The First Target

(See Cover)

In determined and confident tones, the powerful United Automobile, Aircraft and Agricultural Implement Workers (C.I.O.) read out the declaration of war. Said the union: the auto industry must raise wages 30% to make up for the loss in take-home pay caused by the return of peace, i.e., the loss of eight hours of overtime when the week was cut from 48 to 40. The industry, said the union, must raise wages without raising auto prices,* which have not yet been fixed.

If the pay raise is not granted, said the union, it would strike one automaker and close all his plants and keep them closed. The spectacle of those tight-shut, silent plants, said the union, should be a lesson to the rest of the industry.

First Assault. Which automobile company would be the target for this all-out assault? For a day, the union kept mum on its choice. Then wily, redheaded Walter Philip Reuther, U.A.W. Vice President announced the first objective: General Motors Corp.

The union had timed its stroke with the care of a general planning an invasion. It could hardly have picked a better time for itself, a worse one for G.M. Swamped by $2 billion in contract cancellations immediately after V-J day, G.M. had sweated and strained to reconvert its 102 plants all over the U.S. It had the biggest job of all U.S. industry; some 35% of the entire reconversion job of the nation. By working night & day, G.M. had cleared acres of tools from its plants, nearly completed installation of hundreds of miles of conveyors, set up dozens of assembly lines. Now the back-breaking job was almost done. The new lines were running in Detroit.

This week, from the spanking new assembly plant in Detroit, where only two months ago G.M. had been building tanks, the corporation rolled out a glistening new Cadillac. It was the first car G.M.'s production lines have turned out since February 1942. It looked much the same as the 1942 model, although G.M. bragged that its sleek body contained 63 improvements.

G.M. had planned to be ready soon to produce all of its cars. Pontiac was scheduled to start rolling off the lines in a week. Buick a week later, and Chevrolet and Oldsmobile in two weeks.

Reconversion had gone so well that G.M. had confidently set its production sights high. In the next year it had hoped to turn out from 1,328,000 to 1,770,000 cars, sell them at prices "somewhat" above those of 1942.

Then suddenly came the U.A.W. declaration of war. How many autos would G.M. be able to make now? How many could the industry make? The U.S. had a big stake in the answers, vastly bigger than the mere desire for new cars. One out of every seven persons in the U.S. depends on the industry in some manner (rubber workers, filling-station operators, etc.) for their living. And G.M. was almost half (47%) of the auto industry.

On the 24th Floor. The crisis between the world's biggest union and the world's biggest automaker would not be settled in Detroit. It would be settled high up on the 24th floor of G.M.'s building near Manhattan's Columbus Circle. There, in the paneled office of G.M.'s board chairman, Alfred Pritchard Sloan Jr., all G.M. problems eventually come home to roost.

Labor had nicknamed aloof, reserved A. P. Sloan "the undertaker." Some of his associates call him "Silent Sloan." But not to his face; they always address him as "Mr." His immense wealth ($43,000,000 in G.M. stock alone) has somehow connected him in the public mind with Wall Street financiers.

Actually, A.P. Sloan is probably the most functional, frill-less piece of human machinery in the U.S. industry hierarchy. He is also close to being its top industrial statesman. Once an associate likened him to a bearing, "self-lubricating, smooth, eliminates friction and carries the load."

At 70, he carries the load of running G.M. with remarkable ease. He still dresses with a touch of the dandy. In his tie, he usually wears a pearl stick pin. A silk handkerchief always cascades from his breast pocket. Usually he gets to his office about 9:30 a.m., goes through his business day in a lope. In winter, he drives from his 14-room apartment on Fifth Avenue; in summer he takes the train into Manhattan's Pennsylvania Station from his 25 acres near Great Neck, L.I., rides the subway to his office.

He ticks off the day's conferences, which always include an hour's long-distance call to Detroit, with metronomic precision.

In his conference chair he squirms, gestures, listens closely (he is slightly deaf), continuously shifts his small, well-shod feet, which usually end up perched on the table. The afternoon clicks by with the same production-line regularity. By 5:30 p.m., he is ready to leave for home with a bulging brief case under his arm. Usually, after dinner with his wife, he works for a few hours. He is in bed by 10 p.m. Two weeks of each month he usually spends in Detroit, hardly stirring out of the grey walls of G.M.'s building there. (He even sleeps in a suite in it.)

The running of G.M. is his work, hobby and dissipation. He does not smoke, takes only an occasional cocktail and has never played golf or any other sport. Sports, Mr. Sloan firmly believes, are an unprofitable waste of a man's time.

Once, when friends insisted that a man in his position should own a yacht, he bought a 236-ft. boat for $1,000,000. But he rarely used it, in 1941 finally sold it to the U.S. Maritime Commission for the Navy for $175,000. When a friend asked him how things were aboard, he gave a businesslike reply. Said he: "The crew of 43 is eating regularly and appears to be healthy."

Completely absorbed in G.M., he talks about it fluently and well, to small groups, in a voice that sometimes has a trace of a Brooklyn accent and a tendency to curl out of the side of his mouth. He reads widely, but except for an occasional detective story, only on economic or technical matters. He has developed the knack of boiling his own economic ideas down to clean, bare bones. Sample: "The whole objective of industry should be to reduce prices. That's what produces employment and expands business." The Way Up. Unlike many another G.M. bigwig, Mr. Sloan did not drive himself to the top by his own supercharger.

He had some help along the way from his father, who had a tea & coffee importing business in Brooklyn, prosperous enough to allow the Sloans to have two or three servants in the home most of the time.

A serious, studious youth, young Alfred got more pleasure out of telling other children how to play than playing himself.

He disliked such things as fishing because he hated to put the worm on the hook. As a student in a Brooklyn public school he gained a reputation as a minor prodigy.

Special tutoring got him into Massachusetts Institute of Technology at 17, hard work won him his degree in three years instead of four. With the help of his father, he got a job as draftsman in the Hyatt Roller Bearing Co. at Harrison, NJ. John Wesley Hyatt, who had invented celluloid, was trying to make a go of a new bearing, with little success. When the company was about to go on the rocks, Sloan Sr. bought a controlling interest in it, put in his son to run it. For months, it was touch & go whether the company would continue to run.

Helped by a steady stream of checks from Sloan Sr. for the weekly payroll, Sloan Jr.

got through the shirt-losing stage. Then A. P. Sloan Jr. got the mushrooming auto industry interested in his bearing for its axles -- automakers had been using an ordinary wagon axle, heavily greased. Soon, Hyatt Bearing was making money hand over fist.

As the auto industry stretched and soared, so did Hyatt. By 1916 Hyatt had a gross capacity of $10,000,000 worth of bearings a year. But A. P. Sloan was worried. His biggest customer was General Motors, which brilliant, mercurial William Crapo Durant had put together by merging a number of auto companies several years before. What if G.M. should decide to make its own bearings? So when Billy Durant offered to buy Hyatt, Sloan jumped at the chance, sold out to Billy Durant for $13,500,000. At 41, with $5,000,000 in his pocket, he might have retired. Not Mr. Sloan. He stepped in as vice president of another Durant creation, United Motors Corp. When Durant merged U.M. with G.M., Sloan became a G.M. vice president.

The Top. He got there just in time to cash in on the 1920 depression, which swept Durant out of the company, almost sank it. The Du Fonts saved it by buying Durant's stock, got bankers to guarantee the payment of the loans. When Pierre du Pont, after acting as president for two and a half years, stepped aside, Sloan slid into his chair. But the Du Fonts kept their stock, now hold 22.7%, virtually a controlling interest. In 1937, Sloan moved up to board chairman.

As head of the biggest U.S. corporation, Sloan has always been an apostle of bigness. He believes that a vast organization, with its money and talent, can make things better and cheaper than a small company. Under his direction, G.M., which had been vast when he moved in, became even vaster. But expansion was not hit or miss. Part of it was something new in the auto industry : a big staff to get all the facts on anything G.M. wanted to do, a bigger research laboratory, under famed Charles F. Kettering, to find out the best way to do it.

Under this spur of research, G.M.

brought forth a string of major auto improvements -- four-wheel brakes (which Sloan first saw on a European car), fast-drying Duco paint, Knee-Action springs, etc. They all paid well. As auto sales, notably those of Chevrolet, soared, so did G.M.'s profits. G.M. became the most profitable manufacturing enterprise in U.S. history, paying out to its 400,000 stockholders some $2,700,000 in dividends alone.

And Sloan saw to it that G.M. was fast on its feet. He kept the mighty organization as fluid and quick-moving as a small company, as competitive inside the corporation as the auto industry was outside. Example: if a G.M. division can buy a part cheaper from an outside company than from a corporation division, it is perfectly free to do so. In the same way G.M.'s cars fight each other for their share of the market. In war, G.M. showed the same fluidity. Example: it was the only auto company which made planes in an auto plant. It took on the hardest jobs it could get from the Army & Navy; Mr. Sloan likes to crack tough nuts. In all it turned out an incredible total of $12 billion in materiel.

No Dictator. Supple and spry as it is, G.M. is still too big a behemoth for one man to run. Sloan does not attempt to do it alone. G.M. is run by what is roughly equivalent to an army's general staff. The chief of staff is Mr. Sloan. It is his mind that plans, his hand that guides. The staff is made up of a policy and an administrative committee. These committees create the broad strategy for G.M., and eight smaller committees, made up of G.M.'s officers, board members and division heads, work out the tactics. Within the strategic plan, the divisions run almost as freely as independent companies. Not long ago Mr. Sloan remarked: "If the whole General Motors central organization should be hit by an atomic bomb, Pontiac could go on just exactly the same."

Pontiac and all the other 41 divisions would go right on because the division heads are, in effect, a general staff for production in themselves. At the top is Charles Erwin Wilson,* 55, who gets $151,000 a year plus bonuses. White-haired, slow-talking, he bossed G.M.'s conversion to war, is now guiding it back to peace. In the U.A.W. strike against G.M., it is Charlie Wilson who will sit down and face the union across the bargaining table. Sloan has never done the actual bargaining with the U.A.W. An engineer by training, C.E. stepped into Big Bill Knudsen's place when Knudsen went off to war, soon showed himself a tough, quick-witted bargainer, and superlative production man as well.

Under him are the division heads:

P: Oldsmobile's Sherrod E. Skinner, 56, a onetime Navy machinist.

P: Pontiac's Harry J. Klingler, 56, who made his mark as a Chevrolet salesman before he turned to production.

P: Cadillac's Nicholas Dreystadt, 56, who learned his fundamentals in Germany's Mercedes plant, put them to good use turning out the best U.S. light tank, the M-24.

P:Chevrolet's Marvin E. Coyle, 57, who will have the tough job of designing and selling the smaller and cheaper Chevrolet which G.M. plans to make.

P: Buick's Harlow H. Curtice, 52, who helped push Buick up to the top spot of G.M.'s middle-priced autos.

Strategic Bombing. As the battle lines were drawn last week, the U.A.W. lined up its own general staff: Secretary-Treasurer George F. Addes, 35, ex-metal worker and leader of the union's far-left wing; Vice President Richard Truman Frankensteen, 38, now running for mayor of Detroit; Walter Reuther, 38, boss of the union's left-of-center faction; and President Rolland Jay Thomas, 45, balance wheel between the warring Reuther-Addes factions.

It was Reuther, boss of the union's G.M. division, and master strategist of the union, who blueprinted the attack on G.M. A onetime tool and diemaker at Ford's, he had learned his strategy in the sitdown strikes of the '30s which had finally brought G.M. to sign a union contract. Since then all union activities pertaining to G.M., such as organizing, bargaining, etc., have been his bailiwick. Ironically, he fathered G.M.'s umpire plan to settle union grievances which kept wartime strikes in G.M. plants lowest in the industry.

But now, as in the fighting '30s, the plan was one of strategic bombing strikes in key plants. Said Reuther: ''We can send thousands of the 325,000 G.M. workers . . . on fishing trips while a few hundred close one plant." He kept the names of the plants to himself, but every G.M. worker knew that the Fisher Body plants headed the list. Without bodies, G.M. could make no cars.

How Long? Meanwhile, the rest of the industry, except for Ford, watched and went on working, getting ready to make cars. Packard hoped to bring its slick line of Clippers out in two weeks; Studebaker. with production almost ready to start, tried to placate the union with a 12-c--an-hour pay raise. Chrysler had little to worry about--for the time being. The union talked of a strike against it too. But, reportedly, Chrysler was so far behind the others in reconverting that its cars might not come out until the first of the year.

Even the Ford Motor Co., which shut down its plants and laid off 50,000 workers rather than struggle with wildcat strikes, could see a silver lining. It had reconverted so fast and made so many cars that it might soon have had to set a price to get them off its hands. If it had, it would have laid itself wide-open to undercutting by all the other automakers. Now it could keep its plants closed while the rest caught up. It was a strategy which might appeal to the entire auto industry. If pressed hard enough, might not the automakers shut down until the new war between labor and management is settled? But could the U.S., which needed the jobs new car production would make, afford that?

*An auto manufacturer may calculate his price in one of two ways: his own 1936-39 profit margin, or one-half the 1936-39 industry average based on 1941 base costs plus increases in basic wages and material costs--or on his 1942 model price, whichever is higher.

*Not to be confused with G.E.'s President Charles Edward Wilson or G.E.'s Engineer Charles Edward Wilson.

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