Chapter 243 Ford Goes South
As a Dixie native, Sheffield certainly didn't care whether Detroit would disappear or not. Anyway, it was the territory of the Yankees at that time. Besides, Detroit's production efficiency was not high. It just had a first-mover advantage.
Detroit is a northern city, and it has all the disadvantages of northern cities, such as cold winters. The cold may not seem like a big deal, but it will incur a lot of extra costs. Heating requires coal, and the factory needs to be kept warm. In my previous life, I was too aware of the disadvantages of these hidden costs in Sheffield, the northernmost city of the Republic.
Detroit simply turned its first-mover advantage into a scale advantage, and offset this disadvantage with its huge scale, making it impossible for other cities to compete in the automotive industry. However, once globalization occurred, this disadvantage was magnified. It also became part of the Rust Belt of the United States in later generations.
Automobiles can be regarded as a high-tech industry in this era, but they are still a labor-intensive industry. Detroit has grown from a relatively unknown city to a major city in the United States, relying on the automobile industry, which attracted a large population to settle in Detroit. In the end, the automobile industry was the reason for its success and failure. Due to the decline of the automobile industry, Detroit has been struggling for a hundred years and has become a base camp for the black population.
Population is a huge disadvantage of the southern states. If they can attract many people to settle in Texas, they can enrich the strength of the South. As for how Detroit will develop in the future? He is not a Yankee, so he can't care so much.
It can be said that Detroit's pillar industry, which was still in the making, was killed by Sheffield in Houston on the eve of its emergence when it was still a seed.
"Do you know that no one can compete with me in the automotive field now, because the electricity used is from Southern Electric, the production line is manufactured by United Machinery Company, and the oil for the car is from the Texas oil field. Moreover, I have calculated how much a car costs, and the price is stuck at this cost. Ford Motor Company does not make much money at all. The scale of 100,000 cars can only make me 2 million US dollars, but I make little. Other engineers who want to get involved in the automotive industry, even with Morgan's investment, can't compete with me. I make less money and it is a luxury for them to even make money." Sheffield looked at the busy factory, pinched his waist and said to John Connor and Ramon Hess, his mouth full of arrogance, "After the goal of 100,000 cars is achieved, the wages of the workers of United Motors will still be higher than those of ordinary workers. Do you know what to do now?"
"Boss, do you want to expand production?" Ramon Hess asked uncertainly, "But this may reduce profits."
"In recent years, Ford Motor has been pursuing market share. Making money is of course important, but we have to keep an eye on the pricing of potential competitors. However, every extra 100,000 cars on the market is equivalent to an extra 100,000 oil-guzzling tigers. I can also make money from the increased production of Texas oil fields. Auto companies would rather make less money than allow competitors to make profits. If they want to enter the automotive field, they can raise funds and burn money to get in. There is nothing wrong with that."
Sheffield did not hide his thoughts at all. He hated competitors and pursued monopoly. He also wanted to monopolize under the banner of low prices and make another penny by increasing oil production.
The automobile industry is controlled in his own hands, and Texas Oil is shared with Standard Oil. His ability to realize cash will be greatly improved. Moreover, the automobile industry can drive the emergence of many industries, which is equivalent to feeding many workers. Coupled with his existing position in agriculture and animal husbandry, he will gain huge influence.
In addition to Sheffield in Houston who was full of confidence, Rockefeller Jr. in New York was so happy that he couldn't sleep for several days. Starting from the bold statement of producing 100,000 vehicles per month, the stock market received timely feedback, and Standard Oil's stock price entered a slow climbing stage. As more and more news came, until Sheffield Motor Company completed the bold statement of producing 100,000 vehicles per month, Standard Oil's stock price also ushered in an explosion.
Many investors understand that Sheffield United Motors' cars are all internal combustion engines that require oil as a power source. Once these oil-consuming machines are put on the market, the importance of oil will be greatly enhanced, and Standard Oil, as a representative of the United States Trust, will benefit greatly from it.
If investors don't buy Standard Oil now, they are simply fooling themselves. Once the automobile industry is established, it is hard to tell who will be the leader in the industry and whether there will be new entrants. However, as a related industry, Standard Oil has been standing for decades, so the risk is lower.
Surrounded by the good news from the stock market of Rockefeller Jr., he didn't feel uncomfortable at all when thinking of Sheffield. Isn't she just a sister? He has only one sister. In addition to Edith Rockefeller, there is also...
Some are happy while others are sad. Where there are beneficiaries like Rockefeller Jr., there are also losers. Detroit, which is not far from New York on the map, is like a basin of cold water poured on the pioneers of the automobile industry. The previous enthusiasm had long been extinguished with the success of producing 100,000 vehicles per month.
Their mood is just like the budding automobile city, which has directly entered the dead stage. In the past few days, many people have started to pack their bags and prepare to go to Houston to try their luck and enter the real birthplace of automobiles to find opportunities. It can be said that the establishment of the automobile company in Houston and the completion of the production of 100,000 vehicles in a short period of time have destroyed the confidence of most pioneers in the automobile industry.
How could they possibly fight against such a powerful opponent? On their own land, using their own electricity, using their own production lines, pouring in their own oil. Such a closed-loop structure is too hopeless for the pioneers who are still fighting alone.
These pioneers of the automotive industry did not say everything, because Sheffield also took over several rubber plantations from the Spanish colonists in the Philippines. Southeast Asia itself is an important producing area of rubber. With his connections, rubber was not difficult for him at all. He could even get the material for the wheels himself.
It’s just that the automobile pioneers who have not yet grown up don’t know this desperate fact. The reality is always more desperate than they imagine.
In the simple rented factory, Ford, covered in oil, sat dejectedly on a bench. Not far from him was a newly manufactured car, but compared to another car with the same name as his, which was featured in the newspaper, the car he manufactured was like an ugly duckling. People who saw the Ford car would not even look at it again.
Ford, with a sad face, recalled the scene two years ago when he had just made his first car and someone came to him. At that time, he was full of energy and felt that he could create a new industry so that every citizen of the United States could own a car of their own. He would also write his own chapter in history because of this move.
With this feeling, after learning of the other party's invitation, Ford rejected the other party's kindness after not too long of consideration, and began to work hard for his dream in Detroit with his like-minded companions.
The man who came to look for her tried to persuade her for a long time but finally returned in vain. When he left, he gave her a final persuasion, "You don't know what kind of support your dream needs, and you don't know what kind of strength the company you rejected has. I hope you will figure this out one day."
Today, Ford finally understood the meaning of the other party's words. The opponent he was about to face was so powerful that he was invincible.
"Ford, look at this!" Ford's friend went straight into the factory and shouted. He soon saw his dazed friend and said with a newspaper in his hand, "The price of Ford's car has been announced. It's two hundred and twenty dollars."
Ford, who was sitting on the bench, was stunned by the news. Thinking of his long experience in assembly, he said hesitantly, "It's not surprising. With such a large scale and efficiency, the price has been reduced to this level? If a person saves money for a year, he can own his own car. But my friend, do you know what this means?"
"What does it mean?" The visitor was full of doubts. He was just a senior repair mechanic and didn't understand many things.
"This means that, with the current pricing, no one can compete with Sheffield Motors' products. Sheffield Motors has already lowered the price to such an extent that other competitors in the automotive industry are not making any profit at all!" Ford said with a wry smile, "This company has already eliminated all its competitors at the very beginning."
Just as the two were talking, William Durant, a well-dressed man, walked in. Seeing the two dejected men, he sighed in his heart and felt sorry for their future. As a multi-millionaire, William Durant also foresaw that the automobile industry was gaining momentum, so he came to Detroit to find like-minded partners, but he did not expect that the explosion of the automobile industry occurred in Houston. He made a wrong judgment.
"Ford, I'm going to Houston soon. If you're willing, you can go with me and we'll meet the boss of United Motors. What do you think?" William Durant proposed seriously in front of Ford. He had heard about Ford being wooed in the past few days and felt a little sorry for him.
Ford, who had been lowering his head, suddenly looked up, his eyes wide open, full of stubbornness, but then the fire in them slowly died out, and he finally said, "Then let's go over and try our luck."
(End of this chapter)
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