Alfred P. Sloan
Alfred P. Sloan | |
---|---|
Brooklyn Polytechnic Institute,[1] Massachusetts Institute of Technology | |
Known for | President & CEO of General Motors |
Spouse | Irene Jackson |
Alfred Pritchard Sloan Jr. (
Sloan wrote his memoir, My Years with General Motors,[3] in the 1950s.[4] Like Henry Ford, the other "head man" of an automotive colossus, Sloan is remembered today with a complex mixture of admiration for his accomplishments, appreciation for his philanthropy, and unease or reproach regarding his attitudes during the interwar period and World War II.[5]
Life and career
Born in
Sloan became president and owner of
Sloan is credited with establishing
In the 1930s GM, long hostile to unionization, confronted its workforce—newly organized and ready for labor rights—in an extended contest for control.[2] Sloan was averse to violence of the sort associated with Henry Ford. He preferred spying, investing in an internal undercover apparatus to gather information and monitor labor union activity.[citation needed] When workers organized the massive Flint sit-down strike in 1936, Sloan found that espionage had little value in the face of such open tactics, and instead the successful strike legitimized the United Auto Workers as the exclusive bargaining representative for GM workers.[9]
The world's first university-based executive education program, the
The Alfred P. Sloan Museum, showcasing the evolution of the automobile industry and traveling galleries, is located in Flint, Michigan.[11]
Sloan maintained an office in 30 Rockefeller Plaza in
Sloan was inducted into the Junior Achievement U.S. Business Hall of Fame in 1975.
Philanthropy
The
The Sloan Foundation bankrolled the 1956 Warner Bros. cartoon Yankee Dood It, which promotes mass production. In the late 1940s, the Sloan Foundation made a grant to Harding College (now Harding University) in Searcy, Arkansas. The foundation wanted to fund the production of a series of short films that would extol the virtues of capitalism and the American way of life.[14] This resulted in the production of a series of animated cartoons by John Sutherland (producer) which were released on the 16mm non-theatrical market, and also distributed theatrically in 35mm by Metro-Goldwyn-Mayer.
According to Edwin Black, Sloan was one of the central, behind-the-scenes 1934 founders of the American Liberty League, a political organization whose stated goal was to defend the Constitution, and who opposed Franklin D. Roosevelt's New Deal. In turn, the league would finance other groups with openly more extreme agendas. One such group was the Sentinels of the Republic to which Sloan himself made a $1000 check. After a Congressional investigation into this group went public in 1936, Sloan issued a statement pledging not to further support the Sentinels.[citation needed]
Also according to Black, the GM chief continued to personally fund and organize fund-raising for the National Association of Manufacturers, which was critical of the New Deal.[15]
The Sloan Foundation has made three grants, of $3 million each, to the Wikimedia Foundation (WMF). These are some of the largest grants that the WMF has received.[16]
Criticism
Overly rational and profit-driven orientation
According to O'Toole (1995),[17] Sloan built a very objective organization, a company that paid significant attention to "policies, systems, and structures and not enough to people, principles, and values. Sloan, the quintessential engineer, had worked out all the intricacies and contingencies of a foolproof system." But this system left out employees and society.[18] One consequence of this management philosophy was a culture that resisted change. Proof that the system did not remain foolproof forever was seen in GM's problems of the 1980s, 1990s, and 2000s.
In fact, Sloan's memoir and management treatise, My Years With General Motors,[3] foresaw some of these problems. About them, Sloan implied that only vigilant, intelligent management could meet them successfully. He predicted that remaining at the top [of its industry and the economy] would prove a bigger challenge for GM than was getting there; and it turned out that he was right. But he also seemed confident that the management style of GM under his leadership, if continued and adapted, could meet these challenges. He said, "There have been and always will be many opportunities to fail in the automobile industry. The circumstances of the ever-changing market and ever-changing product are capable of breaking any business organization if that organization is unprepared for change—indeed, in my opinion, if it has not provided procedures for anticipating change. In General Motors these procedures are provided by the central management, which is in a position to appraise the broad long-term trends of the market. ... As the industry has grown and evolved, we have adhered to this policy and have demonstrated an ability to meet competition and the shifts of customer demand."[19]
As these words of Sloan (1964) show in juxtaposition with the words of
O'Toole described Sloan's style as follows:[22] "[W]hereas Taylor occasionally backs off to justify his ardor for efficiency in human terms, not once does Sloan make reference to any other values. Freedom, equality, humanism, stability, community, tradition, religion, patriotism, family, love, virtue, nature—all are ignored. In the one personal element in the book, he makes passing reference to his wife: he abandons her on the first day of a European vacation to return to business in Detroit. His language is as calculating as that of the engineer-of-old working with calipers and slide rule, as cold as the steel he caused to be bent to form cars: economizing, utility, facts, objectivity, systems, rationality, maximizing—that is the stuff of his vocabulary."[22]
Accounting system drawbacks
In 2005, Sloan's work at GM came under criticism for creating a complicated
In his memoir, Sloan (who would freely acknowledge that he was not a trained accountant) said that the system that he implemented in the early 1920s was far better than what it replaced (which was, in so many words, an undesigned cacophony in which financial controls mostly didn't exist). He said that years later, a professional accountant (Albert Bradley, longtime CFO of GM) "was kind enough to say [that it] was pretty good for a layman."[24] Sloan was far from the sole author of GM's financial and accounting systems, as GM later had many trained minds in accounting and finance; but regardless of authorship, GM's financial controls, at one time considered top-notch, eventually proved to have latent drawbacks. Systems similar to GM's were implemented by other major companies, especially in the United States, and they eventually undermined the ability to compete with companies that used different accounting, according to Waddell & Bodek's 2005 analysis.[23]
Sloan's memoir, particularly Chapter 8, "The development of financial controls",[25] indicates that Sloan and GM appreciated the financial dangers of excess inventory even as early as the 1920s. However, Waddell & Bodek's 2005 analysis[23] indicates that this theory was not successfully implemented in GM's practice. For all of the intellectual understanding, the reality remained slow inventory turnover and an accounting system that functionally treated inventory similarly to cash.
Nazi collaboration
In August 1938, a senior executive for General Motors,
Sloan's memoir presents a different picture of Opel's wartime role.[29] According to Sloan, Opel was nationalized, along with most other industrial activity owned or co-owned by foreign interests, by the German state soon after the outbreak of war.[30] But Opel was never factually nationalized and the GM-appointed directors and management remained unchanged throughout the Nazi period including the war, dealing with other GM companies in Axis and Allied countries including the United States.[31] Sloan presents Opel at the end of the war as a black box to GM's American management, an organization with which the Americans had had no contact for five years. According to Sloan, GM in Detroit debated whether to even try to run Opel in the postwar era, or to leave to the interim West German government the question of who would pick up the pieces.[29]
Defending the German investment strategy as "highly profitable", Sloan told shareholders in 1939 that GM's continued industrial production for the Nazi government was merely sound business practice. In a letter to a concerned shareholder, Sloan said that the manner in which the Nazi government ran Germany "should not be considered the business of the management of General Motors. ... We must conduct ourselves as a German organization. ... We have no right to shut down the plant."[5]
Post-war
As the war drew to an end, most economists and New Deal policy makers assumed that without continued massive government spending, the pre-war Great Depression and its huge unemployment would return. The economist
Sloan, however, felt otherwise and predicted a post-war boom. He pointed to workers' savings and pent-up demand, and predicted a huge jump in national income and a rise in standard of living. In line with his predictions, and despite a precipitous cut-back in government spending and the wholesale closure of defense plants, the economy boomed. One of the greatest periods of economic expansion in American history resulted.[32][33]
See also
- The Alfred P. Sloan Prize - given to films dealing with science and technology by the Alfred P. Sloan Foundation each year at the Sundance Film Festival.
- Sloan was a member of the Crusaders, an organization that promoted the repeal of national Prohibition of alcohol in the U.S.
- List of covers of Time magazine (1920s) - December 27, 1926
References
Notes
- ^ a b "Who was Alfred P. Sloan Jr.?". Alfred P. Sloan Foundation. Retrieved June 9, 2015.
- ^ a b c "Alfred P. Sloan Jr. Dead at 90; G.M. Leader and Philanthropist; Alfred P. Sloan Jr., Leader of General Motors, Is Dead at 90". The New York Times. February 18, 1966.
- ^ a b c Sloan 1964.
- ^ McDonald & Seligman 2003.
- ^ a b c Dobbs, Michael (November 30, 1998). "Ford and GM Scrutinized for Alleged Nazi Collaboration". The Washington Post. Retrieved June 1, 2009.
- ^ "Sloan, Alfred Pritchard, Jr". Encyclopedia.com. Retrieved January 22, 2021.
- ISBN 978-0-8018-3158-4.
- ^ Smith, Stephen. "The American Dream and Consumer Credit". American RadioWorks. Retrieved December 28, 2019.
- ^ Bak, Richard (September 2008). "(Frank) Murphy's Law". Hour Detroit. Retrieved June 9, 2012.
- ^ Educational Information & Advising Center OSVITA Archived 2012-03-08 at the Wayback Machine
- ^ Sloan Museum
- ^ "Harry S. Truman: Letter to Alfred P. Sloan Jr., Concerning Cooperation by the Broadcasting Industry in the Highway Safety Program. December 3, 1948". Archived from the original on September 27, 2018. Retrieved January 15, 2007.
- ^ "Archived copy" (PDF). Archived from the original (PDF) on November 19, 2015. Retrieved November 8, 2015.
{{cite web}}
: CS1 maint: archived copy as title (link) - ^ "Animating Ideas: The John Sutherland Story," Hogan's Alley #12, 2004[permanent dead link]
- ISBN 978-0914153092.
- ^ "Press releases/Wikimedia Foundation receives $3 million grant from Alfred P. Sloan Foundation to make freely licensed images accessible and reusable across the web". January 9, 2017. Retrieved March 17, 2019.
- ^ O'Toole 1995, p. 174.
- ^ Drucker 1946.
- ^ Sloan 1964, p. 438.
- ^ a b Sloan 1990 [1964], foreword, pp. v–vi.
- ^ Chao, Larry (February 2, 2009), "Hi! managers: How 'culture' crippled General Motors", The Nation, archived from the original on October 24, 2009.
- ^ a b O'Toole 1995, p. 176.
- ^ a b c d Waddell & Bodek 2005.
- ^ Sloan 1964, p. 48.
- ^ Sloan 1964, pp. 116–148.
- ^ a b Black, Edwin (December 1, 2006). "Hitler's Carmaker: How General Motors helped mobilize the Third Reich". J Weekly. Retrieved May 5, 2015.
- ^ Higham, Charles Trading with the Enemy. New York: Doubleday, 1982
- ^ Marriott, Red (2006). "How the Allied multinationals supplied Nazi Germany throughout World War II". libcom.org. Retrieved June 18, 2009. Excerpted from Higham, Charles. Trading with the Enemy - The Nazi-American Money Plot 1933-1949 New York: Doubleday, 1982.
- ^ a b Sloan 1964, pp. 328–337.
- ^ Sloan 1964, pp. 330–331.
- ISBN 978-0415248327.
- ^ ISBN 978-1-4000-6964-4.
- ^ ISBN 978-0-9897906-0-4.
Bibliography
- )
- McDonald, John; Seligman, Dan (2003). A ghost's memoir: the making of Alfred P. Sloan's My Years with General Motors. Boston, Massachusetts, US: ISBN 978-0-262-63285-0.
- O'Toole, James (1995). Leading change: overcoming the ideology of comfort and the tyranny of custom. San Francisco, California, US: Jossey-Bass. ISBN 978-1-55542-608-8.
- Sloan, Alfred P. (1964), McDonald, John (ed.), My Years with General Motors, Garden City, NY, US: Doubleday, ISBN 978-0385042352).
- Sloan, Alfred P. (1941). Adventures of a white collar man. New York: Doubleday, Doran. ISBN 978-0-8369-5485-2.
- Waddell, William H.; Bodek, Norman (2005). Rebirth of American Industry: A Study of Lean Management. Vancouver, Washington, US: PCS Press. ISBN 978-0-9712436-3-7.
Further reading
- Farber, David (2002). Sloan Rules: Alfred P. Sloan and the Triumph of General Motors. Chicago: The University of Chicago Press. OCLC 49558636.
- Ke, Rongzhu; Li, Jin; Powell, Michael (December 15, 2014). "Managing careers in organizations" (PDF). Journal of Labor Economics: 197–252.
- McKenna, Christopher D. (2006). "Writing the ghost-writer back in: Alfred Sloan, Alfred Chandler, John McDonald and the intellectual origins of corporate strategy". Management and Organizational History. 1 (2): 107–126. S2CID 145091667.
- Pelfrey, William (2006). Billy, Alfred and General Motors: The Story of Two Unique Men, a Legendary Company, and a Remarkable Time in American History. New York: Amacom Publishing. OCLC 811604070.
- Powers, Thomas L.; Steward, Jocelyn L. (October 26, 2010). "Alfred P. Sloan's 1921 repositioning strategy". Journal of Historical Research in Marketing. 2 (4): 426–442. .
External links
- Alfred P. Sloan Foundation. Its total assets had a market value of over $1.5 billion in 2005.
- Official Generations of GM Wiki site: Sloan, Alfred Pritchard Jr.
- Review of Klein and Olson's film Taken for a Ride
- Extract from Bradford C. Snell, American Ground Transport: A Proposal for Restructuring the Automobile, Truck, Bus and Rail Industries. Report presented to the Committee of the Judiciary, Subcommittee on Antitrust and Monopoly, United States Senate, February 26, 1974, United States Government Printing Office, Washington, 1974, pp. 16-24.
- Find Law
- Taken for a Ride
- Newspaper clippings about Alfred P. Sloan in the 20th Century Press Archives of the ZBW