1955 Harlow Curtice FROM THE TIME ARCHIVE Jan. 2, 1956
When the Founding Fathers set these words—A New Order of the Ages—in the
Great Seal of the United States, they had in mind a social order that would
guarantee the individual political and personal freedom under law. They only
dimly foresaw that they were also establishing a new economic order that would
break the bonds of scarcity that had bound men's actions, thoughts, hopes and
dreams in earlier times. In 1955 this new order of the world—the free,
competitive, expanding American economy—not only showed the world the way to a
plenty undreamed of only a few years ago, it was also the keystone of the
defense of the West against the Communist world. Because the U.S. was strong,
the West was strong—and more prosperous than it had ever been.
"Our prosperity could never exist," said Sir Norman Kipping, director
general of the Federation of British Industries, "without a prospering United
States."
"Let's face it," said Wilhelm Vorwig, general manager of the German
Automobile Manufacturers' Association, "our present achievements are based on
the copying of the American economy."
Because of the success of the American economic system, the U.S. rolled
through 1955 in two-toned splendor to an alltime crest of prosperity, heralded
around the world. Much of this prosperity was directly attributable to the
manufacture and sale of that quintessential American product, the automobile.
Some 8,000,000 of them were produced and sold, and a good half of them were
made and marketed by General Motors under the direction of President Harlow
Herbert Curtice—the Man of the Year.
Yet this production alone would not make Harlow Herbert Curtice, 62, the
Man of the Year. Nor would the fact that he is president of the world's biggest
manufacturing corporation—and the first president of a corporation—and the
first president of a corporation to make more than $1 billion in net profits in
a year. Curtice is not the Man of 1955 because these phenomenal figures measure
him off as first among scores of equals whose skill, daring and foresight are
forever opening new frontiers for the expanding American economy by granting
millions to colleges, making new toasters that pop up twice as fast, or
planning satellites to circle the earth. Harlow Curtice is the Man of 1955
because, in a job that required it, he has assumed the responsibility of
leadership for American business. In his words "General Motors must always
lead."
How does Curtice lead?
Bet a Billion. In the early days of 1954, there was gloomy talk of a
slowing—and possible end—to the postwar boom. Though the economy was still
strong, business was falling off and the total of jobless was growing, along
with uncertainty about the future. In this critical period, "Red" Curtice stood
up before 500 of the nation's top businessmen and industrialists and gave his
own pronouncement on the future. General Motors he said, would spend $1 billion
to expand its plants for the increase in auto sales to come. Screamed the
headlines: G.M. BETS BILLION: NO SLUMP.
Curtice was aware that the U.S., with its growing population, growing bank
accounts, growing suburbs and decentralized industry, could well afford to buy
more new cars than it ever had before—if everyone had confidence that the boom
would continue. As head of G.M., with more income and more resources at his
command than most sovereign nations, he was in the best position to do
something about confidence. As a result of his billion-dollar bet, confidence
spread throughout G.M.'s own sizable world. The 514,000 employees in 119 plants
in 65 cities in 19 states quit hoarding for layoffs and began buying—among
other things, autos. By midyear most of the 17,000 Chevrolet, Pontiac, Buick,
Oldsmobile and Cadillac dealers in the U.S. were selling more new and used cars
than they ever had before. Some 21,000 independent G.M. suppliers had to step
up their buying of steel, copper, aluminum and other materials. Ford Motor Co.,
$500 million already ticketed for expansion, added $625 million last spring to
expand its plants. Then Chrysler added another billion. Meanwhile, Curtice had
upped his own expansion spending to $2 billion. On all sides, other businessmen
also raised their own sights, putting more dollars into pockets to spend, and
sending the economy booming through 1955's record year. Says Curtice: "People
had money and credit. I think I pushed them off the fence to the right side."
Time for Decisions. The Russians, of course, did not like Curtice's kind
of confidence, but they finally gave up their repeated predictions of an early
collapse the U.S. economy and, for a brief period even showed signs of thawing
the cold war. Because that brief thaw took place while U.S. military and
economic strength remained steadfast, 1955 was not—as many thought it might
be—a Year of Decision. It was, rather, a Year of Decisions, as the U.S. turned
from preoccupation with crisis to get on with the business of making America
work. Items:
— In literature, Novelist Herman Wouk upset the cliches by letting Marjorie
Morningstar discover the difference between modernist sophistry and durable
values like home, faith and family. Marjorie Morningstar was no masterpiece,
but she indicated that American intellectuals could find their voices after
years of what the late Russell Davenport called "this inability to explain to
others our most cherished goals."
— In giving, Henry Ford II announced the Ford Foundation's grant of $500
million to privately supported colleges, universities (for increases in
teachers' salaries), nonprofit hospitals and medical schools; including Ford's
record-breaker, private foundations, prospering with business, passed along
nearly a billion dollars in grants during 1955.
— In labor, George Meany, the plumber who has never been on strike, became
president of the new, 15-million-member American Federation of Labor and
Congress of Industrial Organizations. Among his first acts: a friendly speech
to the National Association of Manufacturers, and a suggestion that unions
invest their millions in housing projects. Among his reasons: union members are
now in such high income brackets that they can no longer qualify for
Government-subsidized low-rent housing.
— In law, Chief Justice Earl Warren read out the Supreme Court's unanimous
order calling for desegregation of public schools "with all deliberate
speed"—a classic application of the unchanging principles of constitutional
law to ever-changing, everyday U.S. life.
But the decisions that men saw changing the skylines of the cities,
turning poor farm land into prosperous factories (and parking lots), bringing
new credit and buying power into backward areas—these were the decisions of
American businessmen. (In fact, while the Supreme Court attacked segregation in
schools, businessmen attacked it in industry by: 1) raising living standards of
Southern Negroes, and 2) teaching whites and Negroes to work side by side in
new Southern factories.) All through the year, industry exploded to catch up
with the twin demands of the mid-20th century: a rapidly rising standard of
living and a long-range increase in population.
Everywhere that industry grew, the managers studied how to pull all the
far-flung parts together and make them work more efficiently—so that, in
effect, share-holders, executives and workmen would get increasing return from
an hour's productive work. And what they studied hardest was the amazing
efficiency of General Motors and how it had achieved it.
Shares for All. Like most of today's great corporations, G.M. achieved it
because giants of old had laid the foundations with big, visionary ideas. The
man who founded General Motors was William C. Durant, an ex-carriage,
ex-bicycle, ex-wagon maker who first hit the jackpot by backing an auto
designer named David Buick. In 1905, Billy Durant capitalized Buick for a
staggering $10 million, three years later tried to corner the auto
manufacturing business. (Henry Ford agreed to sell for $8,000,000, but at the
last minute Durant's bankers backed away from the $2,000,000 down payment.)
Durant settled instead, in 1908, for a combine that included Buick, Oldsmobile,
Cadillac Northway and Oakland, and called it the General Motors Co. Detroit
called it "Durant's folly" until, in 1910, G.M. sold $34 million worth of
automobiles and netted $10.5 million (since it was before taxes, literally).
When Durant's optimistic expansions and mergers ran him out of cash, the
bankers began talking of the "saturation point" in the auto market, and moved
in on him. After Durant went out of G.M. he drew on his enormous prestige with
Chevrolet as part of a plan to regain control of G.M. In little more than a
year Chevrolet was valued at a fabulous $ million. He offered a bargain trade
of five shares of Chevrolet for one of G.M., while he also bought G.M. stock
(G.M. stock went from $82 to a high of $558 within a year). Thus he gained
control of G.M. and added Chevrolet to the corporation. Meanwhile, the Du Ponts
had become large G.M. stockholders, and when Durant went under in the 1920
crash (trying to bolster the price of G.M. stock), they bought him out. (Four
months later, he incorporated the $5,000,000 Durant Motors, which, on the
strength of his name, had $31 million in orders before it had a factory site.
He got out of automobiles in 1926, lost everything in the 1929 crash, and died
in 1947 at 85.)
Redheaded Energy. Billy Durant endowed G.M. with optimism (1921 was G.M.'s
only deficit year), a reputation for good automobiles, a flair for sales, and a
spirit of unsophisticated boldness and high adventure that is still the
hallmark in Detroit. The man who cast G.M. in present its mold is Alfred P.
Sloan Jr., an engineer by training and an organizational genius by instinct. He
became president five years after his company (United Motors) was merged with
G.M. With him he brought a new concept of decentralized organization that is
probably as significant to the science of corporation management today as the
U.S. Federal system is to political life. Sloan bred independence and
intramural competition, handsomely rewarded hard work and the inquiring spirit.
He welded all these diverse talents into a powerful management team that was
designed to develop leaders just as engineers develop cars. As G.M.'s eleventh
president, Harlow Curtice is as surely a product of General Motors as Dwight
Eisenhower is of the U.S. Army.
Curtice brought little but redheaded energy with him when, with only a
business-school education, he landed a job in Flint, Mich, as a bookkeeper for
the AC Spark Plug Division of G.M. in 1914. His energetic curiosity led him
behind the ledger down into the plant, to find out what his figures meant in
terms of men and production. In a year he knew AC so well that, at 21, he was
made comptroller. At 36 he was AC's president and one of G.M.'s junior-grade
hot prospects. Put in charge of ailing Buick, he pulled the division out of a
mid-depression slump, ran it through the war years. It was the
fourth-biggest-selling car when he was boosted to a G.M. vice presidency. In
1948, as the postwar market got rolling, G.M. President Charles Wilson made
Curtice an executive vice president. Three years ago, when Charlie Wilson went
to Washington to be Secretary of Defense, Red Curtice, at 59, became president.
His current salary, plus bonuses: more than $800,000 a year.
"The rough process of elimination at G.M.," says a knowing competitor,
"absolutely prevents a phony from getting that job."
Legitimate Prince. Curtice would be the first to snort at the suggestion
that he is a throwback to Billy Durant—because his Sloan-bred sense of
organization rebels at the memory of Durant's wild and woolly ways. But
Curtice, the corporate statesman, and Durant, the irrepressible, share an
uncanny instinct when it comes to the average American's feelings about
automobiles—an even sharper sense than the engineering-minded presidents
between the two who developed the annual model change and the customer research
system. Curtice is generally typed as a supersalesman, but he is much more: he
is the legitimate prince of the auto buyers, in close communion with his
subjects, the size of their garages, their chance for advancement (say, from
Chevrolet to Pontiac), their bank accounts, and the exact degree of new
styling, e.g., the panoramic windshield required to make them accidentally stop
by a dealer to see how much he might give on the old car.
Red Curtice loses some of the friendly crinkles around his eyes when he
settles down between his two desks to run the corporation from the 14th floor
of Detroit's General Motors Building. As he scans the reports from G.M.'s
earth-girdling ventures in autos, Frigidaires, diesel locomotives, radios and
earth-movers, he becomes again the eagle-sharp comptroller who can tell from
figures how men and machines are doing. His predecessor, rumpled Engineer
Charlie Wilson, used to gab cheerfully with friends, and occasionally gave
friendly advice to some of his lesser competitors, such as Nash and Kaiser.
Curtice rarely finds time for such activity, a fact that has not endeared him
to his fellow corporation executives outside of G.M. For example, Curtice is a
member of the Department of Commerce's Business Advisory Council but hardly
ever attends the meetings.
But inside G.M., Curtice's brisk efficiency is genuinely respected. Wilson
used to keep the staff (including Executive Vice President Curtice) waiting
around for hours while he made decisions. But Curtice is swift in decision and
rarely wrong. If executives do not expect compassionate sympathy, they do
expect—and get—justice. One result: there is little infighting in G.M.'s
executive suites. Says Executive Vice President Albert Bradley: "We are all
living in glass houses, and we go to great lengths to play fair with each
other."
Fast Company. No G.M. president could ever be a dictator, even if he had
the inclination, because the unwritten constitution of G.M. has its full quota
of checks and balances. Big decisions at the top are made in committee, and the
president must sell the top committees (of which he is a member) on his
policies before he can execute them. Curtice had to sell the powerful
Operations and Financial Policy Committees (which report directly to the board)
before he could bet his big billion in January 1954. Says a fellow
committeeman: "He prepares his presentation for the committees just as if he
expects 100% opposition."
The committee system can move fast when it has to: for example, after the
laments of a few G.M. dealers were widely publicized in the hearings before
Wyoming's Senator Joseph C. O'Mahoney last month, Curtice and the Operations
Policy Committee went into session one Sunday, came out that evening with a
far- reaching decision to extend all G.M. dealers' contracts from one to five
years. This also indicated how the committee system can put pressure on
Curtice. He thought that the complaints of dealers were exaggerated, that he
did not have to pay much attention to them. But other top men thought that
Curtice was wrong, and they made no bones about saying so.
The G.M. constitution reserves considerable power to the semi-sovereign,
ever-competitive divisions. Curtice could probably fire a divisional vice
president outright if he wanted to act out a Hollywood version of the tycoon,
but he would not. The unwritten law demands that such a grave personal decision
be discussed up and down the committees. A divisional vice president with the
prestige of Buick's Ivan Wiles spends a huge operating budget as he sees fit,
and goes to the top only when he thinks his actions might affect the other
divisions, or when he wants new capital.
Fast Recovery. Only in emergencies does Curtice move in and take over.
Soon after he became president, he stepped in to straighten out the Allison
Division (aircraft engines), which was in trouble because it had been afraid to
invest money in research and development unless armed forces orders were
assured. By contrast, Competitor Pratt & Whitney had sunk millions in
engine development.
In 1953 G.M.'s Engines Vice President Cyrus Osborn told Curtice that there
were three alternatives for Allison: 1) continue as is, "which is ridiculous";
2) get out of the business entirely; or 3) make the moves necessary to ensure
leadership. Curtice said that he would "only be satisfied with leadership."
Together Curtice and Osborn spent three months visiting military and airframe
people, then laid out a $74 million investment to produce "a whole new family
of aircraft engines."
Last week Curtice and Eastern Air Lines Chairman Eddie Rickenbacker
jointly announced that Eastern's 40 new Lockheed Electra airliners, scheduled
for service in 1958, will be powered by $26 million worth of Allison turboprop
engines.
Since Curtice's drive for leadership is as relentless as a turnbuckle, his
success has naturally brought some new strains for G.M. In the furiously
competitive race for auto sales, relations are more tense between G.M. and its
major competitor, Ford, than ever before. Ford executives, who used to meet
G.M. friends for a Sunday round of golf, now only nod perfunctorily when they
bump into the G.M. crowd at the Bloomfield Hills Country Club. G.M. blames Ford
for giving in last summer to the United Automobile Workers' Walter Reuther on
the guaranteed annual wage. Fordmen blame G.M. for keeping silent while Reuther
turned on Ford first.
Stop Sign. Curtice's problems in Washington are tougher to deal with. With
annual sales ($13 billion) almost twice as large as those of the second-largest
corporation (Standard Oil Co. of N.J.), G.M. is an ever-tempting political
target. Moreover, some of Eisenhower's economic advisers are complaining about
the rapid increase in consumer credit (up $4 billion in the first nine months
of 1955, to $34.3 billion), and at the automobile industry's $14 billion share
of it (although repayments are remarkably regular and repossessions low).
Because Defense Secretary Wilson is an ex-G.M. man, G.O.P. politicians have
tactfully suggested that he taper off on G.M.'s defense contracts. They are now
down from 19% of G.M.'s business in 1953 to less than 10% in 1955, although
Pentagon purchasing agents give G.M. topmost marks for quick decisions and
on-schedule delivery.
Over in the Justice Department's Anti-Trust Division, the trustbusters
keep a close watch on Curtice. The Administration tactfully told him to settle
for no more than 50% of the auto market and keep out of trouble.
Curtice will not—and for reasons that are fundamental to the vitality of
any large, competitive corporation. "If you stand still," says G.M. Chairman
Sloan, now 80, "you go behind." Competition demands efficiency, and the whole
efficient, smooth- running corporation could soon turn sour, as the Allison
Division did, if it were forced to slow down to an artificial pace. Profits, in
a modern corporation, have a function beyond providing earned surplus and
dividends (and taxes). Under G.M.'s cost-accounting system, they are the key
indicator of worth of divisional management, worth of product, personnel policy
and planning.
Curtice refuses to talk in percentages of the car market- talks instead in
terms of expanding gross national product. "We have 3% of the G.N.P. now, and
we won't have any less than 3% in 1956," he says. Translating into automobile
figures, he predicts 1956 U.S. auto production at 7,060,000 (plus 1,190,000
trucks)—down about a million from 1955. G.M.'s share, if it holds its own,
will be 3,500,00 cars.
Dawn Patrol. Curtice's genial competitor, Chrysler President Lester Lum
("Tex") Colbert, thinks he works about as hard as any man should, trying to get
Chrysler back to 20% of the automobile market. "But most every Monday morning
when I'm shaving out home in Bloomfield Hills," says Colbert, "I hear old Red
Curtice's airplane flying in from Flint. And every Friday night when I'm home
and tired and walking my dog, I hear Red Curtice flying home again." When he is
in Michigan. Curtice spends most of his week nights not in his home in Flint
but in the nine-room suite in the G.M. Building. On top of this, he is often on
the road for days at a time. During the course of a year he probably glad-hands
more people than the President of the U.S. But he likes it all—the headaches,
the demanding hours, and the vast rewards.
In many ways he lives a life that is beyond the comprehension of most of
his car owners. Platoons of subordinates jump when he twitches. Garages filled
with gleaming limousines and beaming chauffeurs stand ready to transport him
wherever he desires. A private 18-plane air force of multi-engined, red-
white-and-blue airplanes is at his disposal. Private secretaries and
public-relations men take care of bothersome detail, see to it that Cadillacs,
hotel suites, restaurant tables and theater seats are there when and where he
wants them. High-salaried assistants smooth his path, greet him wherever he
arrives, order his drinks, fetch his newspapers.
Beneath all the glitter, Curtice is regarded by friends as essentially
still the small-town boy who came out of Petrieville, Mich. He likes to watch
the fights and The $64,000 Question on television, read the papers, hunt, watch
the Detroit Tigers (the night games only). He puffs casually on Luckies, likes
his Scotch and soda strong and unstirred. His idea of Saturday fun in Flint is
a run through the Buick plant in the morning and a poker game with his City
Club cronies in the afternoon. He lives in a relatively modest red brick corner
house, with a three-car garage. In the garage: his wife's Buick Roadmaster
convertible, daughter Dorothy Anne's Buick Century convertible, and his
personal, flashy Buick Skylark convertible, now being hopped up with a new
experimental engine and transmission.
Safe at Home. Flint is the world's most General Motorized city, and it
says more about the state of the nation today than volumes of statistics. To
begin with, the tricked-up Buick of the highest salaried man in the U.S. is
hardly noticeable among the bright new Buicks and Chevrolets along Flint's main
streets. Flint is the home of the main Buick and Chevrolet plants, the Fisher
Body. AC Spark Plug and Ternstedt Division (G.M. auto hardware).
There is a job in the Flint area for virtually anyone who wants one. Of a
work force of 135,400, some 86,700 are employed by G.M. The 83,000 hourly
employees draw wages averaging $100 a week—with some skilled oldtimers at the
forge plants earning $10,000 a year, Flint has an automobile for every 2.8,
persons, v. a nationwide average of one for every 3.7. Nearly 80% of the
residents own their own homes, and 80% of the homes have television (even
though 15-or 20-ft. aerials must be stuck on rooftops to pick up Detroit).
Spending is heavy, but savings accounts are going up too. "People have got
money," says President E.S. Mulholland of Flint's largest department store.
"They feel safe."
Sitdown Strike. In 1937 much of Flint was sprayed by tear gas as the
U.A.W. staged its first major sitdown strike against G.M. Today most people
agree that the U.A.W. raised Flint's level of prosperity by getting its members
a bigger share of G.M.'s increasing income by continuing to increase the
income.
Management and employees are a little proud of the fact that G.M. was the
first automaker to accept the labor-dispute umpire system (in 1940), first to
hitch link wage increases to productivity. Last year G.M. lost an average
(nationwide) of only three minutes in labor troubles for each wage earner.
Today's happier version of the sitdown in Flint occurs when local U.A.W.
leaders, G.M. brass and civic bigwigs sit down at a luncheon meeting to plot
the Community Chest campaign.
Flint's current No. I campaign is culture. The city is building housing
projects, new churches, school buildings and a huge $5,000,000 civic center. In
addition the Flint Junior College is expanding to become the nucleus of the new
Flint campus of the University of Michigan which will open next September. One
of its main structures: the Harlow H. Curtice Academic Building. Flint's adult
education program has an enrollment of 40,000 people, who study everything from
classical languages to the fine art of tying trout flies. The Flint Community
Music Association comprises 42 independent groups, including a symphony
orchestra civic opera, and square dances that draw as many as 5,000
people—dancers all.
This Town & Flint. Give or take a few dollars and a few square dancers
Flint could represent—qualitatively—almost any industrial city in the land.
It could be Arlington, Texas, which jumped in population from 7,000 to 35,000
in five years, as new plants moved into the area between Dallas and Fort Worth,
drawing most of their new employees from agricultural areas. It could be Los
Angeles, which added as many factory workers in the past five years (27,400) as
in the previous 21. Or even New England, which put its brains to work and found
new research and electronics industries after textiles slumped. Or Buffalo,
Cleveland or Toledo, little Detroits all, and all building in anticipation of
the opening of the Lake Erie portion of the St. Lawrence Seaway in 1959.
How far is Flint from London, Paris, Madrid, Rome, Mexico City and the
other cities of the non-Communist world? Not far, in the sense that a
prosperous, strong U.S. economic system is clearly the basis for the
record-breaking prosperity of the whole free world.
What's Good for Flint. In another sense—the sense of setting an
example—Flint is farther away but getting closer. Britain, eyeing the freely
competitive U.S., has this year been hearing its strongest parliamentary
attacks on monopolies, and may wind up with the first anti-monopoly bill in its
history. Last summer, news of the U.A.W. Ford guaranteed annual wage agreement
rocked the national convention of France's 2,000,000-member Confederation
Generale du Travail, and seriously weakened Communist control in today's
booming Federal Republic of Germany, an industrialist who has not been to the
U.S. to study production methods is not seriously listened to. In Mexico,
Sears, Roebuck & Co., G.M. and Ford have raised wages, granted pensions and
health plans, and given Mexico's unions new leverage for working on rich local
capitalists. In Saudi Arabia the Arabian American Oil Co. has staked hundreds
of local bright young men to prosperous careers as importers, contractors,
teachers. (Its American methods have also created a feeling of sullen
restlessness among other natives who are just discovering what the good life
looks like.)
Harlow Curtice does not go in much for high-flown economic or social
theory, but he is convinced that what Flint has found to be good can be
emulated by the rest of the world. Thus, since late 1954 he has committed G.M.
to $200 million for European expansions, primarily of its Opel plant in
Russelsheim-am-Main, Germany, and its Vauxhall plant in Bedfordshire, England.
Also, he is bucking local resistance to move both companies toward the annual
model change. He wants to create a secondhand market so that cars can be bought
by everyone. At the same time, he is pressing European automobile men to move
with G.M. toward a 40- hour week, while maintaining the rate of pay of the
current 48- hour week.
Newer for New. Some American thinkers shake their heads at the materialism
and the waste implied in the annual model change. But, as in Billy Durant's
day, their thinking takes no account of the nature of the American system,
where something newer must replace the nearly new so that those who cannot
afford the newer can still afford what was once new, whether it is a house, a
sewing machine or a car.
But even the sleekest, hottest automobiles, as the proudest new car owner
will ruefully admit, are not ends in themselves, but only means—means to roll
free of the city into the countryside, to swing from the farm into town for a
school-board meeting or a movie, to move the family across the country to find
a better job, or to drive the kids to school and the beach and pick them up
again. And so it is with the economic system that Harlow Curtice represents.
This, too, is but a means to something far beyond fad and fashion, perhaps to a
new level of community enterprise and culture-by-plan, as in Flint. Not far
distant is the time when Americans need spend comparatively little time earning
a living. Then they will be able to unleash their considerable powers for
cultural, ethical and spiritual accomplishments of a magnitude yet unimagined.
COVERS GALLERY: Click here to see the cover image from 1955