Bookshelf: My Years With General Motors by Alfred P. Sloan, Jr.

Alfred SloanIf you want to learn the real story of how General Motors and the American auto industry were created, there’s no better place to start than with this book. Here’s a review. 

 

 

Alfred P. Sloan was so talented as a finance and organization man, we tend to misplace the fact that he was trained as an engineer—at MIT, where he graduated at 20. As the young CEO at Hyatt Roller Bearing, he grew that business into an industry leader, whereupon it was snatched up in 1916 by W.C. Durant’s United Motors combine. Sloan was appointed president at United Motors, and when United was acquired by General Motors in 1918, he rose quickly through the ranks there as well. In 1923 he became CEO at GM, where he served as president or chairman until his retirement in 1956. In that time the company grew into the greatest industrial enterprise the world had ever seen.

Sloan’s business memoir, My Years at General Motors, was published in 1964. A complex and detailed study of a global corporation, the book (available in multiple formats at Amazon and elsewhere) is nearly impossible to summarize in a sensible way. However, we can focus on a few of its key themes.

+   GM in Form and Substance: In assembling GM, founder Billy Durant had created a leviathan: automakers Buick, Cadillac, Oldsmobile, Chevrolet, and dozens of associated manufacturers. Sloan sensed tremendous substance in the vast enterprise, but it was without form. Durant was a creator, not an organizer. Administration bored him. Sloan’s mission was to impose structure on Durant’s fabulous creation.

+   Centralized Policy/Localized Decision Making: Partly from his own experience at Hyatt, Sloan recognized that the individual companies that made up GM were each founded and operated by capable, independent executives. Sloan sought to empower these managers to run their businesses without undue interference, while also persuading all hands to pull on the same end of the rope. In Sloan’s vision, general policy would be formed at the highest level with input from across the corporation, but individual decisions would be made locally, as close to the problems as possible. Meanwhile, the corporation would hold the purse strings for all the divisions, exercising authority through a central finance committee and rigorous accounting controls.

+   A Car For Every Purse And Purpose: Sloan and his managers didn’t scratch-build a product lineup reflecting this famous phrase. In fact, Durant had bought up a random assortment of successful carmakers without any discernible strategy. In large part, Sloan allowed the GM brands to carve out their own slots in the market, fine-tuning prices and models until there was a clear vertical product hierarchy with Cadillac at the top, Chevrolet at the bottom, and Buick, Olds, and Oakland in the middle.

Sloan’s attempts to expand this lineup met with mixed results. The GM companion brands to Buick and Oldsmobile, Marquette and Viking, were instant flops. Cadillac’s junior LaSalle brand sold well, but mainly by cannibalizing Cadillac sales. Only Oakland’s companion Pontiac brand (a “six-cylinder Chevrolet” in Sloan’s plan) was a market success, replacing Oakland in 1932.  But Sloan’s basic approach was sound, and it was the future of the industry. With the Model T, Henry Ford built but one model and called it good enough for everyone. At GM, Sloan laid out a full range of products in price, taste, and features, and eventually the company claimed 52 percent of the domestic auto market.

 

1927 Chevrolet Coach Alfred P. Sloan Jr.

 

We’re barely scratching the surface of Sloan’s book here; it’s a dense work with countless insights into the creation of General Motors and the auto industry at large. There are fascinating revelations on nearly every page, and while the subject is complex, the reading is enjoyable. Sloan offered one prediction in his classic business text that has proven painfully accurate: He observed that maintaining its position atop the industry would be a far greater challenge for GM than getting there.

True enough, the company has stumbled in recent decades, declaring bankruptcy in 2009 while its domestic market share has slipped to 18 percent. Industry observers say that some of these troubles came as GM strayed from Sloan’s original vision, and others arose as the structure grew increasingly obsolete. Either way, My Life With General Motors is necessary reading.

 

1938 Buick Knudsen Curtice Sloan

2 thoughts on “Bookshelf: My Years With General Motors by Alfred P. Sloan, Jr.

  1. Please give me link for downloading of “My years with General Motor/

    I too need it

    Special Thanks

Leave a Reply