So what they found was that their the automobile itself, after you have designed it, you freeze your design and it weighs just so much. And in that of that automobile, there were very many, there were very heavy cars in those days, but let me just take somewhere in the 3 ton automobile. Out of the 3 tons, a very large part of that is about 2 tons is steel. And once you get mass purchasing of steel, by the time you buy 100 cars, the price does not go down any more, so there is really a fixed price for production steel. So therefore you find that the car, as designed, has a base price per pound, so much steel, so much glass, whatever it may be the early ones didn't have much glass. They were all open tourings and so forth. But there was a glass windshield, and even then they had celluloid windshields, those sloping ones, because glass was expensive part to put in there, and it weighed a whole lot.

At any rate, you had a base price of your car per pound, and you had then, the capital costs up here. So obviously, you had then, you divide the number of cars you produce, you divide that number into your capital cost and that is your overhead the overhead in relation then to the fixed costs of what it costs per pound. So the overhead is very different then from the fixed cost. Now they found then, not until, in the size of operation of the automobile, not until the record made it very clear, not until you got to selling 130,000 cars a year could you go into mass production. So what Dillon Reed did was to mass together, buy enough factories that had gone bust when the company went bust the tools didn't go bust, they were beautiful tools, lovely drill press so they put enough companies together to get a mass produced capability of more than 130,000 cars, and they set about then to develop a car that they would sell that way.

This became, then, the Chrysler group, and Walter Chrysler, then, I talked a little bit about. He was an extremely good actual mechanic. He was a true production engineering man too. And, so that was Dillon Reed, and with it came then, this was mid-20's, and big money now suddenly said, "We now really know what we're doing," and setting up this Chrysler company and, Chrysler really was an incredible hit, beautiful design at the time, and first car with four-wheel brakes, and first car that had a really beautifully designed bearings and so forth, and it really was, truly superior, fantastic little thing. And the, now the Wall Street was in the automobile business in really a big way and really looking at big things. They said "The thing that really is making trouble is, in Detroit we have all these inventors who made those cars, and we bring them together, and all those men are interested in is inventing and making a better car. What we've got to do is make money. And we can't have changes and changes. These people are continually changing things. They never are contented. So that they mess up the whole program. Everything they looked into so that we've got to get all the inventors out of Detroit. All we want is production men in Detroit. And this is exactly what they did. They were a great power.

So everybody said, if you're not improving the car, you're not going to be able because the American people loved the automobile show, their whole life was suddenly around this new ability to roll from here to there instead of walking from here to there, so it was a very big thing. It was terribly exciting, and our lives began to change. I was really able to cover distances I never dreamed I could cover, and I could have these five factories and be getting around.

Well, automobile show. So the Dillon-Reed said, then, that's very good. The advertising houses up in mid-town New York said this is where the big advertising firms began to be known in a powerful way. They said, just at that year, in 1926, the air brush was invented, and you can really do some very nice modulation in a hurry with an air brush, so they said, we will the advertising house said "We'll handle that, we'll we really won't change the car, all we want is reliable production and reliable parts we know how to turn out a good car now, really produce it really make some money and we'll take care of the "newness factor" with the public so they'll feel they're getting a new model simply by superficiality, and we'll paint a new picture, we'll dress up the outside of the car, and this became, this is the word "industrial designer." So the "industrial designer" was a stylist, a superficial stylist of machinery. And began to such words as "schmaltz" and so forth began to come along, and it was the beginning of America beginning to deceive itself, where the money making side really began to corrupt really a tremendous earnestness of the human being to really understand his car, a very exciting thing to me to really understand my car and learn more and more about the gases, and the carburetions, and the electronics and things fascinating. But suddenly they said, "We don't want you to do that." And the new banking world said we don't even want you to even have to lift the hood, and so forth well you could make that seemingly a great virtue, and so you get to the point where, not only if you did lift the hood, everything was arranged in such a way you could not get at the part unless you have the special tool of that particular service station. All of this was deliberately done.

Now, at any rate, I wanted you to know where the word "industrial design" so a great many beautiful human beings, like kids would go into architecture, and get the idea they would be designing people's buildings instead of just learning how to be a draftsman in somebody's mechanical office there. And so a number of people kid's say, industry is really a fascinating thing, I'm going to be an industrial I really understand how you design in industry... They're not taught that way at all, they don't know anything about these tolerances, they simply are then at the schools they are near the engineering department and they learn a little bit about how it goes, but their job is to sell it, and further more "industrial designer" also uses second story people to go and steal the other man's design and so forth. It is not a nice profession. And if you really get deeply into it, then as you talk about architecture it turns into being just sort of a merchandising game where the man is really a salesman, and having really taken incredible amounts of orders, and doesn't have his own way at all. Because the patron decides he's going to build a building. The architect doesn't decide it. And whether what the patron is going to build the building for is a good idea or not, the architect doesn't question that. Architects don't say to the patron, I don't think you ought to build that building. I don't think you ought to be making money. They don't say those kinds of things. So, the poor little architect wants to eat, and his family wants to eat, so, he says, "Thank you Mr., you're going to take me on like that, and the patron says, "Now my wife would like to live like this, here are some pictures she told me about so we've got to get that in there. And it turns out that the building code says its going to be like that, and the labor union says it's going to be like that, and the patron says I don't want you making any special door knobs, we are going to get our Sweet's catalog so, I said, in the end, he is just a good taste purchasing agent. So, because he's using time savers, and all the standards, and everything, and much of it is getting onto the computers today so he's really just a salesman. The architect gets to be a salesman for his poor office trying here to struggle along this group is coming together of very nice human beings, seeing if they can keep eating. Now, I want you to feel deeply with me. I talk hard this way, because I've been in it so much that I really do know what the values are here, and I do see then that when I talked about what the little individual can do, that he has got to understand these things. He just can't possibly survive out there if he doesn't really understand just what lawyers are doing and what patents are doing you've got to understand that patent world, and you've got to understand what people are up to in their contracts and trying to make you buy things and whatever it may be. You have to be absolutely, have real discriminatory capability out of experience.

And, there, I was thinking, getting very close to something I want to talk to you about possibly something to do with Chrysler or Henry Ford something I left out telling you the other day. It will come. The next time I'm going to interrupt myself where I am and say it.

Also, it's also fascinating the way our brains do work, and about this call up and recall and how to accommodate, the information, you are suddenly being challenged, something new, right in the middle of something. And do you stop talking to people at the table and write it down, or do you it's something to be coped with and particularly if you really are trying to find out how through your own sensitivity, how to accommodate what Nature is trying to do. Because I think we are very much receptors, and, as I say evolution is trying very hard to make man a success, so we all get these little things to think about. And she really means to interrupt, and I've tried to play all kinds of games with myself, so I won't forget what you're saying and yet finish that conversation and get over here. And tonight, I've missed one, and I hope it will come back. I think it will.

Oh. Alright. I, then, gave you W.W.I, the secret weapon was our alloys. This became then, with Henry getting into alloys, and accommodating it by not having any storages it imposed any reason why he shouldn't make a change in the design in a hurry, we have then all of industry catching onto that. So as we enter into W.W.II, everyone of the particularly because of the aircraft but all the great production plants have enormous amounts of alloys, so that aircraft plants, you knew you were going to need a lot of different new alloys of aluminum, and they did all kinds of aircraft. Everyone of these alloys has special capabilities, and as we get into really good design, such as of an airplane, we do get into being absolutely specific on the alloy you have to use. You must really know that strength. You are dealing in everything is strength/weight ratios, and in the air world where you're getting up there in the sky the stress is going to occur. You've got to know just what you're doing. So aircraft plants incredible bins, vertical bins of different alloys of every different type of angle iron, every angle iron of different size, and each one has color-coded for different kind of alloys and so forth. The plants were incredible forests of these alloys in some usable form as you use in aircraft.

Because in the aircraft, you were not getting into mass production, you were going to then, have a special craftsman going to take this piece of metal and going to put it into his lathe, or whatever it is and get it into the next form. We are continually forming, and been forming relatively few parts compared to the automobile game automobile has what they call class a tools they can stamp out l0 million parts. In the aircraft industry we got into, I spoke to you about "soft tooling" which is good for 100 parts, and we're going to change the design pretty soon anyway, so that is enough.

The, I'll be coming to that part and following through with it really very powerfully in a minute. But W.W.II then, gave us this forest of alloys. In W.W.I you didn't know anything about alloys at all, so enormous numbers of experts on those alloys. Research was still going on and so new pieces would come in. As a consequence the engineers designing parts would then, when you get on the production side where you are going to produce the part, you had a great deal of scrap. Furthermore, the engineers had then been told that as you rolled a sheet of aluminum, and at the edge of the rollers there was a completely different pressure from the middle of the area, so you must only use the middle of the area, so they were cutting anything they were going to produce, they would specify that it had to be cut out of the heart of the sheet. The amount of scrap was very great. It got to the point where in car loadings and backlog of cars needed, almost three times as many cars were being used to take scrap away from factories as taking fresh materials to them. Because when you got into the scrap, it took a lot of room. This got to be an incredibly inefficient new aspect of production at the time of W.W.II.

Now, I'm going to, because the next thing I'm going to show you is the Beech Aircraft House that I built in Beech Aircraft, in which was the airplane world. I'd like you to have a strong feeling about things that controlled the conditions under which I came there, and I did make my deal with them only on the basis of using the very best men they had, best mechanics who were absolutely certain of their jobs. And now, with W.W.II looming, the automobile companies had gotten very powerful and very strong, and there had gotten to be a very, very big business and we have war looming, and the this time in 1938-40 as I told you I was Technical and Science Editor in FORTUNE MAGAZINE. I was loaned by FORTUNE in 1940 to write a book on the Chrysler Company. I was loaned to the Chrysler Company to write a book about the Chrysler Company. And one other FORTUNE editor, Larry I can't say it, doesn't make any difference the two of us were loaned to do this job, and it was very much an experience. Because the Chrysler Company, by this time old Walter had died, and you got a very big business world running it, and running it hard, hard as hard could be.