Reckoning

by David Halberstam

  Vincent was the quintessential old-timer. He had just replaced Big Bill Singleton. That in itself, Lennox soon found out, was an improvement, for Singleton had ruled by fear. A big, rough man, he was said to have risen in the company simply by punching out anyone who disagreed with him. His legend still hung over the factory. One of the things Lennox found as soon as he started working as the controller at Chester was that the ratio between indirect labor and direct labor in the export section for the KD, or knocked-down, cars seemed out of line. Knocked-down cars were those manufactured at Chester and then exported and assembled in another country. According to the ledgers, virtually all the costs went into direct labor—that is, the work for the KD cars that took place directly on the line—and almost nothing into indirect, which was the labor that went into the support system. That puzzled Lennox, and he went and found John McKenna, who was in charge of the export section. “I know, I know,” said McKenna. “It’s the weirdest labor classification I’ve ever seen.” McKenna explained that Singleton had once gotten a letter from the home office saying there was too much labor in the indirect section, and so the next day Singleton stormed over to McKenna and said, “Starting tomorrow, everything in all the indirect labor groups now gets listed as direct labor.” McKenna started to protest. “McKenna, shut the hell up,” Singleton said. “Tomorrow you don’t even known how to spell indirect labor.”

  By contrast with Singleton, George Vincent was not an intimidating man physically. He did, however, share the same outlook. He had an eighth-grade education and was openly suspicious of anyone who had more. He came from an era in which only the fittest survived. He had started as an hourly worker and had become a foreman when his own foreman had gone on vacation for two weeks. Their mutual boss had turned to Vincent and told him that he had been trying to reduce the number of men in his section by two for the last two months but that the present foreman had fought him, saying it could not be done. “If you can do it,” the boss told Vincent, “the job is yours. Permanently.” Vincent got rid of the two men and thus became a foreman. Like all manufacturing men from the old days, he always wore a hat indoors. It was a sign of his trade and his status. When Lennox arrived at the plant his first day, Vincent interviewed him, but it was not a real interview, since both men knew that Vincent was powerless in this matter. He could not stop Lennox from coming to work. He could only isolate him within the plant, which he promptly proceeded to do. Vincent let Lennox know from the start that he wanted no part of him. Lennox realized that he was on trial, caught between loyalty to Detroit and loyalty to Vincent. He would be judged at both ends and possibly fail at both ends. The factory was filled with all kinds of secrets that Detroit was not to know. Vincent and the others were watching to see if Lennox could find them out and, if he did, whether he would betray them to Detroit. They were also watching to see if he talked down to them.

  Shortly after he arrived, the company started using some thin trim on car panels. The trim was made of anodized aluminum. At a meeting Vincent talked about them and called them “oxidized aluminum panels.” Later, when they were by themselves, Lennox took Vincent aside and said, “Mr. Vincent, that is anodized aluminum.”

  “Lennox,” said Vincent, “in my goddam plant when I say it’s oxidized aluminum, it’s oxidized aluminum, and it stays that way.”

  Lennox worked for Detroit, but to all the men around him, Detroit was the enemy. This was not the normal disdain of one office in a company for another, not the usual feeling that the home office lacked sympathy for the problems in the field. This was lethal. The men of this plant had disliked Detroit in the past; now in the new era they hated it. The new Detroit for them was a place that made arbitrary rules, raised the production quotas, and then denied them the means to meet those requirements. Detroit, under McNamara, had no understanding at all of what the Chester plant did, they felt; in fact, it seemed to disrespect what they did. Detroit was pushing numbers at Chester, and there was no way that Chester could respond. The managers lived and died by the weekly rating wires, which graded the different factories on basic costs. These were like weekly report cards. Enough bad ones, and a manager was out. Lennox, aware that Vincent was in trouble on his reports, made some suggestions on how to improve them, but Vincent turned him down coldly. Lennox was the intruder, and the suggestions of an intruder were not welcome.

  Eventually he won acceptance, but it came only after he changed sides. For midway through his tour at Chester, Lennox did something unusual for a financial man of that generation. He decided to switch from finance to manufacturing. It was something he had thought about for a long time, and he was prompted by several factors. For one thing he simply liked manufacturing, enjoyed making something more than dealing with numbers and paper. It was something that he had only gradually found out about himself. His father had been a sheet-metal worker who had his own business until he went broke in 1931 during the Depression and then worked as an hourly man for Westinghouse. Don Lennox had grown up working for his father on weekends, doing sheet-metal work on commercial kitchens, and he had liked the work more than he then realized. Though he went on to business school after college, he later came to feel that at heart he was a frustrated engineer. The work of the controller had not been very much fun, and he had felt drawn to the factory floor. There was an excitement about it, particularly at the time of the changeover from one year’s models to next year’s. For Lennox, manufacturing seemed more comfortable, more positive than finance. The promise of a hot career in finance did not seize him as it did so many of his contemporaries. If anything, their mass desire negatively affected his choice. Looking around, he could tell that finance was loaded up with talent, and he foresaw that the competition for the best jobs would be savage. Simply because manufacturing was such a backwater and because none of the better people wanted to move into it, he stood a very good chance of a major career at Ford if he switched over.

  Slowly, in his years at Chester, Lennox came to admire George Vincent. That was not always easy. Vincent’s suspicion had put Lennox off, and Vincent’s skills were not at first visible to an ambitious young college graduate. But Lennox developed a regard for Vincent’s ability to survive the harsh earlier years at Ford, and then an even greater regard for the suppleness with which he handled all the demands of a potentially brutalizing institution. Vincent, he decided somewhat to his surprise, was very good at his job. He made wise choices in promoting people. He had a delicate sense of how much the people around him could take and when the burden would become too great. He knew when to praise people and when to come down hard on them. He also had a genuine pride in what he did; he hated careless work.

  Even as Lennox was beginning to think of changing over, he noticed a turn in Vincent’s attitude toward him. Vincent seemed to be accepting the fact that despite Lennox’s connection to Detroit, he was able to serve two masters. Vincent now understood that he needed this kind of person to protect him from Detroit. Lennox, Vincent noted, had not squealed on him, and in fact on several occasions had saved him from embarrassment. Lennox talked about his plan with Vincent, and Vincent encouraged him. He also tried, in vain, to get him to wear a hat indoors. “You won’t really be accepted by the other guys until you do,” he said. So it was that in 1957 Don Lennox, business-school graduate and finance man, switched over to manufacturing.

  Still, complete acceptance came grudgingly. A few months later, when it was time for the model changeover, Lennox tried drawing up plans for it. In the past, he thought, the changeover had been spirited but wasteful, an example of semiorganized chaos. This time, he decided, it would be planned, each step done with the utmost rationality. He promptly scheduled a series of meetings. But an old German named George Schaup looked at the schedule and shook his head. “Meetings, always meetings,” he said. “That’s the trouble with you college boys, you love to have meetings. You have your meetings, and at the meetings you schedule more meetings, and you spend all your time writing down what you’re going to
do. We’re different. We go out and do it, and we do it right, and we do it quickly, and then we have our meetings to talk about how we did it.”

  When Lennox switched, he was admitted for the first time into the inner world of the plant managers. It was filled with secrets, and the name of the game was Screw Detroit. He was impressed by the natural canniness of it all, and he knew that what he was seeing in Chester was taking place at Ford factories around the country. The managers felt themselves buffeted by the ever more frequent directives from Detroit. That was bad enough. But unlike their predecessors they had to achieve Detroit’s requirements in a new unionized age, and it was harder now to turn the screws on workers. So they had learned to cheat Detroit as best they could in order to preserve the integrity of their own operation. They did this with admirable cunning. Were the windows of the cars supposed to be subjected to a water test that simulated a terrible storm? Vincent’s men were skilled at producing wonderfully realistic deluges while jiggling the water gauges so that they read maximum pressure, while the water was actually at a much lower pressure. Were there too many parts left over at the end of a model’s life? Detroit hated that, so each year the plant people faithfully reported to the home office that they had only sixty-one of one part remaining and only forty-eight of another. Detroit, they were telling the home office, had been every bit as efficient as it hoped. Meanwhile they dumped thousands and thousands of useless parts into the nearby Delaware River. Detroit loved how little waste there was, how well the numbers had matched out, and the people in Chester joked that you didn’t have to swim the Delaware, you could walk across on the rusted parts of 1950 and 1951 Fords. It was the most critical part of the code: Tell Detroit what it wanted to hear and then do the best you could with the limited time and resources available to you.

  Did Detroit want extra production? Vincent could not speed up the line. There were strict union rules against that. But he could manipulate the line. For example, on the conveyor there was a wooden stick which separated each auto frame from the next. The stick was supposed to be forty-eight inches long. Vincent simply had his people surreptitiously take all the wooden sticks and trim three inches off them, not enough to be noticed. Shorter sticks between the frames meant more frames on the conveyor. The gambit allowed roughly a 6 percent increase in production, and 6 percent over a day and then a week and then a month was an enormous difference. The union people knew that something was wrong, but they could not pick up on it. They kept timing the line, and the line was moving at the agreed speed. All this extra production was kept secret, not only from the union but from Detroit. It was for a rainy day when Detroit came down with some impossible production quota that they could not otherwise handle. The name for this covert reserve was “the kitty,” and only a handful of people in the plant knew about it. Job One was the first job on a car, but Vincent generally liked to run his own excess production first; thus Job One, instead of being the first car down the line, might well be the fifty-first. Fifty cars went into the kitty before the production actually started. The controller knew nothing about it, but the plant manager and his top people knew. The day at Chester that someone knew what the real Job One was, instead of the paper Job One, was the day he had been let into the inner circle by Vincent. A month after he switched, Lennox was let in on it.

  The more Lennox studied the operation, the more ingenious it all seemed. Detroit had a system for demanding quality, and it periodically sent out inspectors to check the plants. But Chester could always rig the system, delivering to the visiting auditors precisely the cars it intended, cars of higher than normal quality. Vincent was like a great card shark dealing off the bottom of the deck. Every time Detroit managed to figure out how to stop the newest abuse, Chester would come out with an even more sophisticated one. It was, thought Lennox, like watching a battle between the IRS and a master tax lawyer; every time the IRS came up with some new tax, the tax lawyer found a new loophole. Chester’s rationale for this cheating was simple. In the minds of the plant men, Detroit and the financial people were the real cheats. They spoke of McNamara bitterly as a man who did not want to know the truth. McNamara and his people in Detroit were the ones who kept making liberal agreements with the unions and at the same time setting higher and higher levels of production while always demanding increased quality. They talked about quality, but they did not give the plant managers the means for quality; what they really wanted was production. So the plant managers were giving them what they wanted, numbers, while paying lip service to quality. Years later in Vietnam some American officers, knowing McNamara’s love of numbers, cleverly juggled the numbers and played games with body counts in order to make a stalemated war look more successful than it was. They did this not because they were dishonest, but because they thought if Washington really wanted the truth it would have sought the truth in an honest way. In doing so they were the spiritual descendants of the Ford factory managers of the fifties.

  When Don Lennox decided to go over to manufacturing, he knew that in career terms it was risky in several respects. In manufacturing there was no clique, no old-boy network, as there was in finance. Each plant was autonomous, and the men who ran them had scant opportunity to push or shield protégés; by the fifties it was all they could do to hunker down and protect themselves. Lennox was choosing a career without sponsorship in a company in which everyone else he knew was in some way sponsored. Those who went to finance and made if would be watched over and would, of course, in due time watch over others. By contrast almost everyone else in the company was vulnerable. In manufacturing, he knew, it would be easy to make enemies, and the enemies might remain permanent as the friendships might not. He talked about his decision to Ted Rickard, who by then was controller of the Ford division, and to Ed Lundy, who, next to McNamara, was the most important man in the financial cadre. “I wish you were being smarter,” Rickard said. “You’re going to the wrong side. That side is in the past.” In a way Lennox understood this, but he had come not only to love the manufacturing side but to believe in it. When he arrived, it was a jungle, and the law of the jungle still held; it would be his job, he decided, to try to change the factory, bring it into the modern era, make it more efficient and, equally important, more humane. There would be ample opportunity, he knew, to find things to change.

  He was right about that. In 1958, soon after he became planning and engineering manager at Chester, there was a crisis. The line was down. It was down because the parts could not get up to the main line quickly enough. That meant the body bucks (that is, the frames that were used for body assembly) were down. In an assembly plant, that was a cardinal sin. Lennox and Clarence Oldenburg, the production-control manager, rushed to the offending area. There they found a foremen filled with misery, stalled machinery in front of him, overwhelmed by circumstances beyond his control. Oldenburg went up to him. “What did I tell you would happen if I ever found this place fucked up again?” Oldenburg said.

  “You’d fire me,” the foreman said.

  “Is it fucked up?” Oldenburg asked.

  “Yes,” said the foreman.

  “You’re fired,” said Oldenburg.

  That, thought Lennox, is precisely what I have to stop, and so a few days later he quietly, without forcing Oldenburg to lose face, brought the foreman back.

  Every day in manufacturing, Lennox had the same thought: This is where things are made. The great pleasure for him was the challenge of it, of creating something in metal on a mass scale, of taking ideas which had been sketched on paper and turning them into cars. The best time each year was when they had to change the assembly line over for the new car models. They had two weeks to do it, to go from an easy high-volume run to complete shambles and then, with luck, to smooth high volume again. As the last car from the old model came down the line, the crews of maintenance men and engineers were poised like vultures, ready to tear the line apart. Everyone cooperated, mechanical engineers, design engineers, electricians. All the normal frictio
n was gone. In those two weeks, amid all the pressure and the tension, Don Lennox never loved the Ford Motor Company or his job more. This, he was sure, was why he had chosen the lonelier role of manufacturing man.

  12. FORD GOES PUBLIC

  THE FORD FAMILY IN the days after World War II was both rich and impoverished. It was caught in a dilemma caused by the original Henry Ford’s will. The old man had hated the government, hated taxes, hated banks. He wanted very much to keep the company in the family. If he had left the stock to his grandchildren, it would have effectively terminated family ownership, for the young Fords would have had to sell so much stock to pay their inheritance taxes that their hold on the company would have been shaky. In order to beat inheritance taxes the old man had created a foundation, the Ford Foundation, and had given it most of the stock; the family got a much smaller percentage—only 5 percent of the equity in the company. The family, however, held the voting stock; the Foundation had none. Thus the family could retain control of the company without paying devastating inheritance taxes.