Reckoning

by David Halberstam

  The greatest mistake that anyone could make was to confuse the rowdy Henry Ford of the night before—the Henry Ford who in the very same sentence introduced himself to a young lady and suggested that they spend the night together—with the hard-eyed man at his desk the next morning. For the carousing buccaneer was in no small part a device, a way of disguising the fact that he had been born to his position, that he was the head of the Ford Motor Company by right of primogeniture. He had chosen a style that said, I’m one of the boys, I could have made it from the bottom, and I’m just as rough and tough as anyone on the line. In fact he was an aristocrat born and an aristocrat raised. He was very much his mother’s son, and his mother believed fervently in good manners and good behavior. When he summoned his manners, they were, indeed, very good. As a boy he was told to write thank-you notes for gifts, and as a grown man he still sent graceful handwritten notes to people thanking them for favors. As a boy he was told to keep his room neat, and as a man he could not stand personal messiness. For all his bluster and crude language he spoke excellent French, and he had an exceptional eye for art and perhaps an even better one for English country antiques. He might be good at trooping the line among the workers at a Ford plant in the Midwest, and he might deal well with his peers in the world of business (in truth he thought he had no peers; most companies were too small, and the ones that were big were run by colorless managers who did not own them), but his real pleasure was spending time first among the American gentry and later among the beautiful people of Europe.

  The swashbuckler comportment, then, was more style than substance. It was true that in his personal life there was a considerable amount of audacity and bravado, that he loved to live high, and that he enjoyed breaking conventions. But at the same time his professional manner was very careful, and he became steadily more conservative. Under the mounting pressure upon the modern American industrialist (increased labor costs, increased governmental regulation, increased consumer sensitivity, increased competition), he was ever more cautious. Much of his energy went into not making mistakes. The longer he ran it, the more conservative the Ford Motor Company became.

  11. THE WHIZ KIDS

  CHARLES BATES THORNTON WAS a striking new kind of American success story, a man with a childhood worthy of Horatio Alger but also with the most modern vision for postwar American management that one could imagine. He was born in Haskell, Texas. His father had made fortunes and lost fortunes running a fire-fighting service for oil-well owners. He had abandoned his family when his son was an infant. His wife took over the raising of the family. She instilled in her son a strong sense of enterprise; he was to have odd jobs, she decreed, and to save money from them, not squander it. So he did, starting to save at the age of twelve and buying forty acres of land by the time he was fourteen. That set a pattern. He was running a service station by the time he was in Texas Tech. He then moved to Washington, so he could work at the Department of the Interior during the day and go to George Washington University at night. When he graduated he stayed at Interior. There, in the late thirties, he happened to do a report on low-cost federal housing. It was seen by Robert Lovett, then assistant secretary of war for air, who was eager to bring modern management techniques to the pathetically understaffed prewar Army Air Corps. Lovett, a prime architect of American preparedness, immediately understood that Thornton had a new and special talent—he knew how to draw information from seemingly aimless and unconnected statistics. He quickly signed up Thornton as an air corps lieutenant. At the start of World War II, Thornton, at Lovett’s request, put together a team of brilliant young statisticians whose assignment was to bring order and direction to what was becoming in effect one of the world’s largest corporations.

  For his staff, Tex Thornton wanted only the best. Selections were made in the simplest way: The brightest graduates of the nation’s business schools were sent to Officer Candidate School. Then the two top people in every OCS class were sent to Harvard Business School for a special two-month course in the use of statistics, and the two brightest people in each class at the business school were plucked out and sent to work for Thornton. Arjay Miller, who later headed the Ford Motor Company, thought it the fastest possible way to select the most talented people for a powerful new professional discipline. The premise behind it all was that this vast, new, mechanized war was as much about production and allocation of resources as it was about combat bravery, and the best brains should be applied to that challenge. Thornton’s group of talented young management executives developed a system of statistical control to bring rationality to decisions about military production. By their control of numbers they could decide what was needed where and how best to get it there.

  When the European war was ending, for example, Thornton’s team studied whether or not it made sense to move the B-17 bombers from Germany to the Pacific. To the surprise of the military their studies showed that it was more cost-effective to leave the B-17s in Germany and build more B-29s for the Pacific. Moving the B-17s from Europe, they found, would be more expensive than anyone had imagined, and the planes lacked the flying range needed for the great distances in the Pacific theater of war. Most senior officers regarded this recommendation as sacrilege: These costly planes, which had proved so valuable, would now sit on airfields and go to waste. But on the estimates of these very junior, very confident young men, this and many other such critical decisions were made, decisions that often placed the young statisticians against experienced and venerated combat veterans.

  The Whiz Kids formed an odd little group inside the Pentagon, and some of the regulars had a hard time with them. They were young, after all; none of them had ever heard a shot fired in anger, and yet their word seemed like law. Once one of the youngsters, Arjay Miller, walked into a general’s office with his jacket off. The general, who was probably twenty years older than Miller, did not see his insignia and immediately snapped to attention. “It’s all right, general,” Miller said. “I’m only a second lieutenant.”

  Those years made all of them see that a powerful new professional discipline was being born—that there were great possibilities for the use of statistical control systems in peacetime production. Peacetime application might prove even more effective, for then they would not be hindered by the enormous bureaucracy of the U.S. military. To many young men the war had been filled with lessons in doubt; to this group it had been one great lesson in truths. It had taught them that a business enterprise could be made to operate rationally on an immense scale. As the war drew toward an end, they talked endlessly among themselves about their future. Encouraged by their success in the Pentagon, sensing as few in America did the possibilities in their skills, Tex Thornton and his team decided that when peace came they would sell themselves as a group. They would seek some needy company; it did not seem to matter too much which one, although the weaker the company the better the chance to exploit en masse their teamwork and expertise. Their connection was to each other and to their particular skill, not to any one industry.

  They thought briefly of forming their own company to do the most modern kind of market research, along the lines of A. C. Nielsen. But that required some $3 million in start-up money, and none of them had any money. For a time they centered their interest on Alleghany, a seriously troubled holding company, and they almost went there. Indeed, Alleghany made them an offer and gave them a week to decide. On a whim, and because one of them knew an executive at Ford through family connections, they decided to try Ford as well. They were convinced that no company in America needed them more than Ford did. In many ways it was a wreck after fifteen years of the old man’s madness. So they sent Henry Ford II a cable, which in retrospect some of them thought quite impudent. In effect it said: TERRIFIC YOUNG MANAGERIAL TEAM READY TO MODERNIZE AND SAVE YOUR COMPANY. They were young and talented and sure of themselves. Thornton, their grand old man, was all of thirty-two.

  Henry Ford was immediately interested. The inheritor of the shell of a once-g
reat industrial enterprise, he desperately needed not just talent but allies. He invited them to Detroit and had John Bugas, the former FBI man who was his only trusted aide, meet them and look them over. Later, at a meeting they had with both Bugas and Ford, Bugas turned to his boss and said, “Well, Mr. Ford, if you want to hire these people—” Ford cut him off. It was clear that he had already made up his mind to hire them.

  “What do you think of them?” Ford asked Bugas when they were alone.

  “They’re all smart, almost too smart,” Bugas replied. “They want about twelve thousand each, but I think we can get them for ten.”

  “Pay them the twelve thousand,” Henry Ford said, and the Thornton team was hired. Secretly Henry Ford had hedged his bets. Unbeknownst to the young men, he was also bringing in a complete management team from General Motors under Ernest Breech. There were, in fact, people at GM who believed that Ford was getting a brighter executive group in the one headed by Breech than the one that was taking over GM.

  The coming of the Whiz Kids, as they came to be known, was an important moment, for it reflected a major change about to take place in many American companies. These eager, able young men were not car men. They were not, like those who had gone before them, rooted in the business itself, lured to it by love of mechanical devices or by the excitement of making something. Nothing, indeed, could have been more alien to them. The Whiz Kids were the forerunner of the new class in American business. Their knowledge was not concrete, about a product, but abstract, about systems—systems that could, if used properly, govern any company. Their approach was largely theoretical, their language closer to that of the business school than the auto assembly line. Some of them, in fact, like Robert McNamara and J. Edward Lundy, had taught at universities before the war and had planned to return to them after the war.

  Ordered to punch time clocks like hundreds of thousands of Ford employees before them, they rebelled. They made very clear to their superiors that they were eager to go to work, they were in pursuit of dazzling careers, they would labor twelve and fourteen hours a day, but they would not punch a time clock to justify their actions or certify their whereabouts. They were beyond that, for they were the new class. To them their not punching a time clock was a statement of purpose; to others, who knew the company better, it seemed more a statement of class.

  Within the company they were feared and resented from the start. They went everywhere and pried into everything, asking endless questions. (Their earlier nickname was not the Whiz Kids but the Quiz Kids.) They perplexed old-timers with their combination of innocence and intelligence. A little more than a year after they had arrived, Jack Reith, one of the group, turned to an assistant and, obviously irritated by some decision, said, “In all my thirteen months I’ve been in this business I’ve never seen anything like this.”

  Tex Thornton, upset about the hiring of Breech, soon left the company to work for Hughes Aircraft. “He wanted his bite out of the apple too soon,” Lewis Crusoe, one of his rivals from the Breech group, said later. As befitting a true son of Horatio Alger, Thornton left Hughes in 1953 and, after borrowing $1.5 million, founded Litton Industries, one of the nation’s first conglomerates. A little more than a decade later it made $1 billion in sales. Tex Thornton was not a man to look back.

  From the moment of Thornton’s departure it was clear that Robert McNamara was the driving force of the group, the Whiz Kid most likely to succeed. It was not just ability, though his ability was immense; it was his relentless ambition. Even among the Whiz Kids he stood out as wanting success much more than the others. At first no one was exactly sure why he wanted it, for he seemed indifferent not just to cars but to money. But he wanted it, and his ambition was manifest.

  No one in the Ford Motor Company had ever seen anything like Bob McNamara before. He was at once a man who very soon knew everything quantifiable about the business and who had absolutely no feel for it. Gradually it became clear what drove him, an almost missionary belief in the tightness of what he was doing. He was pioneering a new kind of economic and managerial philosophy that would make Ford a better company and, by setting that noble example, make America a better country and the world a better planet. But it subtly became apparent that this was not all that drove him. There was also power. Power would elevate not just his vision but himself. He sought truth, but in searching for truth he sought power as well.

  In the world of Ford he quickly and deliberately marked himself as a man apart. Where others were extroverted back-slappers, he was cold and distant. He shunned small talk. Small talk wasted time and encouraged intimacies. Intimacies were unwanted; they involved emotion and thus made rational decisions harder. The people above him, Breech, Crusoe, Del Harder, the manufacturing man, were always Mr. Breech, Mr. Crusoe, and Mr. Harder. He was always eager to please them, always ready not just with an answer but with a factual answer, because he knew they’d like that. “You know that son of a bitch always has an answer,” Lee Iacocca once told Don Frey, a Ford executive, “and it always sounds so good—but you know, I checked some of it out after a meeting, and some of it is really bullshit. Stuff he just made up. But he always sounds good.” Overly respectful, almost obsequious with his superiors, he was often brusque, almost rude, with his subordinates unless they were his protégés—themselves scions of the business school, young men who shared his vision. Those who could articulate the issues as he would have them articulated rose in the company. Those who could not speak to him in his language felt his contempt. Those who crossed him instantly regretted it.

  His style at work was different from his manner after hours; off duty he could be congenial and even outgoing. It was his way of saying that friendship and old-boy connections meant nothing; only facts were important, and their truth must be served. He seemed particularly distrustful of those who, in their presentations, cited their experience, their many years in the auto business, and who talked of the way things had always been done. Experience to him was not just expertise, it was more than likely to be bias as well. McNamara sought rationality in an irrational world, and if he had had his way he would have manufactured and sold only rational cars. If other men in the company took their pleasure from designing cars, or from making a better, more sophisticated part, or from turning a paper design into a metal reality, he took his pleasure in his numbers. Numbers were not just a belief but more like a theology to him. Cars themselves were almost secondary. During his ascent to power, when he was general manager of the Ford Division—the section that made the cars called Fords, not Lincolns or Mercurys—he had come in one morning and given Don Frey, who was then one of his top product men, a piece of paper. It was a church leaflet with penciling on the back; McNamara, Frey gathered, had been daydreaming in church. The penciling described a car. But it was not a sketch of what the car should look like, or a statement about how it should handle, or a notion about what group of customers it should appeal to. It was a series of statistics—what the car should weigh and cost.

  “Bob,” Frey finally said, “you’ve got everything down except what kind of car you want.”

  “What do you mean?” McNamara asked.

  “Well, do you want a soft car, a hot, sexy car, a comfortable car, a car for the young, or a car for the middle class? Whose car is it, what does it feel like?”

  “That’s very interesting,” McNamara said. “Write down what you think is right.”

  Deviations from the truth of numbers bothered him. Numbers should be true. In 1959, when Ford was in the final stages of producing a car called the Falcon, a man named Jack Hooven had a terrible time with McNamara. Hooven was in charge of testing the prototypes on the tracks, and the numbers he was giving McNamara for gasoline mileage varied from test to test. This enraged McNamara. They had designed the Falcon to give a certain mileage, and the mileage should be exactly that figure, every time. Hooven tried to explain to McNamara that there were always variations, in the wind conditions, among the drivers, and among the cars the
mselves. But McNamara was insistent; they had graphs and charts, and the numbers should come out right. Logic and math demanded it. Hooven tried to reply that cars were not entirely logic and math, cars were cars, but McNamara brushed him aside, and Hooven returned to his shop thoroughly beaten. He could not really fight back, because he had no weapon, no equal truth with which to counter this onslaught. What saved him was a bright young man working for him named Jerry Greenwald. Greenwald had a background in finance, and he knew what was happening. He suggested to Hooven, “Why don’t you do the testing, and then, when it’s done, I’ll go in a corner and smooth over the numbers a little? That should bring it near what he wants.” Greenwald smoothed over the numbers, and Hooven brought them to McNamara, who beamed. The Falcon was performing as he would have it perform—true to him, true to his numbers.

  The coming of McNamara to the Ford Motor Company, his protégé Lee Iacocca once said, was one of the best things that ever happened to the company, and his leaving it, Iacocca added, was also one of the best things that ever happened. McNamara seemed to embody the strengths and weaknesses of the new class. He was clearly the ablest of his group and the most ambitious as well, and certainly the most politicized, the first to turn his power with numbers into power within the company. He brought discipline to the accounting system—if old Henry’s intentional chaos could be called a system—and throughout Ford he imposed order on the most disorderly processes imaginable. He and his colleagues, in short, harnessed the worst-run large company in America. Before the Whiz Kids arrived, waste and petty profiteering were a way of life at Ford. McNamara did more than cleanse the company, he purified it, although whether or not purification is good for an automobile company became a question that haunted it some twenty years later.