Thornton was someone that Lovett immediately liked. He came from a small Texas town, was ambitious, bright and pleasantly extroverted; he quickly became one of Lovett’s top deputies. Together they decided that in order to harness American industry for the great war effort, they needed first and foremost a giant statistical brain to tell them who they were, what was needed, and where. They asked Harvard Business School, the most logical place, to train the officers they needed for statistical control. This brain trust would send the right men and the right supplies to the right places, and would make sure that when crews arrived at a base there were enough instructors. It was a symbolic step in America’s going from a relatively sleepy country toward becoming a superpower (a step which the acceleration in air power and air industry would finalize). We were already so big that our problem primarily concerned control as well as careful and accurate projection of just how powerful we were. (It was significant that twenty years later, when we were an acknowledged superpower, when Kennedy looked for a Secretary of Defense he turned to someone who was not really a production man, but the supreme accountant, determination of what we needed being more essential than the qualities of the old-style professional production man who ramrodded manufacturing schedules through, who went by instinct, and who knew nothing about systems control.)
The Business School accepted the proposition, and a group of the best young teachers was sought out. McNamara, who was already anxious to go into the service, agreed to become a teacher in the program. He was so effective, such an immediate standout, that Thornton soon pulled him from Harvard and attached him to the Army Air Forces. Finally, for the first time, McNamara had something upon which to fasten that energy, that drive, that curious cold passion. Those traits which would eventually be part of the legend began to emerge; until then he had been just another bright young man, intelligent and hard-working. Now he had a cause and a field to operate in. Thornton would recall that the young McNamara of those early days was strikingly similar to the mature McNamara: the same discipline, the concentration, the relentless work all day and night (“I’m sure that now that he’s at the World Bank, only the Bank exists, and Defense is behind him, just as when he was at Defense, Ford was behind him, and when he was at Ford, there was really nothing else but his work,” he would say).
Thornton sent him first to England to work out problems on the B-17 bomber program, finally got him a commission as a temporary captain in the Army Air Forces. But when the B-29 was being developed, he was pulled from other programs. This was to become the major project for the Air Force, the long-range bomber which was to prove so vital during the last year of the war, but first it needed to be organized and systematized. Other men would make their reputations on the development of the B-29, but Thornton later claimed that the genius of the operation was the young McNamara, putting all the infinitely complicated pieces together, doing program analysis, operation analysis, digesting the mass of facts which would have intimidated less disciplined minds, less committed minds, making sure that the planes and the crews were readied at roughly the same time. Since all this took place before the real age of computers, he had to work it out himself. He was the intelligence bank of the project, and he held the operation together, kept its timing right, kept it all on schedule. It was an awesome performance for a man not yet thirty.
McNamara had planned to go back to Harvard after the war. Challenges fascinated him, but not worldly goods or profit as ends in themselves. So why not return to Harvard, the teaching of those beloved statistics, it was amazing what statistics had done, it was awesome to imagine what they might do in the future. The life style of Cambridge appealed to him; he could enjoy the university atmosphere, he could talk with men who were in other fields and still involve himself in statistics. But Thornton, more outgoing, more entrepreneurial, a man with more imagination than the somewhat reserved McNamara, had other ideas. To Thornton the Air Force had not just been a part of a vast and impressive wartime enterprise but something more, a case study in instant corporate success. From a standing start, the Air Force quickly became cranked up into a supercompany, the most powerful and the most complicated industrial force in the world. It had gone from 295 pilots trained in the year before Pearl Harbor to 96,000 the year after, planes built, flight crews trained, all dovetailed. It had been a staggering task and an enormous success. And they had done it, not by the tired old men who had headed prewar companies, but by this group of talented young people that Thornton and Lovett had created, fresh young minds with modern skills, not tied to the myths, the superstitions and the business prejudices of the past.
Now, Thornton knew, there would be a reconversion from military to civilian production, and the business world would be filled with new opportunities. He took stock of his team: they were without doubt the most talented managerial team of the century, young men who had gained twenty-five years of experience in four years. Under normal business conditions they might not have attained comparable positions of power and influence until they were nearly fifty, by then having picked up all the old prejudices and undesirable traits of their predecessors. Thornton, the oldest and the most senior, was thirty at the time. None of the young men had any real ties to previous jobs; to go back to what they had been was like a general becoming a corporal.
Thornton began to think of the possibility of selling them as a group, all that expertise and managerial talent bound together. It was not just that they could bring a better price as a group, but more important to Thornton, if they were to accomplish something, really create something new and bold in the business world, then their chances were far greater as a group (“If you went in with one or two people you could get lost or chewed up; if you were going to convert a relatively large company quickly you needed a group,” he would recall). When he talked it over with his team, they were enthusiastic. Only McNamara had serious objections, he wanted to return to Harvard. The idea of business did not excite him. But there were financial problems: he had come down with a mild case of polio, and Marg with a more serious case, necessitating considerable doctor bills. (“I said, 'Bob, you’ve got those doctor bills and you can’t go back there to Harvard on twenty-six hundred dollars a year,’ and he thought and said, 'I guess you’re right,’ and he was on board,” Thornton said.)
There were two immediate possibilities; one was Robert Young, the railroad man, and the other was the Ford Motor Company. Thornton went by to see Young, who offered him a job and said he could bring two or three men with him. And then there was the Ford Company, which seemed to offer the most challenge. It would have to be retooled and reconverted; they knew that financially it had not done well, though they did not know how badly it had done during the last twenty years, showing a profit only once since 1927, in the year 1932. The old man’s long-time associate, Harry Bennett, had just been ousted and the reins taken over by Henry Ford II, their own age—he was twenty-eight—who now desperately needed to modernize the company that his grandfather had founded and then let slip. They sent Ford a cable which said in effect: Bright young management team, ran Air Force, ready to work. Thornton made an early contact; eight of them went out there and impressed Henry Ford and the deal was set. Ford told Thornton to set the salaries; they ranged from $10,000 to $16,000. Thornton gave McNamara the second highest salary. The group became the famous Whiz Kids: Thornton, McNamara, Arjay Miller, J. E. Lundy, Charles Bosworth, Jack Reith, Jim Wright, Ben Davis Mills, Wilbur Andreson and George Moore. It was an extraordinary decision for young Ford to make; however, at that bleak moment in his company’s history he had nowhere to go but up. He was reaching beyond the normally closed auto business for a group of non-auto men, whose experience was not in the failure and stupidity of war, but rather in the technology of it, and indeed the technological success of war. Their chief lesson had been that you could control an organization by converting an abundance of facts and figures into meaningful data and then apply them to industrial production; these men were purveyors of wha
t would be a new managerial art in American industry.
The Ford Company practices, both in production and in personnel, had an almost medieval quality to them. Under Henry senior and Harry Bennett the policies of the company were singularly primitive. The public was a problem, the unions were a problem, the bankers were a problem. If Ford built a car, it was the public’s responsibility to like it. No modern managerial group was being trained. The company had no credit. Henry Ford’s only son, Edsel, had tried to fight the policies, but Bennett destroyed him. After the family revolt which resulted in Bennett’s expulsion, young Henry had inherited the shell of a company, the name and perhaps not that much more, at a time when General Motors seemed to employ the most up-to-date production and managerial techniques. Young Henry needed, above all else, instant executives; the company was losing $9 million a month. But he needed, as one friend would admit, two levels of management. One now, instantly, and one to come along. In hiring the Whiz Kids, he was taking care of the future, the near future, but the future nonetheless, so he shrewdly covered all bets and hired a senior level of management from General Motors, men in their late forties and early fifties who could go to work that day and help train his new intellectuals in the auto business. This was to be known in automotive circles as the Breech-Crusoe-Harder group, headed by Ernie Breech, then forty-nine, who had been at General Motors for most of his adult life, and was at the time president of GM’s subsidiary, Bendix. He brought with him Lewis Crusoe, another high General Motors executive, now retired, and Delmar Harder, former chief of production of GM.
The arrival of the GM executive group, which the Whiz Kids had not known anything about, slowed down the latter’s takeover of Ford (Thornton, restless, left after a year and a half for Hughes Aircraft, where he sensed greater possibilities, finally ending up at Litton Industries). But the system worked very well for Henry Ford. The young men were scattered throughout the company (with McNamara and Arjay Miller, who succeeded McNamara as president of Ford, working in finance). There they worked to convert the incredibly archaic, helter-skelter operation of old Henry to the new classic corporate style used at General Motors, with its highly accountable decentralized units, the different company operations turned into separate profit-and-loss centers where each executive would be held directly responsible, and where slippage and failure would be quickly spotted. The lead of General Motors in that postwar period was enormous: Ford had very little in the way of a factory, its machinery was badly outdated, not easily retooled. In contrast, GM had converted to war production, but it had been very careful to establish in its factory and production lines the kind of systems that could be easily converted to peacetime production. Chevy thus had a massive lead; it could bring out a car for much less than it actually did, but if it lowered its prices it would kill Chrysler and bring the wrath of the Congress down for antitrust. (“Don’t ever hire anyone from the auto industry,” Gene McCarthy, one of McNamara’s severest critics later said of him. “The way they have it rigged it’s impossible to fail out there.”) So Chevy kept its prices higher and produced a much better car than Ford. The true difference between Ford and Chevy then was reflected in the used-car market: a two-year-old Chevy sold on the used-car market for about $200 more than a two-year-old Ford, a very considerable gap.
The prime aim of the two new management teams at Ford was to close the gap. Here Breech and McNamara combined their talents; they had to figure out how to produce a car that was at least partially competitive with Chevrolet, and at the same time make enough profit that could be plowed back into the company to build the desperately needed plants. They could not do it by borrowing from the banks, Ford’s credit rating simply wasn’t good enough, so they did it by skinning down the value of the car, mainly on the inside where it wouldn’t be seen. Ford had always been known for styling and speed, so they kept that, and worked on having a modern design, with a zippy car, good for the youth market, though eventually, and sometimes not so eventually, the rest of the car would deteriorate (as was also reflected in the used-car price). The Ford buyers seemed to know it, but curiously enough, continued to buy Fords. By these means Breech got the money to buy and modernize the plants, while it was McNamara’s particular genius to raise the quality without raising the cost, a supreme act of cost effectiveness. This was, of course, McNamara’s specialty, and he had a bonus system to reward stylists and engineers who could improve the car without increasing the cost. The McNamara phrase—it came up again and again at meetings, driven home like a Biblical truth—was “add value rather than cost to the car.” And slowly he and Breech closed the gap on the used-car differential while at the same time modernizing the company.
It was at Ford during this period that McNamara was being converted from a bright, hard-charging young statistician into a formidable figure, a legend, McNamara the entity, someone to respect, someone to fear, a man who rewarded those who met his standards handsomely, and coldly rejected those who did not.
If someone were to be driving with McNamara during work hours, he would see it: Bob was driving, but he was thinking of grilles that day, only grilles existed for him, cheap ones, expensive ones, flashy ones, simple ones, other cars rushing by on their way to lunch, on their way home, and Bob running it through his mind, oblivious to oncoming traffic, frightening his companions. Bob, watch the road, one would say, and if he were in a good mood, he might apologize for his mental absence. McNamara never stopped pushing; in those days he was watching Chevy—how was Chevy doing? The night each year when they got hold of the first Chevy, everyone gathered around in a special room and broke it down piece by piece into hundreds of items, each one stapled to a place already laid out for it, and they concentrated on it—no brain surgeon ever concentrated more—everyone muttering, wondering how Chevy had done this or that for a tenth of a cent less, cursing them slightly—so that was how they had done it!
When Thornton left, there was considerable curiosity as to who would emerge as the top Whiz Kid; it soon became clear that it was McNamara. He symbolized a new kind of executive in American business (later one friend would call him “dean of the first class of American corporate managers”), men who had not grown up in the business, who were not part of the family but who were modern, well educated, technicians who prided themselves that they were not tied to the past but brought the most progressive analytical devices to modern business, who used computers to understand the customers and statistics to break down costs and productions. At Ford what distinguished McNamara was the capacity to bring a detailed financial system to the almost total disorganization of the company. He was brilliant at systematizing, telling Ford where it was going before it got there. He set up a corporate accounting system which reduced the element of surprise in the business. His system of rewards for reducing costs provided incentive (though occasionally, in the view of his critics there, the system backfired, the rewards going to people and ideas whose efficiency would be only short-range).
He rose quickly because he was moving in something of a vacuum. Henry Ford was new and unsure of himself, particularly in the field of financial systems. To an uneasy, uncertain Ford, McNamara offered reassurance; when questions arose he always seemed to have the answers, not vague estimates but certitudes, facts, numbers, and lots of them. Though his critics might doubt that he knew what the public wanted or what it was doing, he could always forecast precisely the Ford part of the equation. He had little respect for much of the human material he found around him, the people who claimed, when he reeled off his overwhelming statistics, that they had always done it the other way in the auto business. Such people, when they challenged him, were often proved wrong. Slowly he surrounded himself with men who met his criteria, men who responded to the same challenges and beliefs, and he would respect their judgments. This was a formative experience in his life, because years later, when the doubters about Vietnam began to express themselves, they at first tended to be people who did not talk his language and who were very different
from his kind of people. They did not think in terms of statistics, or rationalizing systems, and they did not support their judgments with facts as he knew them, but rather by saying that it did not smell right, or that it just did not feel right; he would trust his facts and statistics and instincts against theirs just as he had before at Ford when confronted by the businessmen who had doubted his facts and charts.
The Best and the Brightest (Modern Library) Page 37
