Truly the Last Tycoons

There is a highly predictable sequence in the development of a great industrial enterprise. It begins as the reflection of the imagination, energy, and technical or other competence of some person, and it is strongly identified with a family name. But this does not last. In a generation or two, if it succeeds and expands, it becomes an impersonal bureaucracy of its top management. It is not that the offspring of the founder, reared in wealth and committed to self-gratification, are incompetent, although that is frequently the case. It is that any considerable enterprise, public or private, is an expression of organized intelligence. The large firm doesn’t yield in its complexity to the average available business brain or even to the best.

One would be embarrassed to state the obvious except that it is not fully accepted. The current head of General Motors, General Electric, General Mills, or General Dynamics yearns to feel that he is a decisive force. His public relations hands play dutifully to this wish. So, to some extent, does the public. The myth of the individual is still strong in the popular view; persons are exciting and understandable; organization, bureaucracy, is not. And the more romantic tradition in economics still cherishes and makes universal the image of the heroic entrepreneur.

Only in the harsh pecuniary reality do we accept the truth. The stock market reacts with refined indifference to the passage of command in the great corporation from one chief executive to another. No inside informer trades on confidential information to the effect that some CEO has cancer, heart trouble, corporate Alzheimer’s, or deeply preoccupying trouble with his present wife. And even the public relations people do not succeed, for, in further recognition of the reality, no one can really remember who is the current head of General Motors, Exxon, or IBM. The great names of American industry—Durant, Sloan, Rockefeller, Watson—are part of the past except as they are retrieved in modern times by philanthropy or government service.

The great exception, Dupont possibly apart, was Ford. The family and the company remained united for three quarters of a century. The history of this association, along with the family traits, events, and disasters—the nostalgic eccentricity of Henry I; the sad subordination of his son Edsel, now remembered only for the name given to that car; the marriages, divorces, family disputes and festivals, and the heavy alcohol ingestion and alcoholism of the third generation—is the subject of Robert Lacey’s book on the four generations of Fords and the company. Lacey, an Englishman, went to Detroit to write their story, and he is a historian in the Braudel, everything-must-be-included tradition. But there should be no doubt: it is a very good book.

If I’m allowed a personal note, I grew up in southern Ontario, down the lake from Detroit, in the long shadow of Highland Park and the Rouge, and I’ve read and reviewed much of the earlier Ford literature, ¹ including the authorized but far from uncritical histories of Allan Nevins and Frank Ernest Hill.² I assumed that I would catch Mr. Lacey out on various smaller points. Alas for ill intentions. As he is sensible on large issues, he seems reasonably meticulous on small. He is also a lucid and even stylish writer.

Henry Ford was subliterate, unpredictably authoritarian, anti-Semitic, and given to the vagaries of ignorance. The latter is no casual condemnation. It was established by the courts in 1919 in the famous Mount Clemens case when Henry Ford sued the Chicago Tribune for so describing him. Put on the stand, he got the American Revolution started in 1812, identified Benedict Arnold as a writer who recently had done some work at Ford, and said a “large mobile army” was a large army that had been mobilized. It was a suit both sides should have lost.

Ford was, however, a mechanic of no slight aptitude and of appalling self-confidence. Though he was attracted to the gasoline automobile only well after it had been put on the road (and on commercial sale) by the actual inventors, mostly in Europe, he nonetheless put one together, which was something, and raced it, which was more. Then, supported by the organizing genius of James Couzens (later Detroit police chief and mayor and a steadfastly liberal Republican senator from Michigan), to whom Mr. Lacey gives considerable but still insufficient credit, and by the superior machine shops of John F. and Horace E. Dodge, he and his associates achieved a marketable vehicle on the third attempt. Further, and to his unquestioned personal credit, he saw the sales opportunity for a rugged, primitive, exceedingly inexpensive car for the person or family that could come up with a few hundred dollars.

The success of this vehicle, the Model T, was enormous. It was to become an American legend, along with the farmer who, it was told, sent his tin roof to Detroit after it blew off in a storm. He got word back from the company that although it was the worst wreck they had ever seen, it would be repaired. Meanwhile, money rolled in, and forced by the demand, the components and cars had to be assembled ever more rapidly. The moving assembly line, much celebrated, was not an invention but an accommodation to this need. And it is at least possible that the proposal for a five-dollar day, another greatly celebrated innovation of Henry I, came initially from James Couzens as a way of dealing with a costly problem in labor turnover and training.

What is not in doubt is that Henry Ford wanted credit for it all, and, with the imaginative assistance of Samuel Crowther, who was not restrained by any low commitment to fact, went after it. In the long expanse of years from 1913 until the end of World War II, whenever anyone seemed to be invading Ford’s authority, he sacked him forthwith. The executioner for a long time was Charles “Cast-Iron Charlie” Sorenson; then he himself got the ax. By the time of the war years the protection of the Ford autocracy had passed to Harry Bennett and an extraordinary array of company goons and Detroit hoods, several of the latter held in service to Ford by concessions to supply the company with parts. Against the ineluctable march of bureaucracy, unless Bennett’s criminals are to be regarded as bureaucrats, Henry Ford had held his own. The company, in consequence, was nearly dead. So grave was its wartime incompetence, especially in aircraft manufacture at Willow Run, that there was discussion of a government takeover³—or of having Studebaker take charge. Eventually, Edsel Ford having succumbed meanwhile to both cancer and what amounted to extreme parental abuse, his son Henry II was released from the Navy to lead a rescue operation.

This he did at first with unquestioned distinction. Bennett and his operatives were sent packing; corporate corruption was ended; able men—Ernest Breech, Robert McNamara, Charles “Tex” Thornton, and others—were brought in to form a competent managerial apparatus. Henry I, now recurrently senile, surrendered and died. Bureaucracy triumphed, and, its derogatory connotation notwithstanding, the company was saved. Given its size and complexity, there was no alternative. The Ford Motor Company entered upon a series of highly successful years.

In the 1970s, however, the good times came to an end. Henry Ford II began to assert himself as his grandfather had. It was not as damaging; a succession of wives kept him partially distracted, as, according to Lacey, did alcohol. And so, it must be added, did an important array of civic initiatives and responsibilities—Renaissance Center on the Detroit River, improved labor relations, steps against racial tension and anger in the inner city. Nonetheless, he intervened with sufficient frequency in the company to cause trouble for those who seemed to be taking too much on themselves. First there was Semon E. “Bunkie” Knudsen, who had been brought over from General Motors. When he sought to assume too commanding a role, he was abruptly fired. (“History is bunk; Bunkie is history.”) Then after a few years it was Lee Iacocca, Knudsen’s rival and nemesis, who was given his highly publicized sack and sent on to Chrysler. Mr. Iacocca, it should be noted, will not like Mr. Lacey’s book. His misadventures with the Pinto and his personal war with Henry II were justification, Mr. Lacey says or anyhow implies, for his discharge.

This turmoil, as noted, was not wholly comparable with that cultivated by the first Henry. By now there was a large, solid, and in basic essentials, one suspects, fairly competent technostructure. This was not a struggle for complete authority; in greater part it was an exercise in corporate infighting, demoralizing but, in contrast with the final operations of Henry I, not terminal.

And it came to an end. On May 10, 1979, Henry Ford, suffering from some actual heart trouble, came before his stockholders’ meeting—Ford, once the most private of private companies, had long since gone public—and after surviving a nasty intervention by Roy Cohn, gave up effective control of the company. Some subordinate positions apart, the Fords at last were gone. At long last the transition—the inevitable transition—to the anonymous, faceless men. Henceforth no one would know who was running Ford. No single person would be.

The new men do make speeches, but these are written by a committee and then carefully vetted (as, indeed, they were in the days of Henry II) to make sure that nothing noteworthy is said. The members of the team are well-paid, work hard, and, if they do not watch their diet and exercise, are conservatively obese. Their family life, if not perfect, is more tranquil than that of Henry II. No one, at his own risk and cost, will ever write a book about them. Mr. Lacey himself passes over the last years in a few words, for there was no longer anything interesting to say. But, on the whole, things are probably better and safer this way. However, we still try to resist the fact. The great corporate enterprise is meant to be bureaucratic, pedestrian, dull. Rule here, too, by committee. The one thing worse, given the complexity of the task, would be some corporate leader, in the manner of the two Henry Fords, seeking to impose an intrinsically incompetent personal authority.