The Unlikely Team That Created General Motors

[1931Chevy]

The standing order in the business of writing business books is to write them in the manner of novels. The idea is to humanize the story of a corporation or a business success or failure, to give the story juice.
But the result often is something less than palatable -- a dry tale burdened by numbers and esoteric arguments left to collect dust on the take-me-please bookshelves of The Washington Post's newsroom.

But not everything that winds up on those shelves or in the forgotten bins of corporate mail distribution centers is worthy of obscurity. Some of those tomes are good reads. One such find is William Pelfrey's "Billy, Alfred, and General Motors," a biography of William C. (Billy) Durant and Alfred Sloan, the two men who, for better or worse, built GM and laid the foundation for what the company has become.
Pelfrey's work is both entertaining and instructive. Durant and Sloan could not have been more different. Durant was a high school dropout with grand schemes, a devotee to the mythology that anybody in America could become president -- at least of a corporation if not the country. He was, as Pelfrey notes, "the consummate salesman," fascinated by the idea that money could buy anything, including a collection of motor companies that he welded into what became GM.
Durant lived for the thrill of the deal as opposed to the details of operating and keeping in place what was bought.
Sloan was Durant's polar opposite, a stuffed shirt if ever there was one: a Massachusetts Institute of Technology graduate and engineer, a Victorian businessman obsessed with organization and data and, of course, profit. It was Sloan who implemented the widely copied business practice of "decentralized operations with coordinated control," and it was Sloan who fashioned the marketing practice of "planned obsolescence," the basis of which was vehicle model changes, at least cosmetically, practically every year.
Durant's virtue was his vision coupled with his knack for expanding his empire through acquisition. But he was undone by his willful inattention to nuts-and-bolts operations.
Sloan was both a visionary and a consummate organization man. But he separated himself from his employees and, ultimately, laid the groundwork for GM separating its products from its buyers.
The tragic flaws of both men returned to haunt the company they co-founded. For example, though Sloan managed to bring order and some degree of common sense to the menagerie of independently operating car companies that eventually became General Motors, divisions such as Buick, Pontiac, Cadillac, Chevrolet and Oldsmobile continued to operate as separate production houses into the 1980s.
They had separate engineering and purchasing departments, and separate factories, all rolling merrily along as if they were their only automotive competitors in a United States where GM still maintained more than a 50 percent market share.
Sloan's double-arms-length dealing with labor and consumers eventually led to a corporation that alienated both, much to its own detriment in an era of intense international competition in its home market.
GM is still paying for that legacy, though the GM of today is not at all the company that was incorporated in 1908 or that rose to grandeur in the 1950s and '60s and fell into disarray in the last part of the 20th century.
Today's GM, often described as "struggling" because of its multibillion-dollar losses and declining share in the North American market, actually is more global than it is American. Its once freewheeling divisions, including Saturn, are no longer independent. Increasingly, they are part of a centralized, tightly coordinated global enterprise in which North America is no longer the most important component.
The new growth-potential markets for GM and its many rivals are elsewhere, primarily in China, India and Latin America.
Pelfrey's book does not predict GM's future. But it masterfully tells about GM's past and, in doing so, helps explain what recently went wrong at the company. By extrapolation, it also shows why GM is taking the correct steps today to right itself even as it appears to be dancing on the edge of disaster.
Pelfrey, a former director of executive communications for GM, spins a good tale here, heavily relying on GM documents, records and the personal writings of Durant and Sloan. "Billy, Alfred, and General Motors" is published by AMACOM, a division of American Management Association in New York.

[1931Chevy]

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[mkaresh]

The history book Pelfry wrote for internal use within GM left a bit to be desired. This sounds like a more solid effort. I look forward to reading it.

[nadepalma]

Sounds good to me -- I might have to go and take a look at this book....

[Havasavana]

I'm going to have to read this book. The best book on Durant I've read is "Dream Maker: William G. Durant, Founder of General Motors" by Bernard A. Weisberger. Very well researched and the author is a very good writer. Alfred Sloan's ghost written book "My Years with General Motors" as well as the book about the making of that book by John McDonald give some insight to Sloan's thinking. But both of these execs were men of their times and can't be judged by today's market, technology and methods IMO. Durant would not have succeeded at all in any time but the beginning of the industry with the methods he used then. Somebody said something to the effect that all he could see was an eternal green light. No caution at all and it nearly sunk him and GM twice and did eventually sink him.

[GMFreak8]

Ordering it now.

[Buickman]

Billy's biggest mistake was not paying attention to Alfred's "Organization Study" which he wrote in 1919. Pierre duPont, after taking control, did recognize the value of this relatively simple plan for the structure and strategy of GM. Pierre subsequently put Alfred in charge and the rest is history.

Buickman
Founder
www.GeneralWatch.com