Ford Abroad

Steyr is one of the best automobile names in Austria, but so poor is the country, so hemmed in by the tariff walls of neighbor states, that Steyr earns only minute profits, nearly all of which go to satisfy its major creditor, the Bank Boden-Credit-Anstalt. Blatantly last week the Socialist newsorgans of Vienna screeched that Boden-Credit-Anstalt "has its Capitalist foot on the neck" of Steyr and other Austrian manufacturing firms, charged that the bankers are keeping the businessmen down and starving the workers, because only in this way can they "keep money control of the Austrian State. . . . Austria, a people of slaves!" . . . etc. . . . etc.

Nub of the story: the Socialists say that Sir Percival Perry, General European Manager for Henry Ford, recently approached Steyr with a proposition that the factory be converted to make Ford parts. Steyr was willing, but Boden-Credit-Anstalt is supposed to have blocked the deal, fearful that such disturbing Ford innovations as high wages might be introduced into Austria.

Vexed and wroth were English tycoons last week when Sir Percival gave to the Spectator, famed London weekly review, a signed article by Mr. Ford in which the latter served notice that all Ford workmen will be paid at least -L-5 a week at his new English factory in Dagenham, while factories next door pay less than -L-3, and English textile mills pay as little as -L-2 75 (TIME, Aug. 12).

"If a higher rate of wages would mean elimination of old fashioned and inefficient employers," wrote Mr. Ford, "it is evident that such an elimination is just what England needs today. ... If some English employers are not efficient enough to pay high wages the, sooner they go the better. . . .

"You cannot get good work out of poorly paid men. ... It is astonishing how hard it is for some minds to understand it. It took about ten years in the U. S., but it is now generally received as part of the practical science of business." Parenthetically Mr. Ford interjected: "It has been said that in England we employ only teetotalers. That is not true, but we insist on sobriety. We can only pay good wages to sober workmen."

Finally Mr. Ford took a poke at his only English rivals, Sir Herbert Austin and Sir William Richard Morris.* They make "baby cars," the Austin 7 (7 h. p.) and the Morris-Cowley because in England larger cars pay a terrific license tax ($225 yearly for a Rolls-Royce, $120 for a U.S. Ford, $50 for the special "British Ford" with smaller motor [10 h. p.], $35 for an Austin). So far so good, but Mr. Ford plainly told the English motor tycoons that it is foolish (for them to try and sell "baby cars" in the British Dominions, where roads are rough, hills steep, and greater horse power popular./- "Some English cars," wrote Mr. Ford, "have not been suitable to pioneering conditions in your Dominions, and your manufacturers have 'not attempted to make the type of cars wanted."

This criticism agrees exactly with conclusions reached by the MacDonald Government's Trade Mission to South America (TIME, Sept. 23), which has issued a report flaying English manufacturers as too stupid and stubborn to make what South Americans want to buy, and secondly flaying English diplomats as too stiff, superior, condescending and ungracious to be of any use in promoting trade. When this report was about to be issued the office of a worldwide press agency in London received advance copies in time to mail them to South America before the release date, but were absolutely forbidden to mail to the U. S. The Ford method was imported in Czechoslovakia, high wages and all, by Thomas Bat'a (TIME. Oct. 8, 1928). He is now the undisputed shoe tycoon of Europe, but unpopular. Socialist sheets charge that he pays his men double, then exacts triple and quadruple work from them. Germans believe in a modified kind of Fordization called "rationalization." A rationalizer gives his men better tools and machinery, drives them harder, but does not pay higher wages unless forced to do so. Probably the biggest business issue in Europe today is: To Fordize or not to Fordize? Grand master of the invisible order of European Fordizers is Sir Percival Perry.

Medium tall, erect, precise, a wearer of hard suits, unfashionable collars and old-fashioned spectacles is Sir Percival Lea Dewhurst Perry, 52, who was the original agent (1909) for Ford cars in England.

Few dealers have any warm liking for Mr. Ford, because of his autocratic methods and because the commission he allows them is the lowest in the industry, 17%. Before the War Mr. Perry (not yet Sir) quit Mr. Ford, served 1916-18 as director of foods, farm machinery, and later put through the enormous task of disposing of Britain's War salvage.

When Mr. and Mrs. Ford went to England in 1928, the Motor Man was able to hire Sir Percival a second time, and from this dates the enormous expansion of Ford Motors Ltd., a subsidiary which showed profits last year of -L-1,013.506. or almost as much as dividend-shy Sir William Morris made with his whole enterprise.

In January 1930, Sir Percival sailed for Turkey and came back overland through Europe, leaving consternation in his wake --such as the Steyr scandal in Vienna and the Isotta-Fraschini affair in Milan (TIME, March 31). Back in London, "Sir P.," who is after all an Englishman, did not join Mr. Ford in lambasting his countrymen. Instead, for his part, he discreetly praised the European workman, thus: "Laboring under the same conditions and receiving the same high wages the European workman is more efficient than the American, who is no miracle worker."

He added: "What is probably more significant is that during our task of adjusting wages to secure uniformity* we found it necessary to substantially increase the minimum wage at our Antwerp factory. . . . The response of the worker was almost immediate and was displayed by a reduction of the minute costs. . . . In Denmark, where we pay the highest wages in Europe, we find the lowest unit costs."

A significant fact which few U. S. citizens realize is that today Ford is the biggest U. S. name in Europe, bigger than Hoover. Edison or Morgan, vastly bigger than Lindbergh or Stimson.

* Although 18 years a motor maker, Sir William has plowed all his profits back into his business. He announced last week that this year, for the first time, he will take a modest dividend of -L-250,000, will plow in the remaining -L-1.100,000 profit for the year.

/-Austin's sales success in the Dominions seems enormous to British eyes, trifling when compared with Ford figures. In June the special U. S. Austin will appear, is already being advertised as a cocky little bantam, has a bantam rooster trademark. *The International Labor Office adjoining the League of Nations in Geneva, is preparing for Mr. Ford a report which will enable him to pay his workman in a given European country a wage sufficient to buy in that country what a Ford worker in Detroit can buy with his wage.

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