(UPDATED FROM 5/7/2021)
Warren Buffett has argued that the Number 1 problem a company can face is choosing the wrong chief executive officer.
Buffett, who is CEO of Berkshire Hathaway, has said that over the course of his career he has seen CEOs who “don’t know what they are doing” but manage to stay in power because “they know how to put on an appearance,” they “are personable” and the “directors like them” (La Roche, 2021).
This got me thinking about the leadership of postwar U.S. automakers: Who were the worst leaders — and more importantly — why? To keep my list manageable, this essay is only focusing on the postwar period, which I would define as from 1945 to 1979. I am also listing only my top five, although from other Indie Auto stories you can easily guess who else might end up on a longer list.
Note that I am using the more general term “leader” rather than CEO to acknowledge that the most influential person at an automaker may not have always been responsible for managing day-to-day operations.
Postwar auto industry offers a wealth of choices
One challenge in assessing the leadership of American automakers is that the sheer scale of the industry’s collapse cannot reasonably be blamed on a few leaders. The automakers’ myopia was built into its very structure and culture. By the same token, the number of higher-level executives who challenged the industry’s groupthink was relatively small during the postwar period.
Even so, picking a top-five list can be helpful in thinking about what were the industry’s biggest inflection points. So here is my first crack at a list, in rough order of importance and leader incompetence.
1. Henry Ford II: Recklessly spending his inheritance
I don’t get why Richard Johnson (2005) wrote in such glowing terms about Henry Ford II and his “Whiz kids.” He led Ford’s revival in the 1950s but also made big enough mistakes to sink a smaller automaker. Indeed, I suspect that the only reason Henry II continued to lead the Ford Motor Company in the early-60s was because his name was on the building. Of course, it also helped that the Ford family still controlled a working majority of voting shares once the automaker’s stock became available to the public in 1956 (Nevins and Hill, 1962).
Ford deserves credit for building up the automaker’s low-priced brand to the point where it ran neck and neck with General Motors’ Chevrolet for much of the 1950s. At the same time, his management team’s poorly conceived and executed expansion efforts in the premium- and luxury-car fields backfired in a spectacular fashion.
The 1958 Edsel was the most visible failure, but the 1956-57 Continental Mark II and 1958-60 Lincoln were also costly flops. Meanwhile, the Mercury actually lost market share in the premium-priced field between 1956 and 1960 despite significant investments (go here and here). The only car that showed any promise was the Thunderbird, but it was a parenthetical effort that departed from Henry II’s script of directly competing against GM model for model.
This raises a question that I haven’t seen answered in any Ford history: What was the total amount of money lost in the 1950s because of Henry II’s blind ambition to catch up with General Motors?
Also see ‘Was the ‘Ford blitz’ to blame for the collapse of independent automakers?’
Arguably the biggest impact of Ford’s successful expansion in the low-priced field was to decimate the ranks of the independents and push Chrysler up against the wall. By 1958 Ford and GM together held almost 77 percent of the domestic market. This undercut innovation among domestic automakers when it was most needed to hold in check the imports. I have ranked Henry Ford II as the U.S. auto industry’s worst leader because his actions cast such a long shadow.
2. James Roche: Taking corporate consolidation too far
One could point to a number of General Motors leaders who made a meaningful contribution to the automaker’s decline. However, Roche deserves mention as a key executive during the crucial years of 1965 to 1971. He was president from 1965-67 and chairman and CEO from 1967-71 (Guilford, 2004).
This was the period when top management imposed on the Chevrolet Division the ill-fated Vega and took other major steps to reduce the autonomy of it automotive divisions.
This represented a major shift from Alfred Sloan’s more decentralized approach to running such a large automaker (Wright, 1979). Although some consolidation was inevitable because of heightened regulations and more expensive technology, Roche and his successors took it too far. That arguably proved to be a big reason why GM failed to adequately respond to a rising tide of imports in the early-70s.
Anything John Z. DeLorean said should be taken with skepticism, but I suspect that he was correct that a proposed subcompact developed by the Chevrolet Division would have been much more competitive than the Vega (Wright, 1979).
Also see ‘1965-68 GM big cars: The end of different strokes’
I also suspect that the infamous labor strife at the Vega’s Lordstown plant might have been less intense if it was still managed by Chevrolet rather than given to the GM Assembly Division (Wright, 1979). And I have no doubt that GM’s 1971 personal coupes would have turned out better if their E-body had not been discontinued due to cost cutting (go here for further discussion).
3. Henry Kaiser: Arrogance can be fatal
Kaiser-Frazer could have plausibly become the Telsa of the postwar era if its driving force, Henry Kaiser, had played his cards better.
His first mistake was starting off with a car that offered little to distinguish itself once the Big Three introduced their postwar designs. With the arguable exception of Packard, none of the other independents made that mistake. For example, Studebaker offered a more compact size, Nash had lightweight unit-body construction, and Hudson used a “step-down” chassis.
I grant you that Kaiser had explored unconventional ideas such as front-wheel drive, but what mattered was what reached the market.
Kaiser also assured his auto company’s doom by operating at a scale consistently too big for a fledging independent to sustain. The Willow Run production facility was vastly larger than what was needed. Kaiser overruled his partner, Joe Frazer, and overproduced in the crucial year of 1949. Already limited resources were further stretched by redesigning the full-sized body too quickly and coming out with a new compact platform rather than a downsized variant of the existing one. In general, Kaiser didn’t follow basic cost controls relevant to an automaker (Langworth, 1979).
Also see ‘The redesigned 1951 Kaiser was not quite anatomically correct’
One might argue that Kaiser suffered from an arrogance similar to Elon Musk. One big difference is that Tesla carved out a distinct product niche from the outset. Musk has survived a variety of beginner’s mistakes partly because he mostly had the electric-car field to himself during Tesla’s formative years. In contrast, Kaiser-Frazer’s first — and most important — entry was in the most competitive field in the postwar auto industry.
The biggest negative impact of Kaiser-Frazer’s demise was that it fueled the common wisdom that startups in the U.S. auto industry had no hope of success. This accentuated the complacency of the few remaining domestic automakers.
4. Paul Hoffman and Harold Vance: Blue sky, sunshine
In the early-postwar years Studebaker displayed far and away the greatest potential of the independent automakers. For a time it had the best-selling passenger car and was the only independent to also field a line of trucks. Studebaker was also the first independent to come out with a V8 engine and automatic transmission. Yet for all of these advantages, the automaker collapsed with remarkable speed in the first half of the 1950s.
The biggest criticism of Studebaker’s leadership team of Paul Hoffman and Harold Vance has tended to be their gingerness in trying to bring manufacturing costs more in line with the rest of the U.S. auto industry.
Aaron Severson (2010) has offered a useful counterpoint that “Studebaker’s productivity levels had as much to do with the antiquated layout of the South Bend factory as with their UAW deal.” Meanwhile, Donald Critchlow (1996) noted that Vance was repeatedly unsuccessful in pressing the board of directors to update its facilities.
To my mind, Hoffman and Vance’s biggest mistakes involved accepting the industry groupthink that aggressive expansion efforts were the key to postwar success. They overextended the automaker by adding too much production capacity, redesigning passenger cars too quickly, not sticking with one basic body, and refusing to sell Studebaker’s V8 and automatic transmission to other automakers. The collective impact of these individual decisions served to make Studebaker exceptionally vulnerable to the end of the postwar seller’s market.
In Hoffman and Vance’s defense, one might point out that their business acumen had saved Studebaker in the late-30s, when the automaker came out with the Champion. This proved to be the first car from an independent since the 1920s that successfully competed in the low-priced field. Unfortunately, Hoffman and Vance did not protect their golden goose. As the 1950s progressed, Studebakers grew bigger, glitzier and more powerful, thereby leaving a void filled by the 1956 Rambler.
All in all, Hoffman and Vance are an example of a leadership team that was initially quite effective but lost its mojo.
5. James Nance: Too big for his own britches
One of the more fascinating aspects of the U.S. automotive history field is the degree to which authors itemize all of the travails experienced by Packard under Nance’s tenure . . . but then all too often turn around and give him a get-of-jail-free card. This rhetorical gambit achieves peak incongruity with James Ward’s (1995) otherwise excellent Packard history.
Yes, Nance helped to reinvigorate the automaker in important ways. He was also confronted with an unusually fast-moving series of crises. Even so, when given a choice, Nance tended to take the riskiest path forward.
Part of the problem was that he refused to accept that you cannot run an independent automaker like one of the Big Three. For example, even Nance critic Patrick Foster (2021) lauded his vain attempt to move the Packard brand back into the luxury car field and spin off the Clipper as a premium-priced junior brand. Left unexplained is how an automaker that small could afford to sustain both brands — at least without resorting to counterproductive badge engineering (go here for further discussion).
In addition, Nance was apparently too ego-driven to accept that he did not have the cards to insist on the top job in a grand merger including Nash-Kelvinator. Nance’s career in the auto industry – and Packard’s survival as a brand – might have lasted longer if he had accepted a third-tier position under George Mason and George Romney (Ward, 1995).
Also see ‘James Nance bio, Spellbinder, shows promise and pitfalls of self publishing’
Instead, Nance engineered a shotgun marriage with Studebaker that displayed a reckless lack of due diligence. An independent audit of Studebaker’s dire finances might have torpedoed the merger, but it also could have led in a less rapid-fire end to Packard.
Could any of these leaders have been stopped?
In discussing “wrong” CEOs, Buffett noted that a company’s board of directors is responsible for intervening when things start going south.
“(I)f a dissident comes in, it’s one thing,” Buffett stated. However, years can go by because directors will “just sit there” and collect “$300,000, $400,000 a year.” Nor does it help when the chief executive keeps proposing increased director compensation and “he’s a nice person doing his best” (La Roche, 2021).
My top-five choices hint at additional difficulties in reining in a corporate leader. It’s presumably much harder — if not downright impossible — to say “no” to a Kaiser or a Ford when their name is on the building.
In addition, smaller automakers tended to give their CEOs a great deal of latitude, particularly if the board of directors had a hard time recruiting them. That was the case with Nance.
Out of all the leaders I have listed, Roche would appear to have had the greatest potential for pushback. He worked for a large, publicly held corporation with high visibility during a time of intensifying external scrutiny. Thus, the success of his corporate consolidation efforts suggests that both GM’s board and upper management suffered from a high level of insularity.
This is my list. What follows is a first round of reader comments. How how do they line up with your current thoughts?
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Critchlow, Donald T.; 1996. Studebaker: The Life and Death of an American Corporation. Indiana University Press, Indianapolis, IN.
- Foster, Patrick; 2021. “The Executive might have helped save Packard. There’s a good reason why it didn’t.” Hemmings Classic Car. Published in January issue.
- Guilford, Dave; 2004. “OBITUARY: James Roche, who led GM in 1960s, dies at 97.” Automotive News (subscription required). Posted June 14.
- Johnson, Richard A.; 2005. Six Men Who Built the Modern Auto Industry. Motorbooks, St. Paul, MN.
- La Roche, Julia; 2021. “Buffett: The ‘biggest danger’ a company faces is picking the wrong CEO.” Yahoo! Finance. Posted May 3.
- Langworth, Richard M.; 1975. Kaiser-Frazer: The Last Onslaught on Detroit. Princeton Publishing, Princeton, NJ.
- Nevins, Allan and Frank Ernest Hill; 1962. Ford: Decline and Rebirth 1933-1962. Charles Scribner’s Sons, New York, NY.
- Severson, Aaron; 2010. Comment in “The Once and Future Coupe: The Studebaker Hawk.” Ate Up With Motor. Posted April 21.
- Ward, James A.; 1995. The Fall of the Packard Motor Car Company. Stanford University Press, Stanford, CA.
- Wright, J. Patrick; 1979. On A Clear Day You Can See General Motors. Wright Enterprises, Grosse Pointe, MI.
While I am no fan of James Roche, the real culprit was his predecessor, Frederick Donner, whom pushed G.M.A.D. and despised G.M.’s “independent” division general managers. Roche came from the Cadillac division, which was as independent as most of G.M.’s divisions. While G.M. had to reorganize to compete in the 1970s, Donner was an autocrat whom bullied and intimidated to get his way over “the car guys”. Roche inherited what Donner had begun even though G.M. was leaving a wildly successful period where costs were beginning to spiral out-of-countrol and government regulation was soon to be in important driver in the production of automobiles.
Those are reasonable points. I mainly picked Roche because of the Vega, which strikes me as a key step in GM’s decline.
I’m not too clear what you expected Nance to do. Cadillac and Lincoln could lean on GM and Ford’s armies of engineers, and access to various parts and stampings from their respective premier divisions. The Packard marque could not survive on its own, and needed a premium companion make to achieve profitable production numbers. Unfortunately, GM and Chrysler had two premium brands each, and Lincoln sort of flirted as a premium brand. Nash, Hudson, and even Studebaker all competed in premium class (or tried to).
Studebaker redesigning passenger cars too quickly? The first postwar design went for five years, the second with facelifts and some heroic sheetmetal reworking from 1953 to the end. Meanwhile, the big 3 did a redesign every three years or so.
When I was a kid in the 50s and 60s, there was an expression for defunct auto marques: Orphan. In the 30s between independents closing, and others ditching companion marques, I would say over a dozen cars went defunct in the 30s. By 1950, independents did not have the benefit of the doubt any more.
Kim, I’ve written a number of pieces that have addressed specific elements of what Nance could have done (e.g., go here, here and here). That said, an article focused on answering your question in an overarching way would be helpful. I’ll see what I can do.
To me, the question is-of all the independents, is not whhy did Packard, Studebaker, Hudson, Kaiser, Willys fail, but why did Nash/AMC succeed when all the others did not?
While Henry Ford II made mistakes, I can’t place him in the number-one spot. I certainly can’t blame him for the failure of his competitors to respond to the revival of Ford Division in the low-price field.
Chrysler Corporation management was clearly asleep at the switch during the postwar years, particularly in regards to Plymouth. The division had come close to ousting Ford from the number-two spot in 1940, but corporation management seemed oblivious as both Ford and Chevrolet pulled far ahead with the debut of the first postwar models. Plymouth’s styling was dull, and the delay in offering a fully automatic transmission was inexcusable, particularly for a corporation that had prided itself on its engineering prowess. Even the independents beat Chrysler in offering a fully automatic transmission!
Chrysler management forgot that it was engineering innovations that had propelled the corporation into the number-two spot during the 1930s. GM, meanwhile, had shown that sharp looks sold cars. Chrysler’s styling didn’t have to be as flashy as the designs Harley Earl was rolling out for GM, but neither did they have to be as painfully dowdy as the designs sported by the 1949-54 Plymouths. The Plymouth looked like it was designed for unmarried school teachers. That’s all on Chrysler management. If anything, K.T. Keller deserves more scrutiny for his failure to address changes in the market after World War II. Chrysler fell behind Ford in sales, and lost market share during his tenure (and beyond, due to decisions he had made).
The entire Edsel saga is incredible, when one realizes that it was initiated to address a real need – Ford had nothing to effectively compete with Buick, Oldsmobile and Chrysler. Somehow this morphed into an entirely new division that bracketed the existing division (Mercury), while trying to move that existing division upmarket. Meanwhile, any body sharing by those two divisions with Lincoln was negated when it was decided to move the Lincoln to unibody construction. What a mess! He does deserve criticism for letting the entire project get out of control during his watch.
I do give Ford credit for firing Iacocca in 1978. He realized that Ford had become weak in product. The corporation could not address the challenges of increased government regulation, rising imports and more informed customers with a flashy new suit of clothes on the same old car – which had been Iacocca’s forte. Ford also realized that Iacocca was turning the corporation into the Iacocca Motor Company (as he ultimately did at Chrysler when he was there).
If Iacocca had stayed in charge of Ford, we would never have seen the real quality improvements, or the aero-Thunderbird, Cougar, Taurus and Sable. Even though some of his reasons for firing Iacocca were personal, he ultimately made the right call.
Henry Ford II is a mixed bag. He made the best calls at the beginning and end of his tenure. But I wouldn’t put him among the worst.
Thank you for taking the time to offer such an in-depth comment. Your logic chain looks reasonable to me. I’m just using different weights in how I grade auto executives and automaker performance. Those weights are, of course, very much subject to debate.
I would agree that Henry II oversaw a dramatic makeover of the Ford Motor Company from the late-40s to the mid-50s. That was an enormous undertaking — and the results were nothing short of spectacular in terms of growth. Ford’s market share doubled between 1948 and 1956. That was largely driven by the Ford brand.
My sense is that Henry II also did a fairly good job in the 1960s. The challenge is that he likely would not have made it to that point if he had been running an automaker that wasn’t family controlled. Ford lost too much money in the second half of the 1950s for mostly avoidable reasons. Indeed, a smaller automaker might very well have gone out of business.
I also heavily mark down Henry II because his “Ford blitz” is arguably the biggest reason why the independent automakers got wiped out in the mid-50s. The U.S. auto industry could plausibly have done a better job of responding to foreign automakers in the 1960s and 1970s if it had more robust internal competition. Since the federal government wasn’t going to properly enforce antitrust regulations, it was up to the industry to police itself. GM was no hero in this drama, but Ford initiated a no-holds-barred price war that was at best unethical, and arguably illegal.
You make a good point about the firing of Iacocca. Perhaps it doesn’t really matter whether Henry II did it for the right reasons — it was the right decision. In addition, a chastened Iacocca did bring about some needed reforms at Chrysler (although he unfortunately didn’t kill the Plymouth brand and consolidate the automaker’s dual dealer networks, which could have avoided a whole lot of brand-destroying badge engineering during the 1980s).
Your discussion about Chrysler’s postwar management is a large subject in and of itself; perhaps it is time for a follow up to my piece on the 1953-54 Plymouth that better responds to your points.
So briefly: Keller — and Colbert — certainly made some major mistakes in the early postwar years. However, I’d like to add an additional layer to the fairly common view that Chrysler lost a lot of momentum in the early-1950s. Even if Walter Chrysler had still been alive, in charge and at the peak of his brilliance, the automaker would have had a much harder time keeping up with Ford once Henry II’s new GM-infused management team took over in the late-40s. And despite Ford’s sorry condition at the end of World War II, it was still a bigger enterprise — and thus had more capacity than Chrysler to exploit a postwar economic boom.
In a very real sense, Chrysler got lucky in the 1930s. Yes, the automaker played its cards pretty well, but it was also was able to rise up to become one of the Big Three because industry production levels were lower and Ford was on the decline. Those conditions ceased to exist in the 1950s.
Thank you for the reply! Regarding the Ford Blitz – it was irresponsible, but, in my view, it only hastened the inevitable.
I recall reading that, once all-steel bodies were adopted, a factory needed to produce about 300,000 units annually to be sufficiently profitable. There were few times that an independent auto maker had ever reached that figure prior to AMC hitting it (and surpassing it) in 1959.
The expense of tooling up for a new all-steel body (the 1941 Clipper) was undoubtedly why Packard gave up its body business to Briggs right before the war. This was a decision that lead to disaster when Chrysler Corporation bought out Briggs in the early 1950s.
I’ve read accounts of people who had worked at Packard and Hudson in the early 1950s. They described factories and even administrative headquarters showing obvious signs of neglect – largely because each company was scrimping on maintenance. This was before the Ford Blitz (these accounts were from the 1949-51 timeframe). Packard and Hudson were the weakest of the independents, and were showing signs of financial stress before the Ford Blitz. And this was during a very healthy auto market.
George Mason of Nash was smart enough to realize that a merger was needed among the independents to achieve necessary economies of scale, but even then, the Nash-Hudson worked because the new company essentially killed Hudson in everything but name only. The Hudson production facilities were closed, the Stepdown and the Jet were killed, and a restyled full-size Nash become the new Hudson. Production was based at the Nash facilities. The company still flirted with bankruptcy until the restyled Ramblers began gaining sales strength in mid-1957, and the Nash and Hudson brands were killed off for 1958.
After World War II, I’m not sure that the independents were really strong enough to offer much in the way of competition to GM and Ford, given that even Chrysler was struggling to keep up with the Big Two by the late 1950s.
Geeber, I think that there are two levels to this conversation: The empirical and the normative. On the empirical level we can bring to the table facts and logic chains. However, there is a deeper level that I don’t think gets enough explicit attention: Do we as a society find it acceptable when an industry becomes an oligopoly (that is, dominated by a few huge firms that squeeze out the smaller players)? One’s normative commitments can color how one selects and interprets the “facts of the case” when it comes to the postwar U.S. auto industry.
Let’s talk empirically for a moment: Over the years I’ve seen a variety of studies or experts debate what would be a sustainable production level for an independent automaker. Your figure of 300,000 units has utility, but I’ve seen lower numbers. By the same token, 300,000 could even be too low if the automaker spread itself too thin with multiple platforms, brands and whatnot. AMC’s breakeven point under Romney in the early-60s was apparently quite a bit lower than under Chapin in the mid-70s.
The normative side is inevitably political. I happen to think that using antitrust laws to help level the playing field in the auto industry would have been a good thing for both consumers and the industry itself.
In the absence of antitrust action even to stop the Ford blitz, my sense is that Packard and Hudson were too small to survive on their own unless they came up with clever niches like Kaiser-Willys ultimately did that did not require frequent and expensive product redesigns. Both Mason and Nance went in the opposite direction by advocating a mega merger that could have created a kind of miniature Chrysler Corporation. Unless that was done quickly after the end of WWII, I question whether it would have worked. As you say, even Chrysler struggled to keep up with the Big Two.
I keep coming back to Romney because he recognized better than pretty much anyone else that competing model for model against the Big Three was folly. He thought that focusing on niches and maximizing one’s economies of scale were the keys to success. Unfortunately, his basic approach was dropped once he left AMC, so we don’t have a good U.S. example of whether this strategy was still viable in the 1970s and beyond.
The American auto industry isn’t the only one that has come to be dominated by a few, very large firms. European countries that did not take a laissez-faire approach to their domestic auto industry still wound up with a few firms dominating production. This suggests that, ultimately, the shape of the industry – including the number of players – will be dominated by the need for economies of scale that only large size can bring.
Back to the U.S. – even if there had never been a Ford Blitz in 1953-54, any remaining independent would still have faced several hurdles in the coming decades.
In the 1960s, the Big Three were expanding their line-ups, leaving fewer niches for independents.
In the 1970s, government regulations, culminating in CAFE, required a complete redesign of the basic car, from road to roof. That huge expense was followed by the need to completely revamp their production facilities, thanks to competitive pressures brought about by the Japanese in the 1980s.
That was a daunting task even for GM and Ford (and GM, in particular, ended up bungling it badly). I really don’t see how any company smaller than one of the Big Three could have survived on its own into the late 1970s (note that AMC needed Renault’s money to stay afloat by 1979).
The imports that were the real threat to the domestics were the modern, front-wheel-drive economy cars and upscale sports sedans. Any remaining independent would not have had the resources necessary to meet the import competition head-on by designing something along the lines of the BWM 2002 or Honda Civic. Such a design would have required all-new everything – chassis, drivetrain, body and even the facilities to produce it (to achieve the necessary quality levels). That was a daunting total expense even for GM.
I agree that scale matters — but that it matters a whole lot less than the “get big or get out” crowd have long insisted. For example, the cost of regulatory compliance beginning in the 1960s did make life harder for all automakers, but corporate size did not always prove to be an advantage.
Look at emissions compliance. Honda and Mercedes were arguably much more on the ball in the mid-70s than the Big Three. A key reason why is that Detroit was acting like a classic oligopoly — it resisted change to the bitter end. And then it responded in a half-assed fashion. This is why oligopolies are bad.
Or consider the advent of front wheel drive. Yes, Detroit spent a fortune switching over its passenger-car lineup, but lack of scale had not stopped smaller automakers such as Citroen, Saab and Subaru from pioneering the technology. The same can be said for a host of other innovations, such as crash-absorbing bodies (Volvo, Rover and Saab), all-wheel-drive sport utility vehicles (Jeep and Subaru) and electric vehicles (Tesla).
In a post on economies of scale (go here) I quote an MIT study from the 1980s that found that technological advances had significantly reduced the minimum efficient manufacturing scale to the point where “medium-line and specialist firms need not suffer production-cost penalties if they work out purchase or co-production arrangements for components still requiring high volume.”
In my piece on the 1954 Ford blitz, I agree with you that if the blitz had not occurred, the remaining independents would have still faced major hurdles. That said, even a modest amount of additional domestic competition could have helped the Big Three respond more quickly and effectively to the rise of the imports, e.g., by continuing to focus on the compact car market in second half of the 1960s. I get into that here, here and here.
Of course, heightened competition would not have been guaranteed if antitrust laws had been better enforced in the early-50s. Richard Langworth is right that the independents suffered from bad management decisions. But at least the playing field would have been more level for those automakers that had fairly competent management, such as Nash under George Mason (and later George Romney).
Provocative reading, Steve, and definitely worthy of a follow up. As you suggest, the losses as a result of the failure of not only Edsel, but Mercury, Lincoln and the Continental Division at the end of the 1950s must have been catastrophic. So what saved Ford? The Falcon, the ’61 T-Bird/Continental, the Fordized Mercury? Truck sales? I’d be interested to see how Ford shareholders made out during this time period. As for HF II’s #1 spot on your list, I’d say just for letting his father’s name be used on THAT car is more than enough to put him there.
After reading all of the very thoughtful comments, I still think that the inclusion of James Roche is unfair. Fred Donner pushed the end of the decentralized divisions at G.M., which Roche inherited. The man for which the Vega has to be blamed is Ed Cole. While his Corvair of 1959 was outside-the-box (actually outside-Detroit) thinking, I do not think Cole thought things through in the same ways G.M. engineered the O.H.V. V-8s, with the ability to add cubic-inches between 1948 and 1966, until the second-generation G.M. big-displacement V-8s were unleashed in 1965 and 1966. The Corvair flat-six was limited to the factory 164-cu.in. Roche’s biggest mistake was allowing Cole to push an unproven four-banger and an unproven rotary engine into the Vaguely.
I do not know if Knudsen would have done better in place of Cole as Knudsen loved big cars. DeLorean might have led G.M. into a smaller set of cars, but the largest G.M. cars in modern history were the 1971-1976 full-size land-yachts on which J.Z.D. signed-off.
Easily Henry J. Kaiser was the worst automotive C.E.O. because he would not listen to anybody, much less his more automotive-savvy partner, Joe Frazer.
The Studebaker conundrum is a challenge to me. There is a public television documentary that reveals no new facts about the downfall of Studebaker that is covered in a number of great book narratives; however, follows the families of South Bend-area long-time Studebaker employees whose jobs disappeared early in 1964. These were multi-generational employees who saw the golden goose of the 1940s erode into a dying organization in a period of 12-years. I read that the break-even point for steel-body car manufacturers was around 300-thousand cars annually. I believe Studebaker’s execs (Hoffman-Vance) seduced Packard that they could be profitable on 285-thousand cars annually and James J. Nance bought the lie. In the world of business as in the world of geo-politics: “Trust but verify !” Perhaps Nance, Hoffman and Vance were simply fools.
I am very conflicted over Hank the Deuce. H.F.II inherited a mess in 1943, but hired John Bugas to help rid FoMoCo of Harry Bennett’s goon squad. Ford’s hiring of Ernest Breech and “The Whiz Kids”, I think was a stroke of genius, because finally Ford could ramp up fiscal and manufacturing controls that the elder Ford had fought off successfully until Bennett was sent packing. Maybe H.F.II had too much G.M.-envy. and let the Breech-Jack Reith five-division plan go through. The 1949 Ford-Mercury-Lincoln cars made their impact, aided by the very conservative 1949 Chryslers products. Ford followed through with improved cars in 1952. I think H.F.II was mostly focused on organizing Ford as a public company, not the Reith plan in 1956. In retrospect, Robert McNamara’s 1957 Ford Fairlane was the big breakthrough for Ford. 1958 was a letdown corporately, but 1959 had a revitalized Ford and a reasonable Mercury. McNamara ended the Edsel and took the added production capacity to produce the Falcon platform cars. “Whiz Kids” Ben Mills and Arjay Miller helped H.F.II lead Ford even as Iacocca took over the Ford division. Maybe hiring Knudsen was symptomatic of Ford’s G.M.-envy. I think H.F.II really did not want Iacocca to be second in command as early in 1968. By 1977, Ford had enough grounds to fire Iacocca and not cause a problem with the board of directors, plus he had time to select Iacocca’s successors, Phillip Caldwell and Donald Petersen. Public companies require finesse when changing officers.
I wonder why Roger B. Smith of G.M. is not ranked # 1. His mismanagement of G.M.’s core business, especially in terms of the failures to fully develop G.M.’s cars before model introduction, led to G.M.’s near-bankrupty in 1992 ?
Yes, when I read the headline for this article I though Roger Smith would be leading the pack. He oversaw the final destruction of the independence of GM’s Divisions, the very competitiveness of which was the life source of GM’s superiority. Sure, some commonality was needed but the spirit of the Divisions shouldn’t have been crushed.
As you can see from the headline, the article focused on the postwar period. I’d define that as from 1945 to around 1979 (and will add that clarification to the text).
The next distinct era might plausibly be 1980 to 2009, when GM went bankrupt. I’d agree that Smith would be a top contender for the worst automotive leader in that era.
I haven’t thought much about who would top the charts for the most recent era, 2010-2023.
Overall, I found this article quite insightful. During the 1950’s it was clear that leadership amongst the ranks of the independents was abysmal. This weakness amongst the independents became a fatal flaw once GM and Ford went toe to toe in competitive battle. It’s a shame the Studebaker leadership team that saved the company during the depression couldn’t perform their second act. The late Bob Townsend, former Avis CEO, perhaps had the best advice; after a 5 or 6 year run the CEO should fire themselves and bring in new talent to reinvigorate the business. Of course that’s what Nance was (new blood) to Packard but he was likely out of his league, exhibiting wreckless arrogance and a propensity for rookie mistakes.
Were the independents able to attract first class talent? Take George Romney. Before joining Nash, Romney was an executive with an automotive trade association. He became CEO right after Nash absorbed Hudson to create AMC. Romney pushed Rambler as a gas guzzling dinosaur fighter, and gave the Rambler for Hudson dealers to sell also. AMC nearly went bankrupt but IMO was saved by the big three bloating their product lines. He did an advertising blitz around this time also traveling 70k miles in one year speaking at conventions, radio and TV shows, church suppers, anywhere someone would listen about the right-sized AMC line. He made the right decisions at the right times and was fortunate.
Romney was the exception at the whole automobile industry. Not surprisingly, he began a political dynasty afterwards
Have you ever heard of a Ford or Durant near US president (Mit Romney)?
On the other hand, Walter Chrysler was also an almost or an early Chrysler Iacocca plus Romney and maybe even Sloan, when he purchased the future Chrysler motors (Maxwell motor company)?
I wonder if Henry Ford II’s indulgent and undisciplined personal life, especially after he turned 40, affected his leadership of the company during the 60’s and 70’s. Seems like he went through a second childhood during those years.
Focusing on the US independents, which overlooked disempowered individuals who were situated under the worst or mediocre leaders within the industry could have been able to steer their respectively automakers in a better direction?
However one defines better direction of course.
That’s a difficult one, unless you can name any second tier execs at the indies that went on to star at other businesses?
Good Grief! With Studebaker, then Studebaker-Packard allegedly guided by 2 of the 5 worst post-war “leaders” in the industry, it’s no wonder the enterprise failed to the point where they made decisions (’56 and ’63) to drop and cancel their automotive divisions! Studebaker at the bottom of the basket again! The founding brothers (and Fred Fish) must be “spinning in their graves”! But, man, what a fascinating corporate history!
l agree with Robert Starinsky’s comment about Hoffman and Vance. lt seems like they lost their “mojo” around 1950 (after 25 years in management positions) and then Nance was no Romney personality.
Hindsight shows that Nash/AMC arguably had the best two gents for independent management. Romney “pulled a rabbit out of the hat” against the odds and without his strong leadership, it may be that Rambler would not have survived the ’50s.
Two “what if”s to think about could be: What if Romney had gone to Packard? And: What if Studebaker had bought Willys-Overland (l think the product line could have been a winner)? But, sorry, l digress.
Stewdi, the idea of Studebaker buying Willys instead of Kaiser is interesting. Jeeps could have bolstered Studebaker’s truck lineup, and a V8 could have been helpful to the bigger Willys. My first thought was that an acquisition would have been best before Willys came out with the Aero, but it could have become a modular platform of sorts for both Willys and Studebaker passenger cars. One thing I haven’t seen discussed is how Willys dealt with the Aero being unit-body construction when its assembly plant was otherwise configured to manufacture body-on-frame vehicles.
I sort of picture the Packard board room full of Lionel Barrymore and Sydney Greenstreet types drinking Bourbon and smoking cigars. Romney would not fit in. Romney neither drank nor smoked. It’s amazing he got as far as he did in the culture of the day.
Yup, Romney didn’t fit in all that well. It also didn’t help that he was a man of strong convictions who would go to battle in ways that most other auto executives would avoid, e.g., calling for the breaking up of GM and Ford.
As for HFIi, I would not call the Continental Mark II as a faulty decision. It, like the Eldo Brougham, had a different mission of being a halo car.
Where I do fault HF is how he perpetuated the politics of butt kissing a Ford family person was most important to a successful career.
Beyond the newly defined time period, Jac Nasser needs to be a candidate. He nearly bankrupted Ford with his acquisitions.
A note on Roger Smith.he made Chuck Jordan VP Design. A major vote for wanting Design to return to strong leadership again.
Chrysler’s leadership pre-Iacocca struggled. Excepting the Cordoba they just did not have a handle when 440s and hemis no longer were their philosophical core. I remember being told during this period that they pulled the plug on the big truck division because of impending new regulations that never came to pass.
The Continental Mark II was a fundamentally more ambitious project than the Eldo Brougham — it had its own body, factory, brand and division. That was insane for such a low-volume car, particularly when its model range was so narrow. Offering a four-door initially could have at least picked off some of the limousine market.
That was bad enough in isolation, but this reckless level of overreach was happening throughout the company, e.g., the Edsel, 1958 Lincoln and Mercury expansion. The kind of financial controls typical at GM or even Chrysler were thrown out the window.
You are correct in the end because what the Mark II was able to show was squandered with the rest of the Lincolns until the new 1961s.
The Mark suffered from the typical Ford sharp elbow politics. It was designed by someone viewed as an outsider with Delarossa in an interview being told to avoid the project at all costs
Yet, if the objective of the Mark was to show what Lincoln was capable of and that it was every bit an equal, if not even more desirable, to a Cadillac in keeping with the classic Lincolns then it wasn’t a failure.
How was the Mark II more “desirable” if it sold so poorly? The grand irony is that if Ford had acted similarly to GM and based the Mark II more directly off the 1956 Lincoln, it could have developed just as much cachet but sold better and lost a whole lot less money.
If it weren’t for the “fine coreenthian lather” the Cordoba would have been an also ran.
Thank you!
I agree.
It pains me to see the millions wasted by Ford during the 1950s. It is so sad that he didn’t tell whomever idea it was to build a 5-tier auto corporation, that they were a fool. There are so many mistakes made by Ford during this time, it looks as though an insecure leader was taken for a ride by rooms full of shysters. Ford was young and he was handed a tremendous responsibility to save his family business – which he did. However, what it takes to save a company is not what it takes to keep a business afloat. Those Whiz Kids saved Ford, but after their tasks were done, they should have been shown the door.
McNamara was the only one of the group that understood how important it was to build an efficient manufacturing system and product. Ford’s biggest success was thanks to him – the 1958 Thunderbird and 1960 Falcon. McNamara’s efficiency demands frustrated the Chrome Crowd that competed against him. Ford’s management was out of control, but the King was in over his head and just couldn’t lead that group of Prima Donnas.
So yes, Henry Ford II was the worst. He was too young and inexperienced for the job. The guys that bailed him out in 1949, were the same guys that crapped in the Ford water hole by 1959. If he was more mature and experienced, he would have fired the whole lot of them by 1955 when their silly pipe dream of matching GM was shoved upon him. He got played. That makes him the worst.
Not sure that a bunch of the concept of matching up to GM wasn’t from HFII and the family. Was it an inferiority complex that Ford had been bigger and more important early on but had been left behind by GM?
Can one also trace Ford’s issues up to today that when they took the company public they made 2 classes of stock to ensure the family always maintained voting superiority? This resulted in having Ford family members installed in management position with outsized political clout.
McNamara’s first success was the 1957 Ford with its “cow-belly” chassis, two wheelbases and the fabulous Fairlanes.
Two “Whiz Kids” also helped Ford after 1958: Ben Mills righted Lincoln-Mercury and Arjay Miller ran Ford’s financial controls until his retirement. VanillaDude, McNamara did not approve of the five-division plan in 1952 and opposed the E-car (Edsel) in 1955 when the production plans were approved. In 1952 and in 1955, Ernie Breech (from G.M.) was Ford’s President, and H.F.II was pre-occupied in 1955-1956 with taking Ford public. The only positive outcome that came out of the Jack Reith five-division corporate plan was that Ford’s production capacity allowed for the production of 435,676 1960 Falcons and 116,331 Comets !