always reliable -- but I'm 90% sure it sounded crdible or I would not have saved it -- and no I haven't found it tonight) he discussed the profit margin on the N.
For Royce -- I too remember that paragraph or several paragraphs discussing how an "N" body was made by one of the Ford employees. How they documented the cost and made their offer to the body builder based on their prototype cost. And the body maker was not happy to have less profit per body than he previously had been accustomed to having. Something to the effect “We always make x,y,z, profit minimum per body” or something similar.
For Ralph -- actually Beaudett supplied all the 1908 Model S Roadster bodies for Ford USA. Ref e-mail from Trent Boggess (which I should be able to find -- but I did not look up tonight). Also shown below is the "B" and body number from a 1908 Model S Roadster -- courtesy of Andrew in Australia (USA car).
And they were a major supplier of the Model T bodies – ref the shipping documents on page478 a quick skim shows approximately 40 of 51 cars shipped had Beaudett bodies about 10 Wilson and one marked PA between Mar 3, 1909 to Mar 10, 1909 on that single page.
I suspect the sentence “In 1909, Beaudette received their first contracts from the Ford Motor Co. to produce closed bodies for the Model T. “ Literally meant enclosed vs open cars as mentioned above the 1908 Model S Roadster bodies were supplied by Beaudett. I would also guess that the sentence came from the Coachbuilt site – but that is only a guess.
Lots of additional information to find and discuss. And, yes, keeping it civil is important also.
Hap l9l5 cut off
I know I have it at home, but I'm on the road working for a few days. Do you have the parts list for Models K and N? I'd like a few "retail" prices for a few components of each, the body, engine, magneto (obviously on the K,), wheels and any other "key" components. There's a method to my madness if someone has a few of those numbers handy.
Ya. He is definitely going mad with all this research, and Royce is probably making him pull out all his hair.
Wait til he has to go home and shovel all that new snow.
Yes, Hap, I quoted directly from coachbuilt. Their statement was misleading, at least.
Looked at "My Forty Years at Ford" while watching the PBS documentary last night. The body maker story is on page 81 - 82, the body maker was Wilson. The crescendo of the meeting between Sorensen, CH Wills, Henry Ford versus CR Wilson and Fred Fisher is the reduction of the cost per unit of Model N bodies, versus the much higher unit profit Wilson had been making on the Model K bodies he was then currently supplying.
If you have a chance would you let us know what price Wilson wanted to charge and what price Ford said they would pay for the N bodies? Thank you for your years of support to our hobby.
Hap l9l5 cut off
Interesting thread and hopefully it will stimulate additional details and data about the early Fords. Anyone can go to the Early Ford Registry and look at the forum, photos, etc. For some areas you need to be a member such as the one that has the scans of some of the early literature. Shameless plug for EFR -- if anyone is interested in 1903-1909 Fords it has some great information and support. [Note, most if not all of those price list of parts are available on Carl’s DVD that comes with his “Pate’s Early Ford Automobile Encyclopedia” available from the author at: http://www.earlyfordcars.info/ as well as the club and vendors.] Rob, if you go to the Early Ford Registry site at: http://www.earlyfordregistry.com/members1.php that is the members only and you will need your password. I sent you a private message with your password in case you don’t remember it (I always have to look mine up.) The area has many items including the following scanned items:
Parts and Price Lists
Model S ad from Glen Rand
Model NRS Catalog Blue
Model N R S Catalog Brown
Brown Caine Catalog 14
Front End Alignment by Murray Fahnestock
Price List Model N
Price List Model T
The Ford 1905
Ford Motor Company 1906
Watch the Fords Go By
Model K Parts and Price
Ford Motor Cars (Slides)
Ford Motor Cars (jpg - better quality)
Model K Instructions
I did not see a date on the Model K Price list of parts – but it appears to be the 1907 based on what is written in the price list. I used the 1907 Model N,R,S price list (the S Roadster was not included in that one).
Part Model N Model K
Wheels 12.00 $22.50 (same price front or rear)
Front spring 6.00 7, 8, or 9 depending on the number of leaves
Front axle 25.00 75.00 (both complete - N catalog – includes spindles, tie rod, wishbone, etc)
Frame 25.00 75.00
Motor ………….not listed not listed (yes, they called it Motor and not engine)
Crankshaft 16.00 120.00
Piston complete 5.00 12.00
Connecting rod 2.00 6.00 (listed as complete for both)
Exhaust pipe 2.00 13.00 (for the N it is clearly the exhaust manifold for the K no photo but they have it listed as ’06 – under intake and ’07 over intake. They use the same name Exhaust pipe so I am ASSUMING they are both what we call today the exhaust manifold.)
Transmission 45.00 80.00 (listed as Transmission complete – but just the rotating drums and inards – no frame, pedals, bands, or any of that stuff – again based on the N price list picture – there was not an illustration of the part in the K price list.)
Transmission frame 25.00 50.00 (the 5 was not clear – but comparing it to other 3’s and 5’s it was 5)
Commmutator complete 4.00 10.00
Radiator 45.00 100.00 (note both stated complete – but for the N is stated “Complete with Starting Crank and Pump. That price is the same for 1906 or 1907 style K radiator).
Hood ….. 7.00 25.00
Front fender .50 7.00 (for K touring 4 for the 1906 style .. 8 for the K roadster)
Rear fenders .50 7.00 (for K touring …5 for the 1906 style … 8 for the K roadster)
Muffler complete 2.50 5.00
Magneto n/a 125.00 (100 for the ’06 style)
Coil box and coils – 25.00 ……. 90.00 (that is the 07 combination K coil box for battery and mag)
Body complete 75.00 300.00 (FYI – R body was the same price as the N body) (K roadster 200)
Carburetor ……….. 8.00 20.00 (different ones listed for N but same price – Buffalo listed for K)
Oiler 10.00 35.00 (note the McCord mechanical oiler for the R,S, and SR was 15)
If someone knows how to make the columns stay lined up when I post things -- please let me know. It looked a little better before it was posted.
Hap l9l5 cut off
Thanks. I didn't recall the list being on the EFR site.
I was hoping to draw a "correlation", possibly between the cost of parts (retail) for the N vs. K. Then, draw additional conclusions about retail price vs. actual cost to Ford.
Still some good material, just going to take more "work". I really now need to find the difference between retail and "actual" cost. Maybe Trent will have some general information regarding this approach.
If you do the "quick math" using the parts above you get to about $1200 for the K. Then, throw in the chassis (I didn't put in spring costs in the above numbers because they will already be on the chassis that we know Ford paid Dodge).
Add in the chassis and you are at $1700. Unfortunately, this doesn't take into account markup of retail parts. It also doesn't include engine components not listed.
Maybe pricing out the retail parts price of the chassis and then reducing all parts by the percentage difference between "wholesale"chassis" vs. "retail parts" list. Another problem I have is, (among others ) what did the Dodge chassis really consist of? Did it include wheels. Trans frame, etc etc.
More work to do, again, thanks Hap.
Maybe we'll get a better "apples to apples" comparison using the 1909-10 T parts list vs. the 1907/08 K parts. We know more about the T as far as expenses and profit (I believe). Also, the Model K is more like a T touring on a larger scale than the Model NRS.
Just a quick thought for anyone else trying to get where I'm going .
You're amazing! I've been enjoying your posts on this (and the MTFCI) forum for at least ten years. You always come up with great research while ignoring the personality conflicts that bog everyone else down. You are a true statesman and a credit to the hobby.
Look at Robert Lacey "Ford, the Men and the Machine" page 73 for detailed cost of a Model A. They made a solid $150 profit on the $750 sale price on each, and $50 more on the optional $100 tonneau.
Thanks for the encouragement. It helps that a lot of folks have compiled things in the past and many are still working to add to that information and provide corrections where appropriate. And of course it is a subject I really enjoy – old Fords. I don’t know nearly as much many other subjects.
Page 73 of "Ford, the Men and the Machine, sounds very similar to page 10 of Bruce's (RIP) book. There Bruce reprinted a letter by John W. Anderson to his Father, dated Jun 4, 1903. He gives the cost to Ford of $50 for the Model A runabout and $16 for upholstering. And the Tonneau was the same cost as the body $50. The profit on the Runabout was $150 and for the car equipped with the Tonneau it was $200. Of course the actual cost could have varied from that as those figures had an additional $46 estimated for any possible extra contingency.
For all -- thank you for helping us track down additional information and leads.
Hap l9l5 cut off
Thank you for your contributions. I suspect we will find out why Ford Mo. Co. charged $500 for the Model N, then changed to $600 with the 07 N. Also, the same applies to the Model K. It appears to me sales of the Model K kept pace with projections, and we know the 07/08 price for the Model K was only raised $300 to $2800, so I'm making the assumption that both price moves by Ford kept both Models profitable. I am convinced we will find the answers. Again, thank you for your contributions,
Absolutely co-incidentally my bedtime reading for the last week is the Hyde book on the Dodge Brothers. I've only read 50 pages or so - this is a reflection on how tired from work I am in the evenings! The book is clearly an excellent read and it seems to be well researched.
I took some mental notes as I read some things, not realising that you had used it as a point-of-reference here. I noticed it refers to (to me the previously unheard of) Model H, and I excitedly thought "two referrals to a Model H in the space of days"! But, of course, you were using the same source.
The Hyde book reasonably well defines what a chassis is, in parts suppliers terms of the era (the subject of another thread). It defines the chassis as the frame, engine, transmission - "everything except the wheels, tyres and body". I think our confusion with the word chassis today comes from the reference to the frame – that is, the rails and cross-members, x-members etc upon which the motor, suspension, etc are all attached (before monocoque) – being referred to as the chassis. In the era were are discussing, today’s chassis was is the frame.
And now the crux of my late contribution to this thread. I was also drawn to references to the Model K in the Hyde book. Of course, Dodge was the exclusive supplier of chassis (definition from that era) to Ford, until the startup of the Ford Manufacturing Company in November, 1905. The creation of the Ford Manufacturing Company (distinct from the Ford Motor Company, largely an assembly company then) achieved two goals. Firstly, it got the Henry Ford and some of the FMC directors – importantly, excluding Malcomson - into manufacturing. Secondly, the new manufacturing arm threatened Malcomson, who wanted to build large, luxurious and therefore expensive cars, which Henry Ford and James Couzens were at odds with.
As you point out above, the new Ford manufacturing arm would not build the chassis for the Model K, but it would build the inexpensive Model N, which was the car that Henry wanted and believed in.
Interestingly, the Hyde book makes the point that an order for 10,000 Model N chassis was placed with the Ford Manufacturing Company, and an order for 1,000 Model K chassis was placed with the Dodge Brothers, for delivery by 1 March, 1907. Do we know when that order was placed? Not really, but we do know (from the Hyde book) that, in 1905, the Dodge Brothers completed drawings, built patterns, etc for the Model K and, in the first third of 1906, Dodge Brothers provided components for the Model K.
What we don’t know is when that contract for 1,000 Model K chassis was signed between Ford and Dodge. It stands to reason that that contract was signed before Malcomson was ousted from the Ford Motor Company May, 1906, as that is when the Ford Manufacturing Company was then absorbed into the Ford Motor Company.
For anyone to claim that Henry Ford could’ve simply cancelled the Model K contract is too simplistic. It is also unrealistic because the company that bore Henry’s name relied almost totally on the Dodge brothers for product, and they were also directors of the Ford Motor Company. Such a move would be untenable. Equally, according to the Hyde book, the Dodges had given themselves over almost exclusively to Ford work and, aside from some steam boat work in 1905 (ref Hyde book) Ford is where all of their work was going to.
I am finding the Hyde book Rob is also reading highly informative and it seems to dovetail very well with what is known about the Ford history. Its early days yet for me, but that book on the Dodge brothers looks to be compulsory reading for any fan of the Ford history.
I stumbled on portions of the book. The portions that immediately caught my eye were the 1,000 Model K chassis contract with Dodge and the 10,000 contract with Ford Man Co for Model N chassis.
If the chassis contracted includes the engine, transmission, and frame (as you suspect) then the cost of $206 for the Model N chassis and $437.50 for the Model K is key to what I'm looking for. With a $300 parts price for the touring body, I think it very likely the Model K was quite profitable with a $2500 and the $2800 price tag.
By comparison, the Model N at $500 then $600 had much less margin to work with (although we know that with volume involved, this is where the "money was").
If we determine the "profit margin" of the K and N, we then could draw conclusions about how many N sales are required to equal one K profit margin (or vice verca). For example, if the Model N at $600 made $50 per car (I'm just pulling numbers out of the air), and the K made $500, it takes ten Model N sales to bring in the same dollars profit (I know this is terribly simplistic) as the sale of one K. Ironically, that is the ratio of N chassis to K chassis contracted.
Thanks for your contributions,
I thought this account saying Ford Motor Company had the best year ever for the fiscal year ending September 30 1908 is interesting. This is just before the introduction of the Model T, and a year when the Model K sales essentially ended in the summer and Models N and S sales are ending in the fall.
James Couzens is quoted in the clip:
And the Ford executives shared that good 1908 year of business with the employees.
The Horseless Age January 6, 1909.
Sorry for the delay in replying. I have little spare time at present.
It is certainly my understanding that a chassis comprised the mechanical parts, including frame, suspension, engine, transmission, axles, steering, etc. The references above from the Hyde book provide further support to that understanding.
I think it is without question that the Model K was profitable, but I don't think it was a fast seller - as the other less expensive models were. I bet the arithmetic done doesn't include cashflow impact (ROI).
I have no breakdowns as to Model K costings although the Anderson letter of 1903 to his father, seeking money to investing in the new Ford company, provides some insight. That letter can be read at http://www.mtfca.com/encyclo/begin.htm - it's about half way down the page. It concerns the Model A.
That letter shows a $150 to $200 profit on a $850 car - a very healthy profit indeed.
Machine $250.00 Fixed by contract
Body 50.00 Fixed by contract
Wheels 26.00 Fixed by contract
Upholstering 16.00 Fixed by contract
Tires 40.00 (all these fixed by contract)
Cost of assembling 20.00 This includes wages, rent, insurance and all incidentals at factory
Cost of selling 150.00 This includes advertising, all salaries, commissions, etc. Total cost $554.00
Cost of tonneau 50.00
Exactly right, it might be possible to say that the Model K made a "paper" profit because the cars sold for more than the cost of the individual components. That doesn't mean the company actually made a profit on their sale.
Any business must generate enough profits in a given amount of time to justify the cost of overhead. If I have product sitting in my business that is finished and ready for sale that I can build say ten a day, but I can only sell one a day, I run out of floor space and have to stop production until inventory clears. Or I have to pay for storage.
As Rob pointed out in one of his earlier posts Ford was capable of building ten Model K's a day, yet averaged less than one Model K sale per day over the span of the sales period.
Good points. I hope to find more specific information about the K and other early Ford costs and margins. At some point, maybe this summer, I hope to make it to Detroit and conduct some research. When that happens, I'll probably ask for some suggestions how and where to begin.
Thank you for the link. I've been reading Bruce's information, and it reminds me of his wisdom. His comments include the following:
"In the story presented here we have used bits and pieces of information from the listed sources, as well as a few more we have collected over the years. In no way do we suggest that "this is the true story" and that all others are suspect. Far from it; we will just add our conjecture to the collection. The story presented is believed to be as accurate as is possible….....as seen from a vantage point of almost a hundred years after the fact. Where this story might differ from another, it is just our interpretation of the data compared with that of someone else."
© Bruce W. McCalley. Rev. April 10, 2000.
I wish I'd have known Bruce and been able to ask him numerous questions. However, we are fortunate to have many wonderful resources and individuals with tremendous knowledge on this site, and I'm thankful for that.