My Years with General Motors

A personal view, from the earliest days of the motor industry; and form the top. This book offers a truly unique insight.

practical experience

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"A car for every purse and purpose". This was the reason that GM was once the world's most successful company. Alfred Sloan succintly details how he directed the company to take not only financial considerations, but also product planning into account. His hierachy of models, ie Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac, in that order, was stroke of genius, virutally guaranteeing that the entry level buyer who started out with an economical Chevy would continue to buy more expensive GM brands as his income increased. Only now is GM moving back to that mantra, albeit with unfortunate hesitation. Had GM kept each of brands as a distinct marque, there is no doubt the company would still command at least a 50% share of the North American market share.

Alfred P. Sloan Jr. was CEO of General Motors from 1923 to 1946. This book was originally published in 1964. Sloan is seen as the first person to have worked out systematic organisation in a big company, planning and strategy, measurements, the principle of decentralisation - in short, basic concepts of a discipline of management. This is a difficult book to review, since it is more a historic piece on GM's history and development from Sloan's perspective than an autobiography. It does not discuss the individual Alfred P. Sloan Jr., it discusses Alfred P. Sloan Jr. as professional manager. The chapters also come across as business school lessons in different subjects, ranging from general management through to accounting, marketing and compensation strategies. The book consists of two parts. "Part One is an integrated continuous story of the main lines of General Motors' progress, involving the origin and development of the corporation's basic management concepts in the areas of organisation, finance and product." It discusses the extreme growth and development of the automobile industry from the early 1900s through to the early 1960s. It also discusses the methods General Motors introduced used to manage the corporation (Sloan all through the book keeps emphasizing the concept of the corporation). He later became known as a committee-man, because he used different types of committees to get/keep various divisions talking and working with each other. "Part Two consists of individually distinct sections dealing in some detail with engineering, distribution, overseas operations, war and defense products, incentive compensation, and other aspects and branches of the enterprise." This part of the book discusses in greater detail the different experiences and events during Sloan's reign as CEO. It discusses some very interesting subjects, such as the evolution of the automobile, relationships with dealers, World War I and II efforts, and personnel and labor relations. Chapter 23 and 24 are really the conclusion to this book. Yes, this is a great book. It is a TRUE business classic. It discusses all the subjects involved in business from a CEO's point of view. I was amazed to see the amount of detail Sloan has gone through while writing this book, there are plenty of quotes from annual reports, memoranda, conversations, etc. However, some readers will be disappointed by the lack of insight into Sloan's personal life. This particular edition includes an introduction by Peter F. Drucker, who explains why this book is MUST reading for all MBA and business students, but also all people that want to be serious about management. Highly recommended. The book is written in simple business US-English.

Exceptionally lucid, and a clear explanation of how GM went bankrupt once management dismantled Sloan's systems of organization. All auto industry executives should read this now. And think about it.

The Genesis of the professional manager is traced in this book. Sloan categorically states that the manager should not be bogged down by metrics. He should not miss the forest for the trees... You also get a n insight into Emergent strategy

"My Years with General Motors," by Alfred P. Sloan, Jr, Doubleday, NY, 1963, with introduction by Peter Drucker, 1990. Sloan was President/CEO/Chairman of the Board of General Motors from 1923 to 1956. He created the systems and organization that made GM a great corporation. That organization was studied as the model for large corporations for decades. The book also provides a look into the history of GM and its various strategies. General Motors was created by William C. Durant in 1908. Beginning with Buick, he acquired a series of auto companies including Olds, Oakland, and Cadillac, with the idea of competing with the then market leader, Henry Ford's Model T. Durant was the visionary who brought together much of the modern GM, but his organizational style was hands on-producing delays in decision making. He also lacked adequate financial controls. He was forced to resign as President in 1920 when the slowdown of 1921 forced financial difficulties on the company and later on Durant himself caused by margin calls due to speculation in company stock. The Dupont Company was a major investor in General Motors until forced to divest its shares in the 1950s. Dupont's investment began in 1917, when they saw GM as a growth opportunity. They hoped to supplement earnings that might otherwise decline after World War I. In addition, Dupont made the transition from an explosives company to a chemical company after World War I based on surplus nitrocellulose capacity. Plants had been constructed for the Allies during the war to make smokeless powder and later were sold at distress prices. Nitrocellulose proved suitable in auto paint and in the fabric coatings used on auto tops. The investment gave Dupont access to the chemical needs of the auto industry during a major growth phase. Initially Dupont personnel staffed the GM Finance Department. Pierre S. Dupont came out of retirement to succeed Durant as President of GM. He brought experience in the management of a large corporation. Sloan, meanwhile, came up through a manufacturer of roller bearings acquired by GM. He rose steadily through the ranks and succeeded PS Dupont as President after his resignation in 1923. A strategy had evolved to compete with Ford on styling and quality. Ford had over 50% market share; no one could compete with his costs on much smaller volume. But he kept prices low by making the same model with little or no change year after year. That made Ford slow to adopt improvements. GM planned to compete with Chevrolet, which was to have similar costs based on an air-cooled, copper-clad engine. Air cooling avoided the need for a water jacketed engine block, water pump, radiator, and associated plumbing-a considerable savings. GM Research under Charles Kettering was confident the engine would perform, but the operating divisions were uncomfortable with this unproven engine design. Overheating was a problem which Research worked to resolve, but then 1923 proved to be a strong sales year, and a decision was needed. PS Dupont had put his faith in the copper-clad engine, but it was dropped soon after his resignation. Some say Corvair is the only air-cooled GM model to reach the market (after the VW Beetle established practicality). Sloan makes clear that GM is primarily an engineering company. Most executives have engineering backgrounds. The company is heavily committed to developing new technologies and bringing improvements to market. Sloan pioneered decentralized management to allow divisions to make their own decisions promptly. Headquarter's role was to set policy. He then used corporate committees to promote interactions where appropriate such as in purchasing. He created a return on invested capital system to measure performance of the divisions. This is presumably the system that favored production of SUVs rather than small fuel efficient vehicles. It was Sloan who came up with the pricing brackets that differentiate the GM divisions. (Pontiac was created in 1925 to fill in a gap in the line as a low priced six cylinder model.) He also instituted installment selling (and GMAC to finance it), used car trade-ins, the closed auto body (and added Fisher Body to the GM family), and the annual model change. The annual model was intended to leverage the trend toward comfort, convenience, power, and style in selling new cars. Sloan took pride in the steady improvement in auto technology during his tenure. He mentions the development of ethyl gasoline and high compression engines, improved transmissions-eventually automatic transmissions, balloon tires and improved suspensions, and in 1923, Duco lacquers that made it possible to finish an automobile in an 8 hr shift rather than the two to four weeks once required. Duco was also available in a variety of colors. The first production vehicle was the "True Blue" Oakland in 1924. Styling was not ignored. Harley Earl was brought in as stylist in 1926, initially to assist the Cadillac division. His focus was to lengthen and lower the American automobile. Strong dealers were considered essential to success. GM helped its dealers implement accounting methods to better manage their businesses. Financing was available to assist promising dealer candidates who lacked capital. GM was a major factor in the development of diesel locomotives for railroads. The business was a logical extension of internal combustion engines, but also a diversification should recovery of auto sales be slow after the Great Depression. GM's Electromotive Division was the leading manufacturer of diesel locomotives for over 50 years. GM's venture into household appliances, later Frigidaire, began in 1918, when Mr. Durant acquired Guardian Refrigerator Company of Detroit, a home refrigerator company. The initial machines were large and cumbersome. The 1922 model weighed 834 lb. Weight was reduced with an air cooled compressor and air cooled coils in 1926. GM Research in co-operation with Dupont invented Freon-12 as a non-toxic, non-flammable refrigerant gas in 1931. In 1929 they had made 1MM units; in 1932, 2.225MM. Competitors included Kelvinator (1914), GE (1927), Norge (1927), and Westinghouse (1930). Frigidaire was expanded to include a full line of household appliances after World War II. GM ventured into aviation in the days when the piston engines used were not unlike those in motor vehicles. GM had an interest in Bendix Corporation, North American Aviation, TWA, and Eastern Air Lines. Soon after the 1927 Lindbergh flight, some thought personal airplanes, called flivvers, might be in the future. The initial investment was the US division of Fokker Aircraft, the famous Dutch aircraft maker. GM bought a 40% interest while they made planes for the US military and commercial airlines. Later Fokker US was renamed General Aviation and merged into North American Aviation. North American was a holding company that owned Eastern Airlines and stock in TAT, predecessor to TWA, and Western Air Express. The Air Mail Act of 1934 prohibited airplane manufacturers from owning airlines. TWA stock was sold in 1935; Eastern in 1938 (when Eddie Rickenbacker arranged backing to buy the airline). In 1937, Allison Div. of GM completed development of a 1000 hp reciprocating aircraft engine that was widely used in fighter aircraft in World War II. By 1947, 70,000 engines had been made at the plant in Indianapolis. During World War II, the company rapidly converted to production of military equipment. A major problem was the shortage of skilled manpower. Tanks were welded in a merry-go-round system that required learning only one simple weld rather than full scale training. In his later years Sloan created the Alfred P. Sloan foundation to fund basic research, but especially to support talented researchers. He also participated in formation of the Sloan Kettering Cancer Hospital. The book ends with a discussion of labor relations and incentive programs. The appendix includes sales by division for 1909 to 1962, and staff organizational charts. Indexed. This is a highly readable account of the GM story. Sloan omits some unpleasantries. He does not mention the death of workers in the development of leaded gasoline, GM's role in supplying Nazi Germany through its Opel division in World War II, or the violence of some auto strikes. Most will find it fascinating reading.

This is a book that will appeal to those who have an interest in the history of corporate organization, strategy development and product innovation. To others, it may seem dry. What is astounding about this book is seeing concepts that were developed between the 1920s and 1950s which are still in place in most large scale corporations in 2024. What this book provides is the “why”. The book shows that modern thinking isn’t always modern at all - many works were anticipated in this book; a good example of this were some of the concepts within the “innovators dilemma”. Overall a great book.

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