My Years With General Motors

by Alfred P. Sloan Jr.

  The air-cooled engine offered an attractive prospect. It would get rid of the cumbersome radiator and plumbing system of the water-cooled engine and promised to reduce the number of parts in the engine, its weight, and its cost, and at the same time to improve engine performance. If it fulfilled all these promises it would indeed revolutionize the industry. But it is a long way from principle to reality in engine design; one has only to observe the years and engineering man-hours taken to develop practical jet and rocket motors, or to note that the water-cooled internal-combustion engine had come to its 1921 level of efficiency after constant development by an entire industry since the late nineteenth century. Nevertheless, though he had been at it only a short time, Mr. Kettering's convictions regarding his new air-cooled engine were optimistic; and he had then a very considerable reputation in the automotive field because of his pioneering work on the self-starter and ignition and fighting systems, and in the aviation field where he was so far ahead as to have experimented with a pilotless plane.

  Mr. Kettering came before the Finance Committee on August 7, 1919, to explain the work he was doing on the air-cooled engine and on fuel research—to result later in tetraethyl lead for gasoline (ethyl gas)—at the Dayton Metal Products Company and the Dayton Wright Airplane Company. I had some part in the preliminaries of this meeting. I had known Mr. Kettering since 1916, when his Dayton Engineering Laboratories Company came into United Motors, and had kept in touch with his work. On the day before the meeting of the Finance Committee, Mr. Kettering had met with Harold E. Talbott, president of Dayton Metal Products Company, Mr. Haskell, Mr. Raskob, and myself to work out arrangements for General Motors to purchase the assets of the Dayton companies-Domestic Engineering Company, Dayton Metal Products Company, and Dayton Wright Airplane Company. The thing was wrapped up at the committee's meeting of August 26, 1919. There Mr. Durant and Mr. du Pont reported on the Dayton situation, saying, "that Mr. Charles F. Kettering ... is the center of this situation; that the obtaining of Mr. Kettering's entire time and attention is of prime importance, it being desired to place him in charge of the new Detroit laboratory . . . and that in the opinion of Mr. Durant, Mr. Haskell, Mr. Sloan, Mr. Chrysler and others Mr. Kettering is by far the most valuable man known to this Corporation for the position . . ." The Finance Committee minutes then say:

  The Committee was advised by the President [Mr. Durant] regarding the air-cooled engine which is being developed by the Dayton Metal Products Company and the possible future thereof, it appearing that this invention has as yet not progressed to the point where its success is absolutely assured but that its chances of proving successful are favorable and that in this event our investment will provide a splendid financial return.

  So it was that we got Mr. Kettering's services, the Dayton properties, and the air-cooled engine; and a good deal of General Motors' history was set in motion.

  More than a year went by and much water went under the bridge, as I have related. On December 2, 1920, shortly after Mr. du Pont became president of General Motors, Mr. Kettering reported to him: "The small air-cooled engine of the Ford type is now ready to push toward a production basis." Mr. Kettering suggested that a few cars be made and tested, and that if they were satisfactory a number of cars, 1500 or 2000, might be made ready for the market in 1921.

  A few days later, on December 7, 1920, a party of us made a trip to Dayton to look things over there. Pierre S. du Pont, John J. Raskob, J. A. Haskell, K. W. Zimmerschied, who was general manager of Chevrolet, C. D. Hartman, Jr., secretary of the Finance Committee, and myself, went down together. On the train to and from Dayton we discussed a number of things, among them the air-cooled engine. A record of the discussion says:

  After careful consideration it was the consensus of opinion that the new car being developed at Dayton should be tested in adequate numbers and under the most rigorous conditions before undertaking to exploit the type in any degree. When satisfied as to the merits of the product, it will be adapted for the Chevrolet line, and will replace the present 490 model.

  The "490" was then the standard lower-priced Chevrolet in our line, potentially though not then actually competitive with Ford. The question of a new engine for it was a big thing, conceivably a decisive one for General Motors in the high-volume market.

  It is not surprising, therefore, that on January 19, 1921, at one of its earliest meetings, the new Executive Committee agreed upon making a comparative study of the air-cooled engine and the existing water-cooled Chevrolet "490." It was the consensus of the committee that no material changes in the "490" were possible for the next model year, beginning in the autumn of 1921, "and that it would be well to await future developments in the air-cooled engine before deciding upon the changes to be made for the production year beginning August 1922." Thus we decided to "await" the air-cooled car and in the interim to do nothing to develop the old, water-cooled "490" model. I say "we decided," for the Executive Committee always made decisions as a body.

  Two weeks later we moved to a firmer position, resolving "that it is our intention that the air-cooled engine be developed first for a low-priced car and that it be made in the Chevrolet Division, and that Messrs. Kettering and Zimmerschied be informed of this opinion." This was virtually an order, and so far as Chevrolet was concerned the die was cast.

  In another two weeks the Executive Committee expanded its position with a proposal to take a second car, the Oakland, into the air-cooled program with a new six-cylinder engine. The Executive Committee, however, noted "great uncertainty" within itself on the question and ordered a report on it from the Advisory Staff, of which I was then the head. If I am not mistaken in memory, the "great uncertainty" among the four of us on the committee was mainly in my mind. This will become clear later. But the committee was led with a firm hand by the president, Mr. du Pont. He pressed for the air-cooled program, upon the advancement of which he had by this time set his mind.

  Another week later, on February 23, 1921, at a meeting from which I was absent, the Executive Committee moved on quickly to new decisions : "It was assumed," the minutes say, "that the 4 cylinder air cooled car now under study and development would occupy the lowest price field; that second to this would be a 6 cylinder air cooled car, selling in the neighborhood of $900. to $1000." Mr. Kettering was ordered to "proceed with the design and construction of the 6 cylinder air cooled car." But, the committee said, "no quantity production should be attempted until success had been established, by a thorough test of a few [trial] cars." Mr. Kettering, who was present along with Mr. Mott and Mr. Bassett, said he expected to know the merits of both cars by July 1, 1921, and that preparations for the manufacture of the air-cooled "4" could be started on August 1 with a view to bringing out the car about January 1, 1922. Mr. Zimmerschied of Chevrolet was called in and told about the program for his division. He demurred, saying he desired to prepare for production of the air-cooled "4" in August 1922. He said he had improved the water-cooled "490" and had designed a new body for it. The Executive Committee and the Chevrolet Division were thus revealed as moving in different directions.

  Mr. Kettering had test cars of both types in operation in Dayton in May 1921 and reported that either the "4" or "6" could be first to come out. On June 7 the Executive Committee agreed that a small manufacturing section—a kind of pilot operation—should be created at the General Motors Research Corporation (later called our Research Laboratories) in Dayton, with a maximum production of not more than twenty-five cars a day.

  About this time Mr. Zimmerschied's reservations regarding the air-cooled Chevrolet crystallized, and the divisional problem, so to speak, thereby came to the foreground, where it was to remain for some time. Circumstance had dictated that Buick, which was doing well, should be left for the time being more or less in its former, wholly decentralized state, and with its own program. But notwithstanding our concept of organization and directly contrary to it, expediency was permitted to centralize the affairs of other divisions. This
trend was made emphatic by the decision of the top officers to impose a radical car design upon two divisions, Chevrolet and Oakland. The Executive Committee thus made both the policy and the program for these divisions on the most significant question that can come before a division, namely its engine and car design. The Executive Committee had that privilege, and in the circumstances it elected to exercise it. The difficulty lay not only in the question of whether the decision regarding the new car was sound, but in how to get it carried out where it had to be carried out, namely, in the divisions. In extenuation of what was done, I should say that this was the first time, to my knowledge, in the history of General Motors that intimate co-operation was called for between the Research Corporation and the divisions on an important problem, and no established means existed by which this co-operation was to function. Since the initial production as well as the creation of the design was assigned to Mr. Kettering's research group in Dayton and the actual mass production was assigned to the divisions, the responsibilities were blurred. Mr. Zimmerschied wanted to know who was adviser to whom on production: Research to the car division or the car division to Research? Even if there had been no question as to the merits of the new design, this would have represented a problem in management. As it was, there was skepticism at Chevrolet about the new engineering design, and anxiety at the Dayton laboratories that the car divisions would change the design. Divisional engineers and the general managers traveled back and forth between their home bases and Dayton, and in the course of these visits Mr. Kettering observed that George H. Hannum, general manager of Oakland, was more sympathetic to the new car. Mr. Kettering also thought that he could have the air-cooled "6" ready for Oakland by the end of the year.

  I was in Paris during the first part of July 1921, and on my return all four of us on the Executive Committee again traveled together to Dayton, arriving there on July 26. We met informally with Mr. Kettering and Mr. Mott, who was then group executive for the car divisions. Mr. Kettering's enthusiasm for the new car was stronger than ever: ". . . it is," he said, "the greatest thing that has ever been produced in the automobile world." Mr. du Pont left no doubt of his faith in this judgment. Mr. Kettering again noted the differences between the attitudes at Chevrolet and Oakland. Naturally he was anxious to work more closely with the division that expressed the greater sympathy, namely, Oakland. A transcript of the meeting in Dayton says: "It was finally recommended that the 6 cyl. car be pushed ahead and that the 4 cyl. car be held up for the time being as it was felt that they could profit by their experience on the '6' when producing the '4' . . ." Mr. Zimmerschied of Chevrolet, it was believed, could be sold on the air-cooled "4" engine after the validity of the "6" was established. Chevrolet anyway, Mr. Mott said, had an inventory of about 150,000 "490's" which still needed to be liquidated.

  This temporizing attitude toward Chevrolet was not permitted to last long. A few weeks later Mr. du Pont presented to the Executive Committee a general review of the product situation in General Motors with proposals for a definitive corporation program. He reaffirmed the decisions regarding the air-cooled "6" for Oakland. When he came to Chevrolet, he wrote: "It [the 490'] is not to be continued in production beyond the time necessary to reduce inventories and commitments. Immediate decision upon a new car for permanent manufacture is necessary." The air-cooled "4," he said, was to be "the adopted standard for the Chevrolet Division unless a definite change of policy should be made," and it should be ready for production before May 1, 1922. The Executive Committee as a body concurred.

  The development work on the new engine continued at Dayton through the fall of 1921, and at the same time studies were made concerning new plants, conversion of plants, and marketing programs for the air-cooled cars. As the time for the delivery of the first test car from Dayton to the Oakland Division grew near, there was a growing atmosphere of expectancy in the New York and Detroit offices. Mr. du Pont wrote to Mr. Kettering, "Now that we are at the point of planning production of the new cars I am beginning to feel like a small boy when the long expected circus posters begin to appear on the fences, and to wonder how each part of the circus is to appear and what act I will like best."

  Specific dates for the Oakland schedule were officially set by the Executive Committee on October 20, 1921, as follows:

  Production of the existing water-cooled car to be stopped on December 1, 1921.

  New air-cooled cars, made in Dayton, to be introduced at the New York Automobile Show in January 1922.

  Production of the new car to begin at the Oakland Division in Pontiac, Michigan, in February at one hundred a day and to increase thereafter.

  No further questions on program remained, it seemed.

  The first air-cooled car then was sent from Dayton to the Oakland Division for test. This was the first evaluation of the validity of the air-cooled car outside of the test cars operated by Mr. Kettering in Dayton. There was a pause, and then shock. Word came that the car had failed its tests at the Oakland Division.

  On November 8, 1921, Mr. Hannum wrote to Mr. du Pont:

  With the changes that are necessary to make this a real job, it is going to be impossible to get into production in the time specified, in fact, to get this car to the point where, after all tests are complete and we are ready to put our O. K. on same, it will take at least six months.

  To bridge the time when the present allotment of the old models are completed, which will be about Dec. 15th, and the time we bring in the Air Cooled Car, we are planning on bringing in a complete new [water-cooled] line . . .

  I want to say further the changes which we have in mind for the Air Cooled Job have not changed my views of the proposition in the least, as I believe, when we get the first job on the road, with the changes incorporated, there will be a great change in the test reports.

  Thus in less than a month the adopted schedule of the corporation was overthrown and the whole situation with respect to Oakland and the future General Motors product line had profoundly changed. There was disappointment and alarm in New York and pessimism in Detroit, Flint, and Pontiac concerning the outlook for the air-cooled car. Between Dayton and the manufacturing divisions controversy and confusion arose over the testing of the new car; there was no meeting of minds between Mr. Kettering's designers on the one hand and the divisional engineers and general managers on the other. Mr. Kettering felt fatigue and was so discouraged that the Executive Committee, upon officially canceling the Oakland air-cooled schedule on November 30, 1921, sent him a letter of confidence, as follows:

  Dear Kettering:— It is most important in our opinion that your mind be kept free from worries foreign to the development of the air cooled car and other laboratory work.

  In the development and introduction of anything so radically different from standard practice as the air cooled car is from the regular water cooled job, it is quite natural that there should be a lot of "wiseacres" and "know-it-alls" standing around knocking the development.

  In order that your mind may be completely relieved as to the position of the undersigned with respect to the air cooled development, we beg to advise as follows:—

  1st. We are absolutely confident in your ability to whip all problems in connection with the development of our proposed air cooled cars.

  2nd. We will continue to have this degree of confidence and faith in you and your ability to accomplish this task until such time as we come to you and frankly state that we have doubts as to the possibility or feasibility of turning the trick and you will be the first one to whom we will come.

  We are endeavoring in this letter to use language such as will result in complete elimination of worry on your part with respect to our faith in you and this work and if this language fails to create this result, then won't you kindly write us quite frankly advising in what respect we have failed?

  Due to the fact that criticisms are bound to continue until the air cooled cars are in active production and use, would it not be well for you to agree with u
s that at any time you have occasion to pause and wonder about our faith and confidence in you and this development, that you will pull this letter out of your desk and read it again, after which you will write to us in consideration of our frankly stating that we will write to you first in case of any doubt?

  The letter was signed individually by the four members of the Executive Committee and by C. S. Mott, who as I have said was the group executive for the car divisions.

  The crisis passed. The president's faith in the new engine was restored, Mr. Kettering revived his interest and energies, and the scene shifted from Oakland to Chevrolet.

  On December 15, 1921, the Executive Committee proposed a strong effort to get the Chevrolet air-cooled "4" into production by September 1, 1922. To reconcile the divisions and research, O. E. Hunt, chief engineer of Chevrolet, and B. Jerome and E. A. De Waters, chief engineers representing Oakland and Buick, respectively, were sent to Dayton to collaborate with Mr. Kettering on the design of the air-cooled "4" an^ "6-"="" daily="" test="" reports="" were="" requested="" to="" be="" sent="" to="" the="" division="" managers="" and="" to="" the="">^>

  The year 1921 closed with no definable progress in the General Motors product line.

  These events bothered me to the extent that I attempted to raise them to a higher level in my mind with a view to taking them up with the Executive Committee. I did not feel strongly one way or the other about the technical question of an air-cooled versus a water-cooled engine. That was an engineering matter, for engineers. If I have any opinion today it is that Mr. Kettering may have been right in principle and ahead of his time, and that the divisions were right from a development and production standpoint. In other words, in this kind of situation it is possible for the doctors to disagree and still all be right. From a business and management standpoint, however, we were acting at variance with our doctrines. We were, for example, more committed to a particular engineering design than to the broad aims of the enterprise. And we were in the situation of supporting a research position against the judgment of the division men who would in the end have to produce and sell the new car. Meanwhile, obsolescence was overtaking our conventional water-cooled models and there was nothing in the official program to protect their position.