Bennett tried to alter the (remarkably generous) terms of the subsequent contract with the UAW; but Henry’s robust wife, Clara, appalled by the psychological damage the dispute was having on both her husband and her beloved son, threatened Henry that she would leave him if he did not accede to all the UAW’s demands. A shattered Henry Ford duly caved in and signed the agreement. Edsel, however, was now seriously affected by stomach cancer – an illness exacerbated, if not caused, by the stress of being constantly bullied by both his father and Bennett. When Edsel died in May 1943, his father successfully resisted pressure from Washington to relinquish the reins at Dearborn and took back the day-to-day running of the Ford Motor Company at the age of eighty.
Thankfully, not all car tycoons were aggressive bullies in the mould of Henry Ford. The career of Ford’s contemporary, Walter Chrysler, proved that you did not have to be a tyrant to succeed in the automotive industry. Chrysler’s astonishing achievements proved, reassuringly, that nice guys did not always finish last.
Walter P. Chrysler was born twelve years after Ford, in 1875. He started his working life as a locomotive engineer in Kansas, from which humble beginnings he rose to manage the American Locomotive Works in Pittsburgh. However, on a visit to the 1908 Chicago Automobile Show he caught the automotive bug. When General Motors’ James Storrow asked him to come to Flint to run Buick, on half of his Pittsburgh salary, he eagerly accepted. Chrysler remained in office, with substantially increased remuneration, after Durant’s corporate coup of 1915, on condition that he answer only to Durant. However, Durant’s tendency to make snap decisions on his own infuriated Chrysler, who believed himself seriously undermined. In March 1920 he resigned from GM, taking with him $1.5 million in stock options.
Chrysler initially made a name for himself as an industry troubleshooter. In 1920 he was enlisted to save the struggling firm of Willys-Overland and proceeded to shut down uneconomic plants, slash management and other white-collar staff, and move production from Ohio to the suburbs of Detroit, where labour was cheaper. But when, in November 1921, Willys went into receivership (actually a desperate ploy by John Willys to regain control of his company from his banker creditors), the firm decided it could no longer afford Chrysler’s substantial salary.
Finding himself jobless once more, Chrysler decided to launch his own marque. For this he adapted the Detroit factory of the bankrupt Maxwell Motor Company, in which Chrysler had taken a controlling interest in 1921. His first breakthrough vehicle was the Chrysler Six of 1924; adapted from a design Chrysler had begun for Willys in 1920, it was smooth and reliable, a fusion of European quality with American ruggedness. The model’s success enabled Chrysler to convert Maxwell Motors into the Chrysler Corporation in 1925; three years later he bought up the bankrupt Dodge Brothers Company, which he intended to use as the basis for an ambitious challenge to the mighty General Motors brands.
John and Horace Dodge started in the automotive business by making transmissions for Olds and Ford. But by 1913 John Dodge was claiming that he was ‘tired of being carried around in Henry Ford’s vest pocket’, and in 1914 they began production of their own car: a tougher, larger version of the Model T, the Model 30. This car acquitted itself well in the Mexican War of 1914, and earned celebrity status in a well-publicized raid at Sonora, in which a Lieutenant George S. Patton led ten soldiers and two civilian guides into battle in three Model 30s – and returned with three dead Mexicans (including revolutionary leader Pancho Villa’s key adviser) tied to the bonnets of each Dodge. In 1920, however, both Dodge brothers died, John from pneumonia, Horace from cirrhosis. Without their guidance, by 1928 their eponymous company was on its last legs and was duly bought up by the ambitious Chrysler. Existing Dodge models were retained, although in 1930 Dodge cars lost their ‘Brothers’ suffix. Inventing two new marques – the low-priced Plymouth and a more upmarket brand, De Soto – Chrysler expanded his firm’s operation to become a mirror of GM’s, with each Chrysler brand – Plymouth, Dodge, De Soto and Chrysler – directly competing with a rival GM division.1
Not every Chrysler product was a success. The streamlined Airflow of 1934 was not only daunting-looking but was equipped with an unreliable engine, and proved a disaster in the marketplace. It was not designed by stylists but was the work solely of Chrysler’s engineers, and it showed. Looking heavy and bloated, with tall doors and small windows, the Airflow hardly suggested power or speed. Public relations stunts involving Airflows being thrown off cliffs probably did little to help sales; GM’s exultant publicity department merely bought space to denounce ‘ill-timed’ or ‘dubious’ experiments. But Chrysler was now buoyant enough to shrug off such failures. In 1936 the company overtook Ford as America’s second largest car maker – ironically, just as Ford launched their own streamlined car, the Lincoln Zephyr.2 The Airflow saga did at least convince Chrysler that he needed to pay more attention to styling, as GM was doing.
By 1939 Chrysler had captured 20 per cent of the US automobile market and was regarded as one of the American automotive industry’s Big Three, alongside GM and Ford. Only in the nadir of the Great Depression, in 1932, did the energetic new combine fail to make a profit. The low-priced Plymouth marque helped the firm through the Depression years (by 1933 Chrysler’s Plymouth division accounted for half of the company’s sales), as, too, did Walter Chrysler’s own irrepressible optimism. The lofty mast of William Van Alen’s astonishing Art Deco masterpiece, the Chrysler Building in New York – built in 1928–31 and paid for out of Chrysler’s own pocket – publicly testified to Walter Chrysler’s hubris and success.
Chrysler’s boss was no monomaniac in the mould of Ford or Morris. He was popular on the shop floor, and never attempted to micromanage or undermine his senior managers, as was common at Dearborn and Cowley. As early as 1926 Chrysler began grooming K. T. Keller, a workaholic engineer who had begun his working life at Westinghouse in Pittsburgh in 1906 and whom Chrysler had lured from GM to become his general manager, to succeed him when he retired. And as he grew older, Chrysler increasingly spent much of his time in the opulent home he had built for himself – a house that was not located close to Detroit, where most his fellow car makers tended to congregate, but in far-off Cambridge, Maryland. There Chrysler hunted and sailed, played the piano or the cornet (he was a natural musician), drank (he was instrumental in the successful campaign to repeal Prohibition, to which he lent both his voice and his money), and womanized. Showgirls were a particular passion for Chrysler: in the late 1920s he fell madly in love with the notorious actress and gold-digger Peggy Hopkins Joyce, while she was married to the first of her six husbands. When Chrysler did emerge from his Maryland home, it was more often than not to inspect the rising storeys of his Chrysler Building in New York rather than to inspect any of his automotive plants.
In 1935, as he always had said he would do (and as Henry Ford had repeatedly refused to do), Chrysler retired, passing the presidency of the firm to his protégé, Keller. When Chrysler died of a stroke, on 18 August 1940, there were no crocodile tears at his funeral, as there were to be for Henry Ford seven years later. Both his employees and the general public seemed genuinely distressed at the passing of this generous, irrepressible and multi-talented American.
Looking at the soaring spire of the Chrysler Building today, or indeed at Ford’s massive global headquarters at Dearborn, it is difficult to imagine that there was anyone in the global car industry who had achieved more. Nevertheless, it is clear in retrospect, even if it was not wholly evident at the time, that the considerable accomplishments of Walter Chrysler and even of Henry Ford were eclipsed by the outstanding successes of the quietly spoken man across town who sat impassively at the helm of General Motors. Perhaps the most influential and successful of all the twentieth century’s automotive tycoons, Alfred P. Sloan was the man who, even more than Henry Ford, can be said to have created the modern auto business. He ruled General Motors with a rod of iron for over thirty years, and under his direction GM became the large
st, most successful and profitable, industrial enterprise the world had ever known. Yet, in contrast to Ford and Chrysler, today he is a largely forgotten figure, even within the car industry.
Alfred P. Sloan was no greasemonkey or groundbreaking engineer in the vein of Henry Ford. The first of the motor industry’s all-powerful ‘grey men’, Sloan was born only a month after Chrysler; but he came from a very different background, one dripping in money and privilege. Having joined the Hyatt Roller Bearing Company of Harrison, New Jersey, after graduating from MIT, he found himself its president when his father rescued Hyatt from bankruptcy. Sloan was careful not to present the image either of an irresponsible enthusiast, like Durant, nor of a despotic bully, like Ford. Readers were quick to identify the car maker hero of Sinclair Lewis’s 1929 novel Dodsworth with Sloan, but in truth Lewis had made Alex Kynance in the image of the schoolboyish Billy Durant.
After Pierre DuPont had ousted Durant from the presidency of GM in 1920, it was DuPont who drew the ire of GM dealers and Durant sympathizers across America. But it was Sloan who was effectively running the company, and Sloan to whom, in 1923, DuPont formally handed control of the growing combine. Sloan then proceeded to dominate the car giant until his retirement as chairman in 1956 – a reign of thirty-three years.
After 1923 Sloan, safe in the backing of the company’s principal shareholders (still led by DuPont), proceeded to remodel GM’s structure in accordance with sound business principles. One of his first acts was to hire Ford’s cast-off number two, William Knudsen, to run Chevrolet, GM’s premier brand. Knudsen was a shrewd acquisition; his people skills had something of Durant about them, and he forged valuable relationships with dealers and plant workers – the sort of relationships that were beyond the retiring, academic DuPont or the cold, calculating Sloan.
Alfred Sloan’s General Motors was far more businesslike than Durant’s restless, cobbled-together creation. It was Sloan who introduced the policy of refreshing its models every year, in stark contrast to Henry Ford’s stubborn reliance on the Model T. In 1925 Henry Ford, having blamed his dealers for the pronounced loss of market share to GM’s Chevrolet division (they were, he raged, all ‘fat and lazy’), denounced Chevrolet for bringing out new cars every year: ‘We want the man who buys one of our products never to have to buy another. We never make an improvement that renders any previous model obsolete.’ Under Sloan’s direction, GM’s multiple brands were matched with every definable market category, in contrast to Ford’s outdated credo of doing just one thing well. Every year GM models were rejuvenated and relaunched, having been equipped with whatever new technology was affordable. In 1912 Cadillac introduced the electric starter; and by 1920 all GM cars had acquired hydraulic brakes for all four wheels, along with enclosed bodies and quick-drying pyroxylin varnishes, which enabled them to be offered in a wide variety of colours, not just Henry Ford’s ubiquitous black. In 1928 a Cadillac car introduced synchromesh, while in 1934 all of the GM range, from Cadillac down to Chevrolet, offered independent front suspension.
In marked contrast to Henry Ford, Alfred Sloan was keen to promote technological advance as well as aesthetic development in his cars. In 1919 he hired the gifted engineer Charles Kettering, who had invented the electric starter motor, to run GM’s industrial research laboratory, a facility that by 1939 was enjoying a vast annual budget of $2 million. In 1927 he engaged Harley Earl as the first chief of a new ‘Art and Color Section’, effectively GM’s design studio. Earl’s designs not only transformed the look of GM’s cars, but changed the way cars were regarded by both manufacturers and customers. No longer were autos to be mere utilitarian objects, as the plain old Model T had been; now they were objects of beauty, envy and power.
The annual model update that Sloan promoted was not cheap. Sloan himself estimated that it cost GM $35 million to remodel its cars every year, in an effort to instil the principle of ‘planned obsolescence’ into its customers. (In 1955 Harley Earl declared: ‘Our big job is to hasten obsolescence. In 1934 the average car ownership was five years; now it is two years. When it is one year, we will have the perfect score.’) But Sloan believed it was worth it – provided, of course, that existing GM customers upgraded to GM cars. The high cost of the annual process also dissuaded smaller car makers from imitating GM; most of them, if they tried, went bankrupt. And Sloan’s dictum that every model needed a complete redesign every three years also made engineering and economic sense, since many of the car’s original machine tools would have worn out by then and needed replacing anyway.
Sloan’s greatest achievement, alongside the introduction of the annual upgrade, was to seek to cater for almost all customers within one company – a strategy predicated, once again, on the assumption that car buyers, once hooked, would not buy outside the GM family. Sloan’s hierarchy of GM divisions made sense of Durant’s jumble of competing companies. None of GM’s marques was to duplicate another; the customer would gradually ascend the five steps of GM’s brand ladder, trading up each time. The first-time buyer would, ideally, buy a downmarket Chevrolet, and then graduate via a more superior Oldsmobile, to a Pontiac, a Buick and, it was hoped, eventually to that ultimate American status symbol, a Cadillac. Yet every rung on the ladder was to be clearly differentiated. As Sloan himself later wrote: ‘Each line of General Motors cars produced should preserve a distinction of appearance so that one knows on sight a Chevrolet, a Pontiac, an Oldsmobile, a Buick or a Cadillac.’ All of the five divisions overlapped a little, since Sloan wanted to promote a degree of internal competition, but he ensured that the heads of the ‘GM Five’ met frequently with him and his key managers to iron out any potential confusions. He also ensured that each division had a Fisher body plant (a company that GM eventually bought outright) sited conveniently next door.
Even Ford knew Sloan was right. In 1939 Edsel Ford finally persuaded his father to mimic Sloan’s brand ladder by introducing a new mid-priced marque called Mercury. Customers were not fooled, however. Ford was too mean to launch a wholly new brand, and early Mercurys looked little different from the bargain-basement Fords to which they were supposed to be significantly superior. Ford never grasped Sloan’s basic business philosophy: do it properly, or not at all.
Alfred Sloan, while far from being a natural salesman in the Durant mould, also recognized the importance of advertising and marketing. He was the first car maker to encourage his dealers to offer trade-ins and payment credit (soon known as ‘hire purchase’). He invested heavily in advertisements and public relations – again, unlike Henry Ford. Yet he was no believer in the inherent wisdom of the market. For example, he subtly exploited GM’s industrial might to cross-subsidize his upmarket Cadillac and Buick divisions during the Depression, with the result that Cadillac was one of the very few upmarket brands to survive.
Countless luxury and sports car makers perished during the 1930s, no matter how impressive or revolutionary their products. Gordon Buehrig’s impressively aerodynamic Cord 810 was the fastest American car on the road, set a land speed record of 107 mph, and was promoted by film star Sonja Henie. But the impressive qualities of the 810 did not prevent Cord from going bankrupt in 1937 – joining Stutz, Duesenberg and other famous American luxury marques on the scrapheap. Sloan was determined that his premium Cadillac brand should not go the same way. While American luxury auto sales plummeted from 150,000 per year in 1929 to barely 10,000 in 1937, Sloan kept Cadillac afloat (much as Arthur Sidgreaves was doing across the Atlantic with Rolls-Royce). Sloan lowered the prices of all GM’s cars – something that small producers like Cord could not afford to do – and thus kept sales and market share, if not income, relatively buoyant. Sloan did not suddenly have to switch to making cheaper, smaller cars, as Packard was now attempting to do; GM’s Chevrolet division already made inexpensive cars that had a large and loyal following. What Sloan was prepared to do was to use the same basic body for his Cadillacs and for the bigger Buicks, thus saving tooling and production costs. As a result, GM’s luxury
marque was one of the few exclusive American automobile names to be still in business at the end of 1930s.
Sloan additionally acknowledged the importance of export markets. As he was to note in his (ghosted) autobiography, always the question was not whether he should or should not export, but ‘whether to build up our own companies or to buy and develop existing ones’. Sloan invariably plumped for the latter. In 1919 he targeted the new Citroën concern in France, but withdrew on judging that the ambitious new car maker’s management was ‘weak’ (an epithet Sloan employed for most auto makers’ managements other than his own and Ford’s). Five years later he almost bought Austin of Britain. Then, to everyone’s surprise, GM bought the modest British firm of Vauxhall of Luton, a luxury car maker that up until 1925 had – strange as it may seem now, in the days of the Vauxhall Astra – sought to compete with Rolls, Bentley and Bugatti. Vauxhall had been limping along in the slow lane under the benign but hopelessly amateur leadership of Old Etonian Leslie Walton. Overnight, GM changed Vauxhall’s corporate strategy completely, remodelling the firm to concentrate not on the sort of luxury cars that Walton had liked to own but on profitable smaller cars and light trucks. With GM’s technical know-how behind the company, Vauxhall introduced the first synchromesh gearbox to Britain, in 1931. Two years later, Vauxhall launched its first successful small car, the Light Six, and began to make money for GM.
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