General Motors History: Richard Grant, Buck Weaver, and Sloanism

a camshaft transfer  machine

            Kettering brought more to GM than just technical expertise:  he brought talent that made crucial contributions to GM’s efforts to surpass the Ford Motor Company during the Interwar years. One of his closest associates at Delco was Richard H. Grant, and it was Grant who drew on his experiences at National Cash Register and the sales philosophy of John Patterson to teach GM to sell – first Chevrolets and then the entire product line. Known as “Dynamic Dick” and the “Little Giant,” Grant was one of America’s great salesmen. Born in Massachusetts and educated at Harvard, Grant learned to sell at NCR, became its general sales manager in 1913, later moved to Delco and Frigidaire, and in 1923 joined Chevrolet as sales manager. In 1929, Grant became a GM vice-president and was one of the top four or five executives of the firm during the 1930s, with memberships on six policy groups.

            The “Little Giant” played major role in reorganizing the distribution system at GM, eliminating distributors who previously held large territories and had control over local dealers. He was an orator and showman, but beneath the surface Grant was a careful, systematic thinker who implemented market research, accounting, and training procedures throughout the corporation. Grant had learned seven fundamentals of sales from NCR’s John Patterson that were subsequently instilled into GM personnel:

1. Have the right product.

2. Know the potential of each market area.

3. Constantly educate your salesmen on the product, making them listen to canned demonstrations and learn sales talks by heart.

4. Constantly stimulate your sales force, and foster competition. among them with contests and comparisons.

5. Cherish simplicity in all presentations.

6. Use all kinds of advertising.

7. Constantly check up on your salesmen, but be reasonable with them and make no promises you can’t keep.¹³

Grant further refined Alfred Sloan’s notion of using R. L. Polk Company’s monthly state registration data to closely monitor subtle shifts in consumer demand. By the late 1920s, this information would be relayed to William Knudsen’s production group, thus ensuring that the automobiles made would be the kind that customers would quickly buy off dealer’s lots.

Closely related to Grant’s efforts were those of the customer research group, led by Buck Weaver.¹⁴ Weaver and his associates formulated a set of questionnaires aimed at asking the broad question of “What do customers want?” A large number of potential questions were mailed memorandum books in which every aspect of design and engineering was queried. Among the questions asked were what should be the shape of the radiator; what designs are too conservative and too extreme; should there be running boards on cars; and most significantly, how should a car be sold. For buyers of the early 1930s, the results of the surveys pointed to their priorities for cars that were dependable and economical. For the average American, speed and the power of the engine seemed to be the least of their concerns.¹⁵

With the advent of Alfred Sloan’s idea of a car “for every purse and purpose,” and his choice of executive leadership in the likes of Kettering, Grant, and production genius William Knudsen, General Motors came to dominate the automobile industry. In the third phase of the production process, from the mid-1920s into the 1950s, Fordism was modified and intensified, thus evolving into what became known as “Sloanism.” Sloanism can be thought of as an ongoing structural process by which an organization is shaped and decisions made in such a way as to facilitate effective positive change in the workplace and marketplace. By the 1930s, Sloanism translated into committees that set policies and decentralized operating divisions managed by individuals.

Sloanism was an idea at GM as early as 1925, first introduced on the shop floor in 1928, and fully implemented by 1932 and 1933. With machines that were flexible, rapid model change was now possible. Some assembly line positions were reskilled under Sloanism, as “vital maintenance and repair workers made up nearly 10 percent of the industry’s labor force.”¹⁶ To fit machines to new models, a new class of mechanics was created. They were paid to think, solve problems and define the task that they had to accomplish.¹⁷ Flexible mass production marked an important change for organized labor, but Fordism remained the productive motif for most Americans working in automobile assembly plants.¹⁸ Stephen Meyer noted the continuity: “The Sloanist flexible production system retained the Fordist features of routinized work and work processes; it remained monotonous, repetitive, and machine paced.”¹⁹ For semiskilled and unskilled workers, the new machines furthered degraded skills and intensified the pace of the assembly line.

In the 1920s, managers and foremen aimed to increase output per worker to meet the insatiable demand for cars. Though the annual model change appealed to the American consumer, it frustrated the auto worker. “The annual model change meant several days or weeks of fussing and fumbling until they adjust to the new routines and rhythms of their work.”²⁰ As Joyce Shaw Peterson indicated, early autoworkers sometimes opted to keep doing the same monotonous job in order to “space out” or daydream, rather than having to learn a new job.²¹ The increased demand was met with a speed-up of the assembly line. James Flink noted that “Sloanism thus had the effect of intensifying the amount and pace of dehumanizing work in automobile manufacturing . . . there was degradation of labor to lower skill levels and intensification of the production process.”²²

Flexible mass production persisted into the Great Depression. At General Motors, the process paid off; during the Depression they reported profits every year.²³ Indeed, by the late 1930s GM was no longer considered as “Big Business,” but as “Colossal.” Even during the darkest days of the Great Depression, the firm had over 250,000 employees working in 110 manufacturing plants located in 14 states and 18 countries.²⁴

By the mid-1920s the GM strategy of a car for every purse and taste was markedly cutting into Ford sales. GM exemplified what the power of technology and organization, harnessed together, could do to dominate the American automobile industry. Chevrolet, the lowest priced of the GM models, was not only a key to GM’s success, but emerged as the car for everyman by the end of the 1920s. Chevrolet was created by race driver Louis Chevrolet and Billy Durant before WWI. Originally an expensive automobile with a 6-cylinder engine, it later became a low-priced car with a smaller engine. During GM’s financial crisis in 1920, discussions took place during which it was proposed that Chevrolet would be dropped as a product line, but in 1922 William Knudsen was hired to head production and Richard Grant sales. By 1927, Chevrolet had outsold Ford and became the largest customer for the various GM parts subsidiaries, like Delco-Remy, Fischer, Harrison, and Guide Lamp.²⁵ The 1929 Chevrolet, with features that included the reliable “stove-bolt” six (labeled so because of the stove bolts which held many of the engine parts together), set the benchmark for low-priced cars. As shown in Table 3, by the mid-1930s Chevrolet sales consistently outpaced Ford’s, reflecting both GM’s ascendancy and Ford’s relative decline in the American, and indeed world market place.

Table 3: Ford vs. Chevy Passenger Car Production, 1928-1942

Year	Ford	Chevrolet
1928	713,528	786,670
1929	1,715,100	856,384
1930	1,261,053	647,520
1931	626,579	623,901
1932	420,824	323,100
1933	334,949	486,378
1934	563,921	556,666
1935	942,349	793,106
1936	791,812	971,595
1937	848,608	866,885
1938	410,048	489,143
1939	532,152	645,905
1940	599,175	894,178
1941	600,814	928,477
1942	43,407	45,393

Source:  Ray Miller, Chevrolet:  The Coming of Age, 1911-1942 (Oceanside, CA: Evergreen Press, 1976), p.319.

The Mercedes-Benz W 124 Class Automobiles -- a 30 year history

Star of the show: Fans and experts alike crowd around the midsize Mercedes-Benz W 124 series at the IAA in 1985.

The keenly anticipated new saloon in the upper medium class celebrated its premiere in November 1984. The new model series 124 was launched with the models 200 D, 250 D, 300 D, 200, 230 E, 260 E, and 300 E. The 200 E was also produced for the Italian export market. Mercedes-Benz still followed its classic model designation pattern when the series had its debut in 1984, but in 1993 the medium model series was given the name E-Class. The front and rear axle designs already familiar from the compact W 201 series (“Baby Benz”) presented in 1982 ensured outstanding handling characteristics and a high level of active safety. They feature individual wishbone control arms at the front and a multi-link independent suspension at the rear.

Visually and technically the medium model series took its lead from the compact W 201, with clear, sporty lines and body panels of high-strength steel, but set new standards in terms of technology, comfort, and design. The exterior

design was created by Joseph Gallitzendörfer and Peter Pfeiffer in the team led by the head of design, Bruno Sacco.

Using systematic lightweight construction methods, the body had new styling features based on practical considerations. Two typical design features are the trapezoidal boot lid drawn well down into the rear end and the slanted inner edges of the tail lights. This allowed a particularly low loading sill for the large boot. Another characteristic feature was the rear end, which tapered towards the rear and was heavily rounded at the upper side edges, contributing to an especially low drag coefficient. On market launch, the cd value was 0.29 to 0.30 depending on the model – a sensation at the time. Later models even achieved cd values as low as 0.26. The aerodynamic improvements also considerably lowered fuel consumption compared to the preceding series.

One less conspicuous but innovative design detail was the eccentric-sweep panoramic windscreen wiper. It swept 86 per cent of the windscreen – at the time the largest swept area of any passenger car in the world. Thanks to linear travel added to the rotational movement, the upper corners of the windscreen could be wiped clear more efficiently than by a conventional single-arm wiper. Electrically heated windscreen washer nozzles were standard equipment for all models in the series.

New variety: body shapes and 4MATIC all-wheel drive

The history of the model series 124 is characterised by an unprecedented variety of models and innovations. The start of this new body design diversity was marked by the presentation of the Estate model at the International Motor Show (IAA) in Frankfurt in September 1985. In technical and styling terms, this second generation of the sporty lifestyle Estate from Mercedes-Benz was substantially identical to the Saloon – apart from the different rear end structure. In the Estate, however, the multi-link independent rear suspension already featured hydropneumatic level control as standard. In addition, as part of the “Mercedes-Benz driving dynamics concept”, the company presented the automatically engaged 4MATIC all-wheel drive system with the Estate. The all-wheel drive system was available for the six-cylinder models in the model series 124.

In 1987, Mercedes-Benz expanded the model range even further: The first addition was the Coupé as the third body variant, which had its debut at the Geneva Motor Show in March and was given an 8.5 cm shorter wheelbase than the Saloon. This underlined the sporty character of the two-door model, and made it a completely distinctive body design variant in both its form and design. Features in common with the Saloon were restricted to the front section and tail lights.

1989: first facelift for the medium class, and a long-wheelbase version

At the IAA Show in Frankfurt on the Main in September 1989, Mercedes-Benz presented a completely revised model range in the medium class. The main aspects of this facelift were restyling of the body and a redesign of the interior. The most distinctive feature of the facelifted models was the protective cladding on the sides with integrated sill panelling, which had already been premiered in the Coupé models two and a half years before and was affectionately-cum-disrespectfully dubbed “Sacco boards” by enthusiasts.

The fourth body variant to be presented in Frankfurt was a Saloon with an extended wheelbase. After a gap of four years, a long version was therefore now available in the model range once again. The long body was developed in close collaboration with the company Binz in Lorch, which also became responsible for the bodyshell production. The wheelbase was increased by 80 centimetres to 3.60 metres, with the overall length increasing by the same. In contrast to their predecessors, the 250 D long and 260 E long models had six doors and a fully-fledged centre seat unit whose cushion depth and backrest height were almost identical to those of the rear seat unit.

In October 1990, the 500 E was in the limelight at the Paris Motor Show as the new top model. It was the first model in the medium model series to be powered by a V8 engine. Externally this high-performance saloon was only distinguishable from its sister models at second glance. However its inner values were all the more impressive: the 500 E was powered by a 240 kW (326 hp) five-litre, four-valve V8 engine based on the well-proven technology of the power unit in the 500 SL, and delivered breathtaking performance figures. It was capable of sprinting from zero to 100 km/h in 5.9 seconds. The top speed was electronically limited to 250 km/h. The characteristic features of the 500 E included discreetly flared wings, fog lamps integrated into the front apron and 16-inch light-alloy wheels in an eight-hole design. The suspension was lowered by 23 millimetres compared to the other models in the series, and the rear axle featured hydropneumatic level control as standard.

The German motoring magazine “auto motor und sport” wrote the following about the Mercedes-Benz 500 E in edition 25/1990: “As forgiving as a fairytale uncle, as agile as a fast sports car, and comfortable as well? Yes indeed, that is the most surprising aspect of this suspension system. Despite the taut setup, the springs and dampers absorb surface irregularities in such a well-mannered way that even very demanding occupants have little reason to whinge.”

1991: launch of the Convertible

In September 1991, the 300 CE-24 Convertible arrived as a further body variant in the model series 124. After a gap of exactly 20 years, this meant that a four-seater convertible was once again available in the medium class. The Coupé was used as the basis for development of the Convertible. Enormous design effort went into preparing the two-door variant for its role as an open-top car – around 1,000 parts had to be redesigned just to give greater rigidity to the bodywork. All in all each Convertible needed more than 130 kilograms of additional sheet steel to statically compensate for the missing 28 kilograms of the Coupé roof. A linear rollover bar located behind the rear seats was specifically developed for the Convertible – this extended almost vertically upwards within 0.3 seconds if a rollover was likely. It could be extended at the touch of a button at any time to act as a head restraint for passengers in the rear.

Four-valve technology in large-scale production

The three-litre six-cylinder engines with four-valve technology were already available for the Saloon, Coupé, and Estate from 1989, and the 300 CE-24 Convertible was also powered by this powerful petrol engine. In September 1992, the entire petrol engine range was thoroughly revised, and the four-cylinder units were now all equipped with four-valve technology.

As a world first, four-valve technology was also introduced in the five- and six-cylinder diesel models in 1993. The new technology not only ensured higher torque and output over a considerably wider engine speed range, but also reduced fuel consumption under full load by up to eight per cent. At the same time particulate emissions in the exhaust gas were reduced by around 30 per cent thanks to the improved combustion cycle.

Second facelift: from the medium class to the E-Class

A new nomenclature came into effect with the sales start of the model series 124 restyling facelift in June 1993. In line with the S-Class and the new C-Class, the medium class was now called the E-Class. This meant that the model designations now followed a modified system whereby a letter indicated the vehicle class. This was followed by a three-figure number based on the engine displacement as before. The previously added E indicating petrol engines with fuel injection was omitted, as there were no longer any carburettor engines in the model range. Moreover, there was no encoding of the body variants such as Coupé or Estate as these were obvious. In the diesel models the added lettering “Diesel” or “Turbodiesel” replaced the previous D.

Particular sportiness was exuded by the new E 60 AMG as the top model, which the Affalterbach-based performance brand offered with a six-litre variant of the M 119 V8 engine. The output of this muscle-car was 280 kW (381 hp) at 5,600 rpm. AMG also increased the output of the Coupé and Convertible: The E 36 AMG models with 200 kW (272 hp) at 5,750 rpm were likewise launched in 1993. They were equipped with a 3.6-litre engine based on the 3.2-litre M 104 power unit. In 1993, AMG models are indicated the vehicle class by a two-figure number based on the engine displacement.

Discontinuation after production of over 2.7 million units

Production of the 124-model series Saloon ceased in August 1995. The Estate continued to be produced until 1996, and Mercedes-Benz also produced CKD (completely knocked down) kits of the Saloon models E 250 Diesel and E 220 for assembly abroad until 1996. Production of the Convertible even continued until 1997. During the production period of just over eleven years, 2,213,167 Saloons, 340,503 Estates, 141,498 Coupés, 33,952 Convertibles, 2342 long-wheelbase Saloons, and 6,398 chassis with semi-bodies for special conversions were produced in all: This makes a total of 2,737,860 units – over 40,000 more than the previous record holder, the preceding model series 123. Lovingly cared-for examples of the 124-model series are today among the most popular Mercedes-Benz young classics.

"Boss" Kettering, General Motors, and "Keeping the Customer Dissatisfied."

Kettering, and “Keeping the Customer Dissatisfied”

            Biographer Stewart W. Leslie has said this about Kettering and his technological style:  “He made corporate bureaucracy work for him. Within the largest private organization of his time he fashioned a managerial role that proved technological entrepreneurship could flourish, and one man could still make a difference.”⁷ Kettering had remarkable personal qualities that distinguished him as one of the leading industrial scientists of his and any other era in American history. He was sharply inquisitive, and this trait led to an intimate knowledge associated with the problem at hand, the result of close observation and direct experience. Kettering was equally comfortable in both theory and practice, and he usually focused his attention on a commercial bottleneck where improvement seemed possible rather than striking out into completely unexplored areas. Yet he had little use for high-powered scientific theories and abstruse terminology that usually had little applicability in an industrial setting. He once said that “Thermodynamics is a big word for covering up our inability to understand temperature.”⁸

Born in Loudonville, Ohio, Kettering attended The Ohio State University, majoring in electrical engineering.⁹ Perhaps it was due to the strain of studies, but whatever the cause he temporarily lost his eyesight, only to regain it after working as a telephone line repairman. In 1903 he took a job at the National Cash Register Company (NCR), working in Invention Department No. 4 and was charged with the development of an electrical motor that would possess enough torque to operate a mechanical cash register. Dissatisfied with boss John Patterson, Kettering, along with Edward Deeds (then a vice-president at NCR), Bill Chryst and others, began work on an integrated automotive electrical system, a technology that would ultimately greatly improve the automobile as a form of transportation.

            In 1908, on the eve of Kettering’s involvement in the development of an efficient automobile ignition system, it was well recognized that ignition or providing the spark to ignite the fuel was a weak link. As Stewart Leslie has recounted:

A proper ignition for such a variable, high-speed engine had frustrated inventors for decades. Continental engineers, led by Robert Bosch, had eventually worked out an acceptable magneto around the turn of the century. Americans still preferred dry cell battery ignitions, which were cheaper though less reliable. However, battery ignition had its own shortcomings. To provide a spark of adequate intensity from a relatively small bank of batteries, the dry cells were connected to an induction coil in such a way that the primary circuit was repeatedly interrupted by a master vibrator that created a shower of sparks, which then depleted the non-rechargeable batteries after a few hundred miles of driving.¹⁰

            Kettering responded to this problem by drawing on his experience gained at NCR. He took a magnetic relay that he had used for a cash register design, and used it to serve as a holding coil that would release the ignition contact only at the proper moment in the cycle and send one intense spark instead of a shower. He subsequently sold this ignition coil design to Henry Leland at Cadillac, and this success would not only form the basis of the Dayton Engineering Laboratories Company (Delco) but also further work leading to an integrated electrical system. That technology involved a self starter, generator, voltage regulator and lighting units, which were also first sold to Cadillac before being marketed to other companies.¹¹ By early 1913, Delco occupied three floors of a rented factory building in East Dayton, Ohio, employed 1,500 workers, and had sold a total of 35,000 starting, lighting, and ignition systems. Despite the catastrophic Dayton Flood of 1913, Delco continued to grow, and thus by the end of that year the firm tripled its annual output, to more than 45,000 units. Profitable and innovative, it would be purchased by Durant in 1916.

            Kettering’s successes at GM as head of research would far outweigh his failures. The two main areas of research at the laboratory were centered on studying the combustion process in engine cylinders and the nature of materials. In both cases, definitive answers to a scientific understanding of these important areas were not forthcoming. Yet, he once said, “You must learn how to fail intelligently, for failing is one of the greatest arts in the world.” Indeed, it is instructive to look at his most notable failure, the copper-cooled engine. The story tells us much about the nature of engineering at GM, and how it was organized during the period between World Wars I and II.

            In 1919, Kettering had become convinced that there was a great future for an air cooled, as opposed to a water cooled, engine. Light and maintenance-free in terms of freezing and adding coolant, the air-cooled engine had been developed in Europe and America, the most notable successes being the early Franklin engine and the designs of British automobile engineer Frederick W. Lanchester. Kettering and his research staff, including mechanical engineer Thomas Midgley, focused on the use of copper fins to dissipate heat emanating from cylinders. By 1920 a team of engineers and scientists had developed a technique to fix the copper fins to the exterior of cylinder walls. Pierre DuPont, at that time in charge of GM and trained as an engineer, saw the possibilities of this design, and encouraged Kettering to move forward on the project. What DuPont and other GM executives recognized was that this light and economical engine could be inexpensively manufactured in both 4- and 6- cylinder versions, and be used in the low- priced Oakland and Chevrolet models. Especially with regard to the Chevrolet, it was thought that the copper cooled engine would provide the edge for Chevrolet to compete with the Ford Model T.

            Despite the enormous resources that GM dedicated to this project, however, the copper–cooled-engine failed in the end. Kettering and his group could design and make small quantities of engines that worked in Dayton, where GM research laboratories were located. But in Detroit, manufacturing engineers could not or would not make engines that consumers were satisfied with. These engines often lacked power; pumped oil, threw fan belts, overheated, or just ran poorly. In sum, the research engineers and manufacturing engineers were at odds, and until GM in 1925 formed a technical committee to bring the two groups together, ventures like the copper cooled engine were doomed to failure.

            Success would come to Kettering and Midgley related to tetra-ethyl lead, however. Around 1920 there was a fear that the world was running out of oil, and therefore leading automobile industry executives thought that engines had to be designed to run more efficiently. One way to do this was to increase the compression ratio of the engine, or the volume swept in the cylinder by the piston, but increased compression ratios led to pre-detonation of the fuel-air mixture, a phenomenon that was called knocking. Kettering initiated a search for an additive to prevent knocking, and after many trials, discovered an organo-metallic substance called tetra-ethyl lead, or TEL. There was one hitch with this project, however. Lead compounds had been known since Roman times, to be notoriously poisonous, but it was claimed that in the ratio of 1:1300 in gasoline, the material was harmless. TEL was seen by industry leaders as a “gift from God;” tests made by laboratories after 1925 demonstrated that TEL was supposedly safe for mechanics, gas station attendants and consumers.¹² Of course, as we know now, it was not. At low levels lead proved to be a neuro-toxin, but it would remain until the 1960s before improved chemical instrumentation demonstrated the extent of the public health dangers posed by this substance. Beginning in the 1970s, TEL was phased out in the U.S., but only after two generations were exposed to relatively high amounts of lead that eventually entered the human body. 

Billy Durant, Alfred P. Sloan and the Early History of General Motors

Flint Journal file photoAt a celebration marking the 25 millionth car, Alfred P. Sloan Jr. greets William C. "Billy" Durant in January 1940.

Although General Motors has experienced a remarkable decline in market share and stock value, it still is one of the most powerful corporations in the world.¹ Hampered by health care costs and prior union agreements, the maxim remains true, however, that “what is good for General Motors is good for America.” Indeed, GM’s financial resources are greater than all but a handful of countries. And while in many respects it has been characterized as a faceless corporation where decisions are made by committee and individualism is frowned upon, it is ironic that the firm was forged by a few strong individuals, among them William C. “Billy” Durant, Alfred P. Sloan, Charles Franklin Kettering, William S. Knudsen, Richard H. Grant, and Harley Earl. Perhaps its future will again be fashioned more by individuals than the organization itself, at least if current GM vice-chairman Bob Lutz has any say.²

“Billy” Durant and “Silent” Sloan

Chapters from Alfred Chandler’s classic Strategy and Structure remain perhaps the most concise recounting of General Motors early history.³ General Motors’ beginnings are intimately tied to the career and fortunes of the “dealmaker,” Billy Durant.⁴ In 1885 Durant, a twenty-four year old insurance salesman living in Flint, Michigan, purchased a patent for $50 to make two-wheeled carts. Durant’s partner in this venture was J. Dallas Dort, a young hardware salesman. The two began marketing their product nationwide, and as their efforts were successful, they first erected a manufacturing plant in Flint, and set up specialized plants to make bodies, wheels, upholstery, paint, varnish, axles, and springs. Durant’s efforts to develop a high volume, integrated business made him a millionaire before he was 40, yet he was never interested in the operational details of the business. Accordingly, he moved his personal headquarters to New York, where in imitation of business titans J. P. Morgan and others, he began to look for new industrial empires to conquer.

            By 1900 the automobile was clearly emerging as an entrepreneurial opportunity for many, and Durant recognized that it posed a threat to his existing carriage business. In 1904 one of the smaller firms in the America automobile industry was that of the Buick Motor Company, located in Flint, Michigan and headed by Scotsman David Buick. Then in bankruptcy, the Buick firm was taken over by Durant, and it became the foundation for an auto empire. Durant redesigned the car, built large assembly plants, and set up a nationwide distribution network and dealer organization.

            As sales volume increased, Durant encouraged the production of parts and accessories in Flint or purchased suppliers and moved them to Flint. Thus, he bought the Weston-Mott Axle and Wheel Company and moved it from Utica, New York to Flint in 1905; in 1908 he bought Alfred Champion’s spark plug company and moved it to Flint from Boston. Durant was following a strategy of backwards integration and in doing so he was eliminating uncertainties associated with outside parts suppliers.

            As a result of Durant’s leadership, Buick’s output rose from only 16 cars in 1903 to nearly 8,500 units in 1908. This initial success with Buick convinced Durant that the automobile had a huge potential market in the U.S. Rather than expanding Buick internally and adding to capacity, Durant began to think of merging a number of existing companies into a conglomerate. To that end, on September 8, 1908, Durant formed the General Motors Company, which by the end of the year owned stock in Buick, Oldsmobile, and the W. F. Stewart Co., bodymakers located in Flint. Durant then followed a strategy of exchanging stocks to control Cadillac, Oakland, six other car companies, three truck companies, and ten parts and accessory companies.

            While following an expansion strategy using both vertical and horizontal combination, Durant never prepared for a temporary decline in demand in the form of a business recession. He never considered building up cash reserves to weather an economic downturn. Ever-expanding through acquisitions, Durant made no attempt to collect information about output and demand in order to make adjustments in production that might compensate for temporary fluctuations in the economy. Further, Durant was not interested in management principles related to organization; he never focused on maximizing the economies of scale in purchasing or production that were possible due to his empire building.

            In 1910 a slight recession took place, and Durant lacked the money to pay his employees and suppliers. He was financially rescued by bankers who took control of his company, and consequently, Durant was forced into a position where he had little to say about company matters. James J. Storrow was the leader of a group of bankers involved in saving General Motors. Storrow desired more organization and more control over what had been autonomous company operations. To that end, centralization took place at General Motors, and as a first step in that process Storrow moved headquarters from New York to Detroit. He set up three permanent offices at the main office, with the idea that the firm would be administered more effectively. A new purchasing office was established, so that economies would be achieved in volume buying for the various subsidiaries. An accounting office was also created, and accounting procedures were standardized throughout the company. Accurate information on costs, profits, and losses were now tallied. Finally, a new production office was set up. With Charles Nash as president and Walter Chrysler in charge of production at Buick, GM’s sales rose from $85 million in 1912 to $157 million in 1915.⁵

            Storrow’s measures were all steps in the right direction, but in 1915, when he left General Motors, company operations were far from efficient. Storrow left because Durant returned through a complex financial arrangement. In that transition, the DuPont family was now in an important financial position at General Motors. With the support of the DuPont family, Durant encountered little restraint in expanding the firm in the years immediately after 1915. Increased volume was the focus of Durant’s maneuvers, and he paid no attention to the different needs or the demands of the market. Concurrently, he paid little attention to organization and strategies and policies where control and coordination would be exerted. Durant’s expansion was exhibited in a number of different ways. First, he acquired several leading parts and accessory companies, including Hyatt Roller Bearing Co., Remy Electrical Co., Delco, and Pullman Rim Co. New products, including tractors and refrigerators, were also introduced. After World War I, this drive to expand accelerated, as Durant bought the Fisher Body Company; gear manufacturer T. W. Warner Company; and Buffalo Metal Goods, a producer of braking systems. Stock investments were also made in Alcoa, Goodyear, and General Leather, all major automobile suppliers.

            The DuPont family – flush with money due to the profits made during World War I but conservative in their business strategies – was troubled by Durant’s aggressive behavior and speculation in the stock market, but little was done until the economic downturn of 1920. By October, the automobile market had collapsed and General Motors stock took a nosedive. As a result, Pierre DuPont became president of General Motors and he acted decisively. One of his first acts was to approve Alfred Sloan’s organizational structure for General Motors, a structure that remains to this day the company’s basic organization. The multidivisional structure that was proposed and approved by Pierre and Irenee DuPont featured a central office that planned, coordinated, and appraised the work of a number of operating divisions and allocated to them the necessary personnel, facilities, funds and other resources. The executives in charge of these divisions had under their command most of the functions necessary for handling one major line of products or a set of services over a wide area, and these men were responsible for the financial results of their respective divisions. This new structure was designed to mobilize resources effectively, so that both short- and long-term demands were met.

            Sloan’s organization plan was implemented in 1921, and only slightly modified during the next four years. Up to 1921, competition existed between divisions. Boundaries between divisions were established based on market strategy. Furthermore, the company did not have a low-priced car to compete with the Ford Model T, but by 1923 GM product lines were redefined and readjusted. Cadillac sold in the highest price position, followed by Buick, Oakland, Oldsmobile, and finally Chevrolet. Chevrolet had the highest volume and the lowest price. In 1925 Pontiac was created, thereby filling a gap and enabling Sloan to achieve his goal of “a car for every purse and purpose.”

            The difference between the approaches of Durant and Sloan to the problems of administration reflected contrasting personalities, education, and experience.⁶ Durant was a small man, energetic and personable. Almost everyone who knew him, called him “Billy.” Sloan, on the other hand, was tall, quiet and cool, and his increasing deafness heightened his reserve. Nearly everyone called him “Mr. Sloan,” and when in company whom he did not know, he turned into “Silent Sloan.” Durant had gone from high school into business, but Sloan was an electrical engineer with a degree from the Massachusetts Institute of Technology. Durant was a salesman and stock speculator, but Sloan was a very deliberate thinker and a production man. In 1899, with the assistance of his father, Sloan purchased the Hyatt Roller Bearing Company. It grew so rapidly that the company was sold to Durant for $13.5 million in 1916, at which time Sloan joined GM as a president of its parts subsidiary. Charles Franklin Kettering would join GM in a similar way as a result of the purchase of Delco.

A Harley-Davidson "Topper" and Some Reminiscences from Ed

John, in the mopeds, scooters, and whizzers class that I judged today was an exact version of the Harley-Davidson Topper (scooter) that I delivered newspapers on for a couple of years after getting my driver's license.  See attached photo.  Indeed, the owner of this gem lives only two miles from me here in Beavercreek. 

I came home from college during Christmas break in fall of 1965 and learned that my step-father had sold my scooter.  He never inquired as to whether I wanted to keep it.  While he is now dead, I have yet to forgive him for that misdemeanor.   These scooters were relatively rare when they were on the market and few people know that Harley actually marketed a 2-cycle scooter.

I asked the gentleman who owns it if he would consider parting with it.  He said "no" and indicated that he'd paid 3K for it a couple of years ago.  As I recall I paid perhaps 75 bucks when I bought mine used from someone in Hinton, West Virginia likely around 1962 or 63.  A 75 buck motor scooter now is valued at $3,000.............go figure

Mayhem and Murder on I-75

The interstate highway system is analogous to the American river system of the 19th century, where the flow of goods and people facilitated the growth of a great nation. My current department Chair, Juan Santamarina, commutes between Dayton and Cincinnati 4 days or more each week, and the stories he tells me easily raise eyebrows. Such was the case yesterday when a man fled Kentucky after killing his ex-girlfriend's 17 year old son who tried to stop him from abducting the young man's mom. As it turned out, the killer was stopped near the exit to Ohio 63, but only after he had killed the woman, her bloodied and naked body found in the vehicle by police. After turning the gun on himself and missing (sort of, he did not commit suicide and is now in custody), the ordeal ended after hours during which the Interstate North was closed and South being very slow.

Juan has experienced other interesting events on I-75 -- burning trucks, ladders hitting his Mercedes. That poor Mercedes has and multiple visits to the body shop as the result of scrapes on the road! He is not alone. My own driving experiences on I-75 included a near collision with a refrigerator box that was in the middle lane after it fell off a pick up truck.
What follows are some photos from Juan taken from his cell phone of the burning truck and yesterdays police confrontation with a murderer.

 left UD at 1pm or so today, trying to get home early to finalize some things for Andrew's 13th bday today.  At maybe 1:30, when I was near exit 32 on I-75 I saw dozens of speeding police cars of all sorts, some driving the wrong way on the on-ramps, northbound  traffic getting stopped by 6 cop cars, complete chaos and clearly no accidents.  It was happening just as I was passing so I kept going to get out before there was any chance of getting stuck.  Below is what I found on DDN when I got home.

Always an adventure.

Juan

UPDATE @: 3:08 p.m. p.m.: The I-75 shooting incident may be connected to an abduction and slaying in western Kentucky.

The Graves County, Ky., Sheriff Dewayne Redmon said a 17-year-old boy was found shot to death this morning at his home in Mayfield, Ky. The boy's mother, apparently was taken against her will by an ex-boyfriend, which prompted a multi-state search, the Associated Press reported.

UPDATE @: 258 p.m.: The Warren County coroner is on the way to the Interstate 75 shooting scene in the northbound lanes between. Ohio 63 and Ohio 122.

In the northbound lanes, troopers have cordoned off a white SUV, and southbound traffic is moving. The SUV appears to have a vanity Illinois license plate, TRICKE1.

All four doors to the SUV are open, and items are in the roadway, which appears to be shoes, clothing. There are at least 10 cruisers in the area.

UPDATE @: 239 p.m.: The Ohio Highway Patrol will be holding a news conference at the Cincinnati Premium Outlets off Ohio 63 in Monroe.

A murder suspect is in custody this afternoon after a reported shooting that forced all lanes of Interstate 75 to be shut down.

Southbound I-75 is now reopened between Ohio 63 and Ohio 122, but the northbound lanes remain shut down. Motorists who were stuck in the northbound lanes are now being turned around, using the north lanes and exiting at Ohio 63.

The suspect shot himself, and has been transported to an area hospital, according to the Ohio Highway Patrol.

Troopers had been following the suspect, who was from out of state, according to the patrol.

Initial dispatch reports indicate a possible murder suspect may have shot himself near mile marker 31.

A motorist stuck in traffic said she saw police with guns drawn and ambulances at the scene.