Chapter 5
Logically one might suppose that, upon the adoption of the concept of management and the concept of the car business, the new administration should have proceeded forthwith to translate them into realities. Such, however, was not the case. Indeed, for the next two and a half years—that is, for most of the first definable period of the new administration—we departed from and even violated those first principles. In other words, the logic of the mind and the "logic" of history were not of the same order. This chapter is a painful one in the General Motors story, but I see no way to avoid it if I am to account for General Motors' progress. For, as often happens, the lessons of such experience are the best learned lessons. The years 1921 and 1922 fortunately offered time to spare for a schooling that was to have a considerable part in shaping the future of the corporation.
The problem was one of conflict between the research organization and the producing divisions, and of a parallel conflict between the top management of the corporation and the divisional management. The subject of the conflict was a revolutionary car with an air-cooled engine of Mr. Kettering's design, which Pierre S. du Pont proposed as a replacement for the corporation's conventional cars with water-cooled engines.
The story begins in 1918 when Mr. Kettering began experimenting with an air-cooled engine in one of his workshops in Dayton. An air-cooled automotive engine was not unknown. Earlier ones were then in use in the United States in the Franklin car and others. The principle of air-cooling as we knew it was to draw off the heat of the engine through its walls by attaching fins to the walls and blowing air over them with a fan. The Franklin tried to do this with cast-iron fins. Mr. Kettering proposed to use copper fins, the conductivity of copper being ten times that of cast iron, and to braze or weld the fins to the engine walls. This involved new technology both in engines and in metallurgy. Mr. Kettering found a number of difficult design problems in the area of expansion and contraction of the two metals, but he had in mind and under test, solutions to the problems of design; problems of production were still another matter and of course belonged to a later stage of development.
The air-cooled engine offered an attractive prospect. It would get rid of the cumbersome radiator and plumbing system of the water-cooled engine and promised to reduce the number of parts in the engine, its weight, and its cost, and at the same time to improve engine performance. If it fulfilled all these promises it would indeed revolutionize the industry. But it is a long way from principle to reality in engine design; one has only to observe the years and engineering man-hours taken to develop practical jet and rocket motors, or to note that the water-cooled internal-combustion engine had come to its 1921 level of efficiency after constant development by an entire industry since the late nineteenth century. Nevertheless, though he had been at it only a short time, Mr. Kettering's convictions regarding his new air-cooled engine were optimistic; and he had then a very considerable reputation in the automotive field because of his pioneering work on the self-starter and ignition and fighting systems, and in the aviation field where he was so far ahead as to have experimented with a pilotless plane.
Mr. Kettering came before the Finance Committee on August 7, 1919, to explain the work he was doing on the air-cooled engine and on fuel research—to result later in tetraethyl lead for gasoline (ethyl gas)—at the Dayton Metal Products Company and the Dayton Wright Airplane Company. I had some part in the preliminaries of this meeting. I had known Mr. Kettering since 1916, when his Dayton Engineering Laboratories Company came into United Motors, and had kept in touch with his work. On the day before the meeting of the Finance Committee, Mr. Kettering had met with Harold E. Talbott, president of Dayton Metal Products Company, Mr. Haskell, Mr. Raskob, and myself to work out arrangements for General Motors to purchase the assets of the Dayton companies-Domestic Engineering Company, Dayton Metal Products Company, and Dayton Wright Airplane Company. The thing was wrapped up at the committee's meeting of August 26, 1919. There Mr. Durant and Mr. du Pont reported on the Dayton situation, saying, "that Mr. Charles F. Kettering ... is the center of this situation; that the obtaining of Mr. Kettering's entire time and attention is of prime importance, it being desired to place him in charge of the new Detroit laboratory . . . and that in the opinion of Mr. Durant, Mr. Haskell, Mr. Sloan, Mr. Chrysler and others Mr. Kettering is by far the most valuable man known to this Corporation for the position . . ." The Finance Committee minutes then say:
The Committee was advised by the President [Mr. Durant] regarding the air-cooled engine which is being developed by the Dayton Metal Products Company and the possible future thereof, it appearing that this invention has as yet not progressed to the point where its success is absolutely assured but that its chances of proving successful are favorable and that in this event our investment will provide a splendid financial return.
So it was that we got Mr. Kettering's services, the Dayton properties, and the air-cooled engine; and a good deal of General Motors' history was set in motion.
More than a year went by and much water went under the bridge, as I have related. On December 2, 1920, shortly after Mr. du Pont became president of General Motors, Mr. Kettering reported to him: "The small air-cooled engine of the Ford type is now ready to push toward a production basis." Mr. Kettering suggested that a few cars be made and tested, and that if they were satisfactory a number of cars, 1500 or 2000, might be made ready for the market in 1921.
A few days later, on December 7, 1920, a party of us made a trip to Dayton to look things over there. Pierre S. du Pont, John J. Raskob, J. A. Haskell, K. W. Zimmerschied, who was general manager of Chevrolet, C. D. Hartman, Jr., secretary of the Finance Committee, and myself, went down together. On the train to and from Dayton we discussed a number of things, among them the air-cooled engine. A record of the discussion says:
After careful consideration it was the consensus of opinion that the new car being developed at Dayton should be tested in adequate numbers and under the most rigorous conditions before undertaking to exploit the type in any degree. When satisfied as to the merits of the product, it will be adapted for the Chevrolet line, and will replace the present 490 model.
The "490" was then the standard lower-priced Chevrolet in our line, potentially though not then actually competitive with Ford. The question of a new engine for it was a big thing, conceivably a decisive one for General Motors in the high-volume market.
It is not surprising, therefore, that on January 19, 1921, at one of its earliest meetings, the new Executive Committee agreed upon making a comparative study of the air-cooled engine and the existing water-cooled Chevrolet "490." It was the consensus of the committee that no material changes in the "490" were possible for the next model year, beginning in the autumn of 1921, "and that it would be well to await future developments in the air-cooled engine before deciding upon the changes to be made for the production year beginning August 1922." Thus we decided to "await" the air-cooled car and in the interim to do nothing to develop the old, water-cooled "490" model. I say "we decided," for the Executive Committee always made decisions as a body.
Two weeks later we moved to a firmer position, resolving "that it is our intention that the air-cooled engine be developed first for a low-priced car and that it be made in the Chevrolet Division, and that Messrs. Kettering and Zimmerschied be informed of this opinion." This was virtually an order, and so far as Chevrolet was concerned the die was cast.
In another two weeks the Executive Committee expanded its position with a proposal to take a second car, the Oakland, into the air-cooled program with a new six-cylinder engine. The Executive Committee, however, noted "great uncertainty" within itself on the question and ordered a report on it from the Advisory Staff, of which I was then the head. If I am not mistaken in memory, the "great uncertainty" among the four of us on the committee was mainly in my mind. This will become clear later. But the committee was led with a firm hand by the president, Mr. du Pont. He pressed for the air-cooled program, upon the advancement of which he had by this time set his mind.
Another week later, on February 23, 1921, at a meeting from which I was absent, the Executive Committee moved on quickly to new decisions : "It was assumed," the minutes say, "that the 4 cylinder air cooled car now under study and development would occupy the lowest price field; that second to this would be a 6 cylinder air cooled car, selling in the neighborhood of $900. to $1000." Mr. Kettering was ordered to "proceed with the design and construction of the 6 cylinder air cooled car." But, the committee said, "no quantity production should be attempted until success had been established, by a thorough test of a few [trial] cars." Mr. Kettering, who was present along with Mr. Mott and Mr. Bassett, said he expected to know the merits of both cars by July 1, 1921, and that preparations for the manufacture of the air-cooled "4" could be started on August 1 with a view to bringing out the car about January 1, 1922. Mr. Zimmerschied of Chevrolet was called in and told about the program for his division. He demurred, saying he desired to prepare for production of the air-cooled "4" in August 1922. He said he had improved the water-cooled "490" and had designed a new body for it. The Executive Committee and the Chevrolet Division were thus revealed as moving in different directions.
Mr. Kettering had test cars of both types in operation in Dayton in May 1921 and reported that either the "4" or "6" could be first to come out. On June 7 the Executive Committee agreed that a small manufacturing section—a kind of pilot operation—should be created at the General Motors Research Corporation (later called our Research Laboratories) in Dayton, with a maximum production of not more than twenty-five cars a day.
About this time Mr. Zimmerschied's reservations regarding the air-cooled Chevrolet crystallized, and the divisional problem, so to speak, thereby came to the foreground, where it was to remain for some time. Circumstance had dictated that Buick, which was doing well, should be left for the time being more or less in its former, wholly decentralized state, and with its own program. But notwithstanding our concept of organization and directly contrary to it, expediency was permitted to centralize the affairs of other divisions. This trend was made emphatic by the decision of the top officers to impose a radical car design upon two divisions, Chevrolet and Oakland. The Executive Committee thus made both the policy and the program for these divisions on the most significant question that can come before a division, namely its engine and car design. The Executive Committee had that privilege, and in the circumstances it elected to exercise it. The difficulty lay not only in the question of whether the decision regarding the new car was sound, but in how to get it carried out where it had to be carried out, namely, in the divisions. In extenuation of what was done, I should say that this was the first time, to my knowledge, in the history of General Motors that intimate co-operation was called for between the Research Corporation and the divisions on an important problem, and no established means existed by which this co-operation was to function. Since the initial production as well as the creation of the design was assigned to Mr. Kettering's research group in Dayton and the actual mass production was assigned to the divisions, the responsibilities were blurred. Mr. Zimmerschied wanted to know who was adviser to whom on production: Research to the car division or the car division to Research? Even if there had been no question as to the merits of the new design, this would have represented a problem in management. As it was, there was skepticism at Chevrolet about the new engineering design, and anxiety at the Dayton laboratories that the car divisions would change the design. Divisional engineers and the general managers traveled back and forth between their home bases and Dayton, and in the course of these visits Mr. Kettering observed that George H. Hannum, general manager of Oakland, was more sympathetic to the new car. Mr. Kettering also thought that he could have the air-cooled "6" ready for Oakland by the end of the year.
I was in Paris during the first part of July 1921, and on my return all four of us on the Executive Committee again traveled together to Dayton, arriving there on July 26. We met informally with Mr. Kettering and Mr. Mott, who was then group executive for the car divisions. Mr. Kettering's enthusiasm for the new car was stronger than ever: ". . . it is," he said, "the greatest thing that has ever been produced in the automobile world." Mr. du Pont left no doubt of his faith in this judgment. Mr. Kettering again noted the differences between the attitudes at Chevrolet and Oakland. Naturally he was anxious to work more closely with the division that expressed the greater sympathy, namely, Oakland. A transcript of the meeting in Dayton says: "It was finally recommended that the 6 cyl. car be pushed ahead and that the 4 cyl. car be held up for the time being as it was felt that they could profit by their experience on the '6' when producing the '4' . . ." Mr. Zimmerschied of Chevrolet, it was believed, could be sold on the air-cooled "4" engine after the validity of the "6" was established. Chevrolet anyway, Mr. Mott said, had an inventory of about 150,000 "490's" which still needed to be liquidated.
This temporizing attitude toward Chevrolet was not permitted to last long. A few weeks later Mr. du Pont presented to the Executive Committee a general review of the product situation in General Motors with proposals for a definitive corporation program. He reaffirmed the decisions regarding the air-cooled "6" for Oakland. When he came to Chevrolet, he wrote: "It [the 490'] is not to be continued in production beyond the time necessary to reduce inventories and commitments. Immediate decision upon a new car for permanent manufacture is necessary." The air-cooled "4," he said, was to be "the adopted standard for the Chevrolet Division unless a definite change of policy should be made," and it should be ready for production before May 1, 1922. The Executive Committee as a body concurred.
The development work on the new engine continued at Dayton through the fall of 1921, and at the same time studies were made concerning new plants, conversion of plants, and marketing programs for the air-cooled cars. As the time for the delivery of the first test car from Dayton to the Oakland Division grew near, there was a growing atmosphere of expectancy in the New York and Detroit offices. Mr. du Pont wrote to Mr. Kettering, "Now that we are at the point of planning production of the new cars I am beginning to feel like a small boy when the long expected circus posters begin to appear on the fences, and to wonder how each part of the circus is to appear and what act I will like best."
Specific dates for the Oakland schedule were officially set by the Executive Committee on October 20, 1921, as follows:
Production of the existing water-cooled car to be stopped on December 1, 1921.
New air-cooled cars, made in Dayton, to be introduced at the New York Automobile Show in January 1922.
Production of the new car to begin at the Oakland Division in Pontiac, Michigan, in February at one hundred a day and to increase thereafter.
No further questions on program remained, it seemed.
The first air-cooled car then was sent from Dayton to the Oakland Division for test. This was the first evaluation of the validity of the air-cooled car outside of the test cars operated by Mr. Kettering in Dayton. There was a pause, and then shock. Word came that the car had failed its tests at the Oakland Division.
On November 8, 1921, Mr. Hannum wrote to Mr. du Pont:
With the changes that are necessary to make this a real job, it is going to be impossible to get into production in the time specified, in fact, to get this car to the point where, after all tests are complete and we are ready to put our O. K. on same, it will take at least six months.
To bridge the time when the present allotment of the old models are completed, which will be about Dec. 15th, and the time we bring in the Air Cooled Car, we are planning on bringing in a complete new [water-cooled] line . . .
I want to say further the changes which we have in mind for the Air Cooled Job have not changed my views of the proposition in the least, as I believe, when we get the first job on the road, with the changes incorporated, there will be a great change in the test reports.
Thus in less than a month the adopted schedule of the corporation was overthrown and the whole situation with respect to Oakland and the future General Motors product line had profoundly changed. There was disappointment and alarm in New York and pessimism in Detroit, Flint, and Pontiac concerning the outlook for the air-cooled car. Between Dayton and the manufacturing divisions controversy and confusion arose over the testing of the new car; there was no meeting of minds between Mr. Kettering's designers on the one hand and the divisional engineers and general managers on the other. Mr. Kettering felt fatigue and was so discouraged that the Executive Committee, upon officially canceling the Oakland air-cooled schedule on November 30, 1921, sent him a letter of confidence, as follows:
Dear Kettering:—
It is most important in our opinion that your mind be kept free from worries foreign to the development of the air cooled car and other laboratory work.
In the development and introduction of anything so radically different from standard practice as the air cooled car is from the regular water cooled job, it is quite natural that there should be a lot of "wiseacres" and "know-it-alls" standing around knocking the development.
In order that your mind may be completely relieved as to the position of the undersigned with respect to the air cooled development, we beg to advise as follows:—
1st. We are absolutely confident in your ability to whip all problems in connection with the development of our proposed air cooled cars.
2nd. We will continue to have this degree of confidence and faith in you and your ability to accomplish this task until such time as we come to you and frankly state that we have doubts as to the possibility or feasibility of turning the trick and you will be the first one to whom we will come.
We are endeavoring in this letter to use language such as will result in complete elimination of worry on your part with respect to our faith in you and this work and if this language fails to create this result, then won't you kindly write us quite frankly advising in what respect we have failed?
Due to the fact that criticisms are bound to continue until the air cooled cars are in active production and use, would it not be well for you to agree with us that at any time you have occasion to pause and wonder about our faith and confidence in you and this development, that you will pull this letter out of your desk and read it again, after which you will write to us in consideration of our frankly stating that we will write to you first in case of any doubt?
The letter was signed individually by the four members of the Executive Committee and by C. S. Mott, who as I have said was the group executive for the car divisions.
The crisis passed. The president's faith in the new engine was restored, Mr. Kettering revived his interest and energies, and the scene shifted from Oakland to Chevrolet.
On December 15, 1921, the Executive Committee proposed a strong effort to get the Chevrolet air-cooled "4" into production by September 1, 1922. To reconcile the divisions and research, O. E. Hunt, chief engineer of Chevrolet, and B. Jerome and E. A. De Waters, chief engineers representing Oakland and Buick, respectively, were sent to Dayton to collaborate with Mr. Kettering on the design of the air-cooled "4" an^ "6-"="" daily="" test="" reports="" were="" requested="" to="" be="" sent="" to="" the="" division="" managers="" and="" to="" the="">^>
The year 1921 closed with no definable progress in the General Motors product line.
These events bothered me to the extent that I attempted to raise them to a higher level in my mind with a view to taking them up with the Executive Committee. I did not feel strongly one way or the other about the technical question of an air-cooled versus a water-cooled engine. That was an engineering matter, for engineers. If I have any opinion today it is that Mr. Kettering may have been right in principle and ahead of his time, and that the divisions were right from a development and production standpoint. In other words, in this kind of situation it is possible for the doctors to disagree and still all be right. From a business and management standpoint, however, we were acting at variance with our doctrines. We were, for example, more committed to a particular engineering design than to the broad aims of the enterprise. And we were in the situation of supporting a research position against the judgment of the division men who would in the end have to produce and sell the new car. Meanwhile, obsolescence was overtaking our conventional water-cooled models and there was nothing in the official program to protect their position.
Late in December 1921, having in mind the breakdown of the test at Oakland and the problems that the proposed new car had created, I wrote some notes to myself to clarify in my mind the problems of the corporation, with a view to discussing them with Pierre S. du Pont. Regarding the Dayton situation, I said:
I believe that considerable time has been lost in the development of the air-cooled car through lack of appreciation, undoubtedly on the part of all of us, that certain fundamental facts do not, to any extent, subscribe to the contentions of Mr. Kettering—that everybody in General Motors must be sold on the details of his proposed car. I believe that if he had developed a car and demonstrated its performance or it had demonstrated its performance in the hands of independent observers and that he had left the production of the car to others as a principle, that we would have been farther ahead. I think we have made a mistake in putting it all up to Mr. Kettering and not recognizing his particular and peculiar situation. I believe that the Corporation needs and the industry needs advanced engineering. We are not going to get advanced engineering from a mediocre mind such as the average of our engineers compared with that of Mr. Kettering. Advanced engineering always, like advanced everything else, brings down upon it the discredit of ridicule of minds who cannot see so far. For all this reason, such engineering must be demonstrated in such a way that the facts must be accepted rather than theories. I do not think that there would have been any trouble in Oakland or that any changes would have been suggested had Mr. Kettering waited until he had a car that would demonstrate a reasonable satisfactory performance. I fear that the way this is working will result in the loss of a great many of the ideas that we need so badly and can only accept from a man of Mr. Kettering's marvelous ability.
The writing of this memorandum served mainly to mark a turning point in my conduct concerning the air-cooled engine. I began then to pursue a dual policy: first, continuing to support Mr. du Pont's and Mr. Kettering's hopes for the new car, and second, giving support to the divisions in the development of alternate programs of the conventional water-cooled type. And, incidentally, on the side, for a while Mr. Zimmerschied and I looked into a new "Muir" steam-cooling system, which never went into production. While Mr. du Pont had no enthusiasm for alternatives to the air-cooled engine, he did not forbid my taking this position. We simply worked along somewhat different lines. But such a situation between the two leading members of the operating organization was not entirely comfortable and could not last forever.
For the next sixteen months the air-cooled car continued to distract the corporation and to keep its leading officers in a state of tension over the question of what the future product of the corporation was to be.
At the beginning of 1922, the pressure on Chevrolet for the new car was increased, while that on Oakland was somewhat relieved. I took a first step toward the compromise which I felt was necessary to protect the corporation in the event of failure of the new program, and to bridge the gap that had opened between top management and the divisions. As vice president of operations I held a meeting in my room in the Hotel Statler in Detroit on January 26, 1922, with Mr. Mott (car group executive), Mr. Bassett (Buick), and Mr. Zimmerschied (Chevrolet), and reached an understanding that the official air-cooled program for Chevrolet was to be advanced, but with caution. The official program required that the experimental air-cooled "4" models under development at Dayton, "if proper, should be put in production by the Chevrolet Division as of September 1, 1922," that is, just seven months away, though the Chevrolet management had not yet received a test car from Dayton. We agreed, however, "that there is nothing before the Corporation or the Chevrolet Division at the present time to justify the positive conclusion that the air-cooled car should be put into production on the date specified," but that on April 1, 1922, after tests had been made, we could determine a safe program. At the same time we agreed that "a second line of defense should be prepared—this being only a conservative policy." The second line of defense was a parallel effort in the division to improve the existing water-cooled Chevrolet.
As to Oakland, on February 21, 1922, I reported to the Executive Committee and obtained approval to postpone a new schedule for the air-cooled "6," production of which had been canceled. For Oakland then we agreed:
1. To continue its recently established [water-cooled] models for a period of a year and a half, ending June 30, 1923.
2. To eliminate from consideration, as far as Oakland is concerned, the introduction of any air cooled model previous to that date.
3. That any design that Oakland may develop in the meantime will be in accordance with the program of designs already established by the Corporation.
4. That if the economic position of the Oakland models change [s] to the extent that the Division is unable to break even, steps will have to be taken at that time as seem best in view of all the circumstances prevailing at that time.
Since the Research Corporation at Dayton was the only substantial corporation-wide, staff engineering group in General Motors at the time, and it was occupied with the air-cooled-engine experiment, the advanced engineering for the water-cooled models devolved largely upon the divisions. All of the car divisions at that time were in need of advanced engineering staff work to make and keep their conventional cars competitive. At Chevrolet, Oakland, and Olds the need was acute. In other words, the divisions had to attend not only to their principal business of engineering, manufacturing, and selling current models, but to their own staff work on forward engineering as well. Not that matters had been any different in this area previously, but it was our intention to provide for comprehensive engineering staff work for the corporation. From the way in which the Research Corporation chose to operate—that is, as a long-range idea organization centering upon Mr. Kettering's unusual capabilities— it was evident that a gap had opened between his important function and the bread-and-butter type of advanced engineering. I did not then know that a historic distinction was being made in General Motors, but I saw the gap before me and on March 14, 1922, obtained approval of a policy of seeking outside engineering designs for the divisions. This policy would never solve the problem but it would help; many years would pass before the problem was entirely understood and met. Among those whom I consulted at that time was Henry Crane, who later came into the corporation as technical assistant to the president and contributed importantly to the corporation's engineering progress, especially in the design of the Pontiac car. O. E. Hunt had only recently—in October 1921—been brought by Mr. Zimmerschied into Chevrolet as chief engineer and I was not yet familiar with his fine capabilities.
The compromise between the air-cooled and water-cooled developments at Chevrolet was an uneasy one. It was soon accompanied by a change in management. On February 1, 1922, at Mr. Mott's suggestion, William S. Knudsen, who had formerly been Ford's production manager, was brought into the corporation's Advisory Staff and assigned as manufacturing assistant to Mr. Mott. Mr. Knudsen visited Dayton and on March 11 made a report on the air-cooled car, in which he recommended "that the car be put in production at once." He advised me, however, that he meant that production should be started in a small way to test the car both commercially and technically. On March 22 Mr. du Pont obtained the agreement of the Executive Committee to remove Mr. Zimmerschied from his post as general manager of Chevrolet and make him assistant to the president of General Motors; and to appoint Mr. Knudsen as vice president of operations at Chevrolet. Mr. du Pont also proposed to make himself general manager of the Chevrolet Division, while remaining chairman and president of the corporation, and it was agreed.
On April 7, 1922, at the president's request, we officially named the experimental development the "copper-cooled" instead of the "air-cooled" engine. Mr. du Pont wished to differentiate it from other systems of air-cooling. But Mr. Kettering continued to say "air-cooled."
Preparations for tooling up for production of the copper-cooled Chevrolet "4" began, with manufacture expected to start about September 15, 1922, at ten cars a day, increasing to fifty a day by the end of the year. The Canadian organization, too, was instructed to develop and introduce a copper-cooled "4." But the spring of 1922 passed without bringing any reality to the new programs. The copper-cooled engine remained under test at Dayton.
Spring sales of cars showed 1922 to be a year of fair recovery, and the Chevrolet "490," underdeveloped as it was in engineering design, was selling again. At a meeting in Detroit in May 1922—at which Mr. du Pont, Mr. Mott, Mr. Knudsen, Colin Campbell, then sales manager of Chevrolet, and I were present—Mr. Mott, with my support, proposed another compromise—namely, to put the new Chevrolet bodies, designed for the copper-cooled car, on the old "490" chassis in the fall, to make certain that we would have something new to sell for the next model year. Mr. Campbell opposed this, saying he was afraid to load up the dealers with "490's" during the winter and then give them copper-cooled cars in the spring of 1923. Again I tried to advance the policy of a dual program, saying: ". . . we should use the copper cooled car as an experiment until April 1st [1923]. Then, if it has become successful and is holding up in the field, increase production on the copper cooled jobs and on August 1st [1923] bring in the car as the sole product of the Chevrolet Division. If the car were not successful, we could continue to manufacture the 490s." The differences thus were laid on the table, but nothing was decided.
The parallel programs and proposals for programs created inevitable tensions in the corporation. Mr. Kettering continued to feel that the divisions were dragging their feet. Oakland, he observed, was now several months behind Chevrolet in the copper-cooled development, and Chevrolet plans, he said, were inadequate. He said in May of 1922 that he was working best with Robert Jack, chief engineer of Olds. Mr. du Pont supported Mr. Kettering's opinion of Chevrolet's plans and in June proposed a stiffening of the copper-cooled program at that division. Since chassis and body changes for the new engine were expected to be complete in the fall, and the change-over then would be concerned with the engine only, he recommended that production of the copper-cooled Chevrolet be scheduled for the forthcoming winter.
In September production had not begun, but the official expectations were optimistic. The plan for Chevrolet was to have a monthly capacity of 30,000 water-cooled and 12,000 copper-cooled cars by March 1923 and to convert the entire water-cooled production into copper-cooled by July or, at the latest, October 1923.
In November, Mr. Kettering noted a lack of interest in the copper-cooled car at Olds as well as at Oakland. I said to Mr. du Pont that I was fearful of the outcome of committing three main divisions to a new, untried engineering car design. Mr. du Pont pointed out to me that the decision had been made by the Executive Committee some months ago "and that the only decision left was the question of a change of front, or the abandonment absolutely of all experiments with water cooled and steam cooled cars." He agreed, however, that there would be no final determination with regard to Chevrolet until May 1, 1923. He then proposed that the Olds program be converted exclusively to copper-cooled.
Mr. du Pont's and my views were then expressed on November 16, 1922, in this compromise resolution of the Executive Committee:
RESOLVED, That the copper cooled program shall be as follows: 1. That the product of the Olds Division as of August 1st, 1923, shall be a six cylinder copper cooled car . . . All experiments and developments of water cooled motors shall be discontinued from this date (November 16th, 1922). 2. The Chevrolet Motor Division will proceed with the development of its copper cooled model cautiously, with a view to determining all factors involved, both commercially and technically, always recognized as being present in the development of any new product, in such a way that the hazard to the Corporation is at all times kept at a minimum. 3. The policy of the Oakland Division will be hereafter determined, but under no circumstances shall the Oakland Company put in production a copper cooled car of any kind or description until the position of the copper cooled car as a type is determined in a broad way by actual experience in the field of a sufficient number of cars, such experience being both of a technical and commercial nature.
Thus at the end of 1922 we were committed exclusively to the copper-cooled program at Olds, to a dual program at Chevrolet, and Oakland was exempted until the new car had proved itself. In December, Mr. Knudsen began to manufacture 250 copper-cooled cars at Chevrolet. The year 1922, like 1921, ended with uncertainty as to what the engineering design of the General Motors product was to be.
At the New York Automobile Show in January 1923 the copper-cooled Chevrolet—chassis and motor—was unveiled. It was priced at about $200 above the standard, water-cooled Chevrolet (now called the "Superior" model), and was the sensation of the show.
The schedule of the Chevrolet Division called for the manufacture of 1000 copper-cooled cars in February, with the monthly rate to increase to 50,000 in October. The only question that seemed to remain at the beginning of the new year regarding the water-cooled car was the exact date on which it should be abandoned. But troubles appeared in the course of production and Chevrolet copper-cooled cars failed to appear in February in large numbers.
Two decisive events occurred simultaneously during the months of March, April, and May 1923. First, we found ourselves in the greatest boom year up to that time in automobile history, the beginning of the industry's first four-million car-and-truck year. Second, difficulties in production had slowed the manufacture of copper-cooled Chevrolets to a walk, and the few copper-cooled Chevrolets that were on the road and being checked by the division produced a large number of reports of troubles, indicating that they were still experimental, unproved, and in need of further development. The question of what to do required no great act of mind. The only Chevrolet we had to sell was the old, conventional water-cooled model. Although it was not a high-performance automobile, even for those days, the Chevrolet water-cooled "Superior" model had been improved and it was a workable car. It ran up record sales that spring.
One could feel that a new era in the demand for automobiles had opened up, and it was imperative that the corporation settle upon its product program for a future that would present itself but once. On May 10, 1923, Mr. du Pont resigned as president of General Motors and on his recommendation to the board I succeeded him in that office. We continued to disagree on the merits of the copper-cooled program, but it was left to me as chief executive officer to make the decisions.
At Olds, in accordance with prevailing policy, all work on the water-cooled car had stopped; the inventory of cars was being sold off at a loss of about fifty dollars a car while the division waited to go into production of the new copper-cooled "6" on August 1, 1923. But the troubles with the copper-cooled Chevrolet clearly threatened the validity of this program.
As president I was of course chairman of the Executive Committee—which was enlarged to include Fred Fisher, head of Fisher Body, and Mr. Mott—and at the first meeting at which I presided on May 18, 1923, I took up the Olds question. I stated the facts about the Olds situation and said: ". . . the continued delay in producing the Chevrolet copper-cooled car is a constant reminder of the uncertainties and the difficulties in engineering and manufacture which would most certainly delay the program and might lead to serious embarrassment to the Olds Motor Works organization at the factory and throughout the world." After a discussion with Mr. Kettering, Mr. Knudsen, and Mr. Hunt, we appointed a committee of three engineers—A. L. Cash, general manager of Northwav, an engine-producing division of General Motors, Mr. Hunt, chief engineer of Chevrolet, and Mr. De Waters, chief engineer of Buick—and instructed them to report on the status of the six-cylinder copper-cooled engine. They presented their report to the Executive Committee at a meeting on May 28, 1923, from which Mr. du Pont, Mr. Haskell, and Mr. Raskob were absent. The report was the main business of the meeting. The engineers said:
That the [copper-cooled "6"] engine pre-ignites badly after driving at moderate speeds in air temperatures from sixty to seventy degrees. That it shows a serious loss of compression and power when hot, though the power is satisfactory when the engine is warming up from the cold condition.
These major difficulties plus several minor ones which can be reported in detail, if you so desire, lead us to the conclusion that the job is not in shape for immediate production. We recommend that we set it aside for further development and it be left out of consideration as far as immediate production is concerned.
Upon hearing this report the Executive Committee canceled the prevailing copper-cooled program at Olds and instructed the division to proceed with the development of a water-cooled engine that would be able to function on the copper-cooled chassis. We expressed confidence in the principle of copper-cooling as a longer range development, and assigned the copper-cooled "6" engine to Mr. Cash for development at the Northway Division.
At Chevrolet 759 copper-cooled cars had been produced, of which 239 were scrapped by the production men. Of the balance, 500 were delivered to the sales organization. Of these about 150 were used by factory representatives. Something over 300 were sold to dealers, of which about 100 went to retail buyers. In June 1923 the Chevrolet Division decided to recall all of these copper-cooled cars from the field.
On June 26, 1923, in a letter to me, Mr. Kettering proposed to take the copper-cooled engine out of General Motors. He wrote:
We started out to do a perfectly definite thing, which has been done, and it is just the same now as it was a year ago, but in the transition stage certain factors have entered into this, which have confused the thing to the point where, unless things can be clarified, I believe the whole proposition should be dropped. If we cannot get some practical way of commercializing this product, in our own organization, I should like very much to discuss with you the possibility of taking this outside of the corporation and this is a thing which has come up within the last week. I am sure I can get capital and pretty much of an organization to go do this job the way in which I know it can be done.
It appears that he did not understand then that the copper-cooled Chevrolets had been withdrawn. Four days later, upon his learning of tins decision, Mr. Kettering wrote to me again and proposed to resign from the corporation:
I have definitely made up my mind to leave the Corporation unless some method can be arranged to prevent the fundamental work done here from being thrown out and discredited through no fault of the apparatus . . .
I am perfectly sure that we can take any proposition and make out of it a 100% success, provided we do not have to overcome an organized resistance within the Corporation. This is impossible unless the Executive Committee can take it upon themselves to force through an Executive order when they know it is going to be of value to the Corporation.
I regret very much that this situation has developed. I have been extremely unhappy and know that I have made you and Mr. du Pont equally unhappy by my frequently discussing this matter with you. I am not temperamentally constituted where I can sit down and do nothing. I have never failed in any proposition that I have undertaken yet. The work here at the Laboratory, I realize, has been almost 100% failure, but not because of the fundamental principles involved. Enough may have come out of the Laboratories to have paid for their existence but no one will care to continue in Research activities as the situation now stands.
My only regret, in severing my connection with the Corporation, would be the wonderful association I have had with yourself, Mr. du Pont, Mr. Mott and others. There are many possibilities for work of the kind which I can do in industries where the problems which exist in getting new things over, are not quite as difficult as in the motor industry. Therefore, I hope, after reading this, that you can formulate some definite plan whereby either the situation within the Corporation can be cleared up or I can be relieved of my present duties. I would like to have some definite conclusion reached on this as soon as possible, as I would like to formulate definite plans.
Mr. Kettering was always very frank. In our forty years of friendship and association, he always spoke his mind clearly to me and I spoke the same way to him. I think that this was our worst moment. His biographer T. A. Boyd, has written: ". . . the discontinuance of the copper-cooled Chevrolet in the summer of 1923 was a staggering blow to him. It was then that his spirits reached the lowest point in his research career." I knew that. But I was as certain of the position I felt I had to take as he was of his, and of course we had different responsibilities. Management involves more than technical problems. I could not, as I saw it, in the face of an expanding market hold up the programs of the corporation for an uncertain development. If I had done so I do not believe there would be a General Motors today; we would have missed the boat. Furthermore, however sound the engine might have been in principle, it was not my policy then or at any time afterward to force on the divisions a thing of this kind against their judgment. On this question (though not on any other) there had unfortunately opened a wide gap in the corporation, with Mr. Kettering, his laboratories, and Mr. du Pont on one side, and myself and the divisions on the other. I was anxious to close it.
My problem was to reconcile Mr. Kettering's natural reactions and enthusiasm for his new idea with the realities in the case. The copper-cooled car had failed to meet the test of validity. It had failed at Oakland. It had been adjudged as needing further development by a joint study made by the chief engineers of Buick, Chevrolet, and Northway—a highly competent group. Sample cars produced by Chevrolet and sent into the field had been withdrawn because of various defects. The problem was complicated by the uncertainties of a new chassis as well as a new engine. We had to recognize that research engineers had little experience, relatively speaking, in chassis design as compared with the engineering staffs of the operating divisions. I had of necessity to respect all these facts and circumstances.
On July 2, 1923, I wrote Mr. Kettering a letter, from which I quote the following:
1. You say that you learned the day before yesterday that all Chevrolet cars were to be taken off the market. Now, you recollect in Mr. du Pont's office in Detroit it was agreed that the copper cooled Chevrolet car would be discontinued so far as further assembly is concerned and go assembly would not be started again until Messrs. Knudsen, Hunt and yourself reported to us that it was satisfactory to do this. You were a party to this you recollect, and it seemed after a very lengthy discussion in which many technicalities were brought up, that this was the right thing to do. At the same conference it was agreed that for the sales year beginning August 1st the copper cooled car would be continued and Mr. Campbell was authorized to write contracts both ways. You recollect that. Therefore, as a matter of fact, the Chevrolet position as agreed to at that conference is; first, that they would sell both cars during the sales year of 1923-4 and second, that no copper cooled would be assembled until it was further authorized. Therefore, you can see that they are in a rather embarrassing position. They are told that there will be two cars and yet they can only produce one. I just mention this so that there will be no misunderstanding.
2. It was called to my attention recently that there were 143 copper cooled cars out in the territory and it appeared to be desirable to withdraw them and reassemble them. In other words, it was thought desirable, in view of the fact that there were more or less complaints, not dealing with the engine particularly but dealing with the whole car, that they should be taken in and an adjustment made. There was nothing said that it was due to engine trouble or anything else. It simply seemed, all things considered, to be the desirable thing to do. You must appreciate that when these things are done the policy has to be worked out in detail and it is sometimes impossible to get all of the many people that have to carry out the thing to thoroughly understand and properly present the real reasons behind the policy.
I pass over matters which are not essential here and go on to the conclusion of my letter:
7. I do not agree with you that the situation is in any sense hopeless. I have great confidence in our organization, speaking of it as a whole. I think they are entitled to the credit that is due them and they are also entitled to the discredit of their shortcomings, if I might put it so. The great trouble is that there is an apparent lack of confidence in this copper cooled car and notwithstanding that the executives of the Corporation and the Executive Committee have tried to do their best to get it across, the fact that our Divisions have not believed in it so far has made it practically an impossible problem. That, as I see it, is the real problem before us. It is not the merits of the case and days and weeks spent over it will not alter the situation. What we have got to do is to make our people see the thing as you see it and with that accomplished then there will be nothing more to the problem. I do not think that forcing the issue, is going to get us anywhere. We have tried that and we have failed. We have got to go at it in a different manner if we are going to succeed.
I have quoted from this letter at some length because of the various matters it brings up, most of which are self-evident, at least as to what my position was.
In an effort to relieve the tension I proposed a new development program for the copper-cooled car.
It appeared clear that one basic mistake was a divided responsibility. The Executive Committee, the operating divisions, and the Research Corporation, all with different viewpoints both within themselves and with each other, were trying to do an administrative job. It was clear that we now must get back to sound principles, concentrate the responsibility in a single place, and support that effort. My plan was to create an independent pilot operation under the sole jurisdiction of Mr. Kettering, a kind of copper-cooled-car division. Mr. Kettering would designate his own chief engineer and his production staff to solve the technical problems of manufacture, and his organization would market the copper-cooled cars. They would make a few, or many, as the circumstances dictated. Such a program would provide Mr. Kettering a free hand, without interference, to demonstrate successfully the validity of the concept in which he had so much confidence.
To appraise the new approach I called a meeting of Fred Fisher, Stewart Mott, and myself. We all were sympathetic to this proposed solution of the problem. I quote from a memorandum I sent to Mr. du Pont on July 6, 1923:
Mr. Fisher, Mr. Mott and myself had a long talk yesterday regarding a policy that would be more constructive and more fundamental than the one we have been pursuing heretofore. We feel that in forcing the Divisions to take something they do not believe in and in which there are certain argumentative points yet to be demonstrated, is not getting us anywhere and with the divided responsibility between the Chief Engineer and Mr. Kettering we are not going to get anywhere unless the responsibility is positively assured in the hands of one or the other party. We are most anxious to practically demonstrate the commercial value of the proposition and believe that the solution, practically determined upon subject to your approval, is the only way out.
We have discussed the matter with Mr. Kettering at some length this morning and he agrees with us absolutely on every point we make. He appears to receive the suggestion very enthusiastically and has every confidence that it can be put across along these lines. The plan is based upon the following principles:—
1. That as we stand today our efforts to commercially develop the copper cooled have resulted in a total loss and we feel that we are worse off than we were two years ago on account of the resistance which has been set up on account of our repeated failures.
2. That the engineering responsibility for putting the job across must be definitely centralized in one man.
3. That we feel that the only way to get the desired result is to establish an independent Operation with the sole purpose of commercially demonstrating the copper cooled idea.
4. Therefore, we have decided to set up a new Division at Dayton using a part of the Research Plant, especially that part which is being vacated by the Aeroplane Division, and we will set up an organization there which will be more or less of an assembly proposition. Mr. Kettering will have complete charge of the engineering side of it, operating through a Chief Engineer whom he will appoint.
5. The new Operation will take over the four cylinder copper cooled engine and probably the six cylinder Olds and will market these two copper cooled jobs under their own name, starting with five or ten a day and building up as the demand increases.
6. All tool equipment and inventory already developed will be available except so far as Mr. Kettering may determine to make changes.
7. The Operation will be of a specialty nature, putting an extra long price on the job on account of the comparatively small production and special nature of the power plant, adding attractive features to the body which we feel sure will get the job across.
Mr. Fisher, Mr. Mott and myself feel that this is the only way out and place the responsibility where it belongs and eliminate all confusion with the other Divisions who can go ahead about their business in their own way as they have very big problems to work out to maintain their present position for the future. I believe that it is useless to attempt to establish an agreement between Mr. Kettering and Mr. Hunt or Mr. Kettering and anyone else on these various technical points involved in the copper cooled development. They never will agree and one or the other must be required to work the thing out largely in his own way along lines that commend itself to his judgment.
Mr. du Pont did not approve of this plan to segregate the copper-cooled development from the divisions and their large sales organizations, but in the end he accepted it. With the burden of the copper-cooled development placed in Dayton under Mr. Kettering's jurisdiction, and the car divisions cleared to proceed on standard water-cooled programs, I wrote on July 25, 1923, a memo of review to the members of the Executive Committee, from which I quote the following:
Two and a half years have elapsed since the reconstruction of General Motors commenced and in that time, due to the jam we have got into on account of the copper cooled, the position of our Chevrolet car has not made the progress that I think it should have made. Certainly every step that has been taken has been carefully considered and many reasons could be ascribed to this result and probably there would be some difference of opinion as to what really has contributed to the cause, but nevertheless the fact remains, and the object of this memorandum is to simply point out certain advantages that would accrue had we an intensively developed model at this time or what we can expect to gain by getting such a model at the earliest possible moment. Undoubtedly all these advantages, or certainly the most important ones would be available if the power plant was copper cooled as well as water cooled because I do not think that the real difference between the two designs would be material other than that the copper cooled would eliminate water which, if all other conditions were the same, would undoubtedly be a step in advance.
This memorandum was not a mere expression of regret for lost time but a preamble to a new program of advance with new designs for the water-cooled Chevrolet that would be put into competition in the low-price, high-volume market in accordance with the product plan of 1921.
The copper-cooled car never came up again in a big way. It just died out, I don't know why. (Note 5-1.) The great boom was on and meeting the demand for cars and meeting the competition with improved water-cooled car designs absorbed our attention and energies.
Mr. Kettering and his staff went on to their great achievements in creating and developing tetraethyl lead, high-compression engines, nontoxic refrigerants, the two-cycle diesel engine which was to enable General Motors to revolutionize the railroads, and innumerable other inventions, refinements, and developments which are everywhere to be found in automobiles, locomotives, airplanes, and appliances.
The significant influence of the copper-cooled engine was in what it taught us about the value of organized co-operation and coordination in engineering and other matters. It showed the need to make an effective distinction between divisional and corporate functions in engineering, and also between advanced product engineering and long-range research. The copper-cooled-engine episode proved emphatically that management needed to subscribe to, and live with, just the kind of firm policies of organization and business that we had been working on. Altogether, the experience was to have important consequences in the future organization of the corporation.